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Question: Would you please clarify the margin a landlord can raise the rent in the new year lease? Ours just gave us a draft with the new amount $2,300 instead of $2,100 from last year.
— Sticker Shocked in Stuyvesant Town
Dear Sticker:
Welcome to New York, kiddo.
If you don’t live in a rent-controlled or rent-stabilized apartment, your landlord has free rein to raise your rent to whatever the rental market will bear or whatever he or she thinks the property is worth.
So your increase, while really hefty, is well within your landlord’s right.
Not that it makes the situation any easier for you. At $200, a 9.5% rent hike can do plenty of damage to anyone’s monthly budget, especially since New York wages rose only 3.9% in the last year.
So what, if anything, can you do about it? Cut a deal.
If $200 is way out of line for you, try negotiating. This will be easier if your landlord is an individual, rather than a large corporation. But as I see it, you have three arguments on your side:
- Point out that you may not even qualify for your apartment at the new rent rate. Do the math. Under the “40 times rent” rule of thumb, you needed to make $84,000 a year to qualify for your current rent of $2,100. At $2,300, however, you need to make $92,000. Did you get that kind of raise last year?
- Do some research and look at rent prices around the city. Gather some figures from rental listings here at StreetEasy and other sites. Show the landlord what others are asking for comparable apartments. Also, point out what the NYC Rent Guidelines Board is allowing for stabilized apartments — just 1.5% this year.
- Tell them that the rent increase is more than you are prepared to pay or can pay, and you will have to move if they won’t lower the rent. Suggest that a month or two vacancy will wipe out any revenue advantage that the landlord might have seen with the increase. But be prepared. Come up with a figure you can live with (say $50 or $75 a month) and be ready to make a deal.
Good luck!
David Crook is a veteran journalist and author of The Complete Wall Street Journal Real-Estate Investing and Homeowner’s Guidebooks. Do you have a question about anything real estate-related in NYC? Write him at askus@streeteasy.com. For verification purposes, please include your name and a phone number; neither will be published. Note: Nothing in this column should be considered professional legal advice. If you have a legal issue, consult an attorney.
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