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Editorial: A justifiable rent increase

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Once again this year the irresistible force gathered in the same room with the immoveable object and when the night was over, no one was satisfied. The annual meeting of the Rent Guidelines Board has become as predictable as it is frustrating.

This time the board has approved a 4-percent rent hike for tenants with a one-year lease and 6 percent for tenants with a two-year lease. This means that on Oct. 1, rents will go up substantially for some 200,000 families living in Queens.

The board explained that the rent increase was necessary to counter the effects of the soaring cost of heating oil. The landlords argued that they should be able to pass these costs on to their tenants. The landlords who maintain low- and middle-income housing may still come out losers if the cost of heating oil remains high and the next winter is particularly cold. So, if you want someone to blame, blame OPEC and the Clinton administration for not freeing up the nation's oil reserves.

To some extent, the tenant activists have themselves to blame for this larger-than-usual increase. Each year the people claiming to speak for the city's tenants pack the rent guidelines meetings. They scream and they shout and they do their best to demonize the city's landlords and they demonize the board members. The New York Tenants and Neighbors Coalition has called for two of the board members to step down. If the radical activists had their way, rents would never go up.

God help us if these activists ever hold sway in New York City. When landlords cannot expect a reasonable return on their investment, there will be no incentive to build new rental housing here. Citing a recent survey done by the City Council, Councilman Archie Spigner noted that there is "a continuing critical and declining shortage of available rental units" in New York City.

If these tenant groups did not insist on inhabiting the extreme left fringes of this debate, they might have a chance to limit future increases through rational dialogue with the landlords and the board. When they come to the meeting and demand zero rent increase, they become irrelevant to the discussion. Mayor Giuliani had asked for a 2-percent increase. Had the tenant organizations been willing to accept 2-percent, there's a good chance that the board would have sided with them.

The rent Guidelines Board was created to protect people with fixed or limited incomes from "catastrophic rent increases." There are those, including some landlords, who see the board as a first step down the slippery slope of socialism. They trust market forces and they argue that government should not be involved in telling landlords how much they can charge for their own property. Without rent stabilization, they say, there would be more incentive to build rental property in New York City. As the supply of housing increased, the price would naturally go down.

Politicians who criticize the board and complain that New York is becoming a city of the rich are pandering to the anti-landlord audience. No one ever lost an election because of beating up a landlord. Would they be willing to invest their own money in middle-income apartment housing? You can bet they wouldn't. And yet they have no qualms about criticizing those who are willing to take this chance.

Although we think a somewhat smaller increase would have been effective, we still applaud the Rent Guidelines Board for having the courage to raise rents substantially.

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