The Rent Guidelines Board’s annual decisions on basic allowed rent adjustments are crucial to both the affordability and the long-term quality of New York City’s rent-stabilized housing stock. Given the Board’s mandate to balance maintaining affordability with allowing owners to earn a fair return, policymakers must guard against changes that could lead to unintended consequences, such as inequitable rent increases or a gradual decline in housing quality. As long as the annual rent adjustments need only reflect increases in operating costs and inflation, policymakers should consider emulating other states by replacing the Board’s discretion with a third-party generated cost index, thereby making the system more predictable, transparent, and less influenced by politics. Furthermore, as illustrated by the potential consequences of eliminating Major Capital Improvements (MCI) and Individual Apartment Improvements (IAI) increases, any changes to the system should be made with full consideration of the impact on the Board’s requirement to balance affordability and fair return.

https://furmancenter.org/files/Rent_Stabilization-5-24-19.pdf