The Price Index of Operating Costs calculated by the Rent Guidelines Board rose only 0.5 percent for the year ending in March, according to a report issued yesterday. RGB staff estimated that ‘commensurate’ stabilized rent increases based on the index might range from plus 2 percent to minus 2 percent. The low index was due entirely to energy prices dropping 21 percent. Real estate taxes increased 4.2 percent and are projected to increase 7.7 percent in 2016. Insurance was up 7.2 percent. The RGB re-weighted the index components this year based on Real Property Income and Expense Reports. One of the biggest changes was an increase in the weight given administrative costs from 6.8 to 13 percent of overall operating expenses. The industry has argued for years that administrative burdens on owners had increased due to increasing government rules and regulations.
The City Council, in fact, added more rules yesterday, with actions that would ban employers from running a credit check on prospective employees, tighten pollution controls, and require tamper resistant electric receptacles or protective covers on all receptacles in public areas of multiple dwellings. The credit check bill has an exception for employees who would have spending authority over $10,000 or more. All three bills go to the Mayor for signature.
Two other items on the Council agenda this week are a proposal to require prevailing wages on any affordable housing development that uses discretionary city funds and a budget proposal to create a pied-a-terre tax to pay for 1,000 more policemen.
Meanwhile, over in Newark, Real Estate Weekly reports that year-old legislation tying rent increases to an anemic CPI increase has already led to layoffs of building employees and reduced spending on maintenance and renovation.