Friday, March 29, 2013

Wages and Rents, part 2: The Minimum Wage Increase

Last night, the New York State Legislature voted on a budget for the 2013-2014 fiscal year, which included a compromised minimum wage increase. Tenants' wages are one of the factors that the RGB considers each year in determining the rent adjustment, under Section 26-510(b) of the Rent Stabilization Law's requirement that the board consider "relevant data from the current and projected cost of living indices." Every year, the RGB staff prepares a document called the Income and Affordability Study, which includes an analysis of wages and rent burdens. RGB staff reports have shown that rents have risen significantly faster than incomes, leaving tenants behind in the struggle to emerge from this recession.

This morning, the New York State Tenants & Neighbors Coalition released the following statement, putting wages in the context of housing costs and calling on lawmakers to enact meaningful pro-tenant reforms to the rent laws:
Tenants to legislators: Stop rents from rising faster than wages!
Tenants & Neighbors commends the New York State Legislature for taking action to raise the minimum wage. This much needed move will help many low income households stay afloat in a difficult economy. It is imperative, however, that as legislators act to raise wages for workers, they also take steps to protect these same individuals from unaffordable rent increases. We want to ensure that these wage increases help working people, and do not go straight into the pockets of landlords in the form of rent increases.
Increases in incomes have often failed to raise the standard of living for low-income New Yorkers because rents have risen faster than wages. For example, the incomes of low-income (less than 200 percent of poverty) tenants without housing subsidies rose by 11 percent during the boom years from 2005 to 2008, but rents rose by 13 percent during the same period. As a result, the median per-capita income left over after rent for those tenants fell by 6 percent.
Many minimum wage workers live in rent stabilized apartments, and are subject to expensive rent hikes as a result of persistent Rent Guidelines Board increases and permanent Major Capital Improvements. When low wage workers seek new housing, they often have a hard time finding affordable homes because of Vacancy Bonuses and Individual Apartment Improvements that allow rents to skyrocket between tenancies. We call on the Legislature to enact comprehensive rent law reform to protect tenants, and make sure that the mandated minimum wage increases aren't simply swallowed by rising rents. The State must act to prevent another regressive transfer of wealth from tenants to landlords.
For more information on wages and rents, check out the Community Service Society's excellent "Making the Rent" report from last June.

Rents are rising faster than wages.
Source: Community Service Society, Making The Rent, 2012.

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