These Neighborhoods Are Vulnerable To Big Rent Hikes, Study Shows

NEW YORK — A handful of neighborhoods are especially vulnerable to massive rent hikes faced by tenants paying lower-than-required prices for their apartments, a new report shows.

Bronx Borough President Ruben Diaz Jr. released the report Thursday detailing the "crisis" befalling tenants of rent-stabilized apartments who pay preferential rents, or rates below the legal maximum price. Landlords agree to these rents but can increase them when leases are renewed or new tenants move in.

More than 260,000 apartments — about 7 percent of the city's housing stock — had preferential rent last year, according to the report. But certain neighborhoods have higher concentrations, indicating a greater share of their residents are susceptible to huge rent hikes and subsequent displacement.

"Every corner of the city of New York is touched by this crisis," Diaz, a Democrat, said at a Thursday news conference.

Diaz's report drew from a variety of sources, including news reports, Census data and rent data from New York State Homes and Community Renewal, an agency with which rents are registered.

The report profiles four neighborhoods — one in every borough but Staten Island — that have higher proportions of preferential rent apartments. "Each neighborhood, however, faces unique challenges when it comes to preserving affordability," it reads.

The growing gap between preferential rents and the legal maximum prices shows the growing risks neighborhoods face, according to the report. The median difference increased 55 percent across the city from $286 in 2008 to $444 in 2015, the report says, citing an Independent Budget Office analysis.

The report details the case of one disabled Bronx man whose preferential rent of $503 more than tripled to the legal maximum of $1,650, forcing him to move to a building that reportedly became a homeless shelter. (Diaz did not name the man, but the report says his office handled the case.)

Preferential rent tenants are at risk both because landlords can utilaterally increase their housing costs beyond their means, and because residents may not realize such a hike can happen, Diaz said.

"When somebody signs a lease (and says) 'Oh, I'm getting a wonderful rent-stabilized unit,' what they don't realize is that they could be jacked up, or that rent could increase, and no one could say anything about it," he said

The borough president called for the state Legislature to pass a bill that would bar landlords from hiking preferential rents when leases are renewed. The measure is on tenant-rights advocates' wish list of rent reforms.

Should that bill not pass, Diaz said, the city should give landlords a property tax break to help them to preserve preferential rents. The $93.5 million yearly cost of doing so would be a "drop in the bucket" compared to $17 billion of savings in shelter and affordable housing costs, his report says.

Here's a breakdown of how preferential rents impact the specific neighborhoods in Diaz's report.

WASHINGTON HEIGHTS/INWOOD, MANHATTAN

A slice of these northern Manhattan neighborhoods has an unusally high concentration of preferential rents. About 19.6 percent of all apartments in the 10040 ZIP code had them last year, down from about 20.3 percent in 2016, the report says.

Moreover, both rents and incomes in the area have shot up in recent years, and more than 55 percent of tenants in the ZIP code spend more than 30 percent of their income on rent, according to the report.

FORDHAM, THE BRONX

The Bronx's Fordham neighborhood has a similar profile — more than 5,500 apartments there, or 19 percent of all rental units, had preferential rent last year, the report says. While the nabe's median income was far lower than Washington Heights' at $30,339 in 2016, it had grown more than 21 percent from 2011, a faster pace than the roughly 13 percent spike in rent.

JAMAICA, QUEENS

One ZIP code in Jamaica, Queens has more than 3,200 preferential rent apartments, the report says. That's about 16 percent of all apartments in the area but more than half of the rent-stabilized units.

The report notes that the neighborhood has seen an influx of new housing in recent years, some of it affordable. The development "could bring new interest to the neighborhood, with increased potential for displacement along with it," the report says.

BAY RIDGE, BROOKLYN

Nearly 3,600 apartments have preferential rents in Bay Ridge, Brooklyn's 11209 ZIP code, where more than 45 percent of residents spend more than 30 percent of their income on rent, the report shows. That's less than 11 percent of the neighborhood's apartment stock but more than a third — 37 percent — of its rent-stabilized apartments.

Median rents rose 15 percent to $1,402 from 2011 to 2016, a pace similar to the 14 percent increase in median income, according to the report.

(Lead image: Bronx Borough President Ruben Diaz Sr. speaks at a Thursday news conference outside City Hall. Photo by Noah Manskar/Patch)