HPD on erratic rent increase process and statutory requirements
Phillips explains Mitchell-Lamas follow a different process than rent-stabilized buildings, with HPD legally required to approve increases to cover costs, and that increases often make up for many years at once.
In many cases, Mitchell-Lamas experience inconsistent rent or maintenance fee increases.
This is a result of the unique regulatory structure of the program.
Whereas rent-stabilized buildings follow a framework for rent increases as advised by the Rent Guidelines Board, Mitchell-Lamas follow a completely different process, determining their rent or maintenance fee increases based on the need to keep a balanced budget.
Per state law, HPD is legally required to approve rent and maintenance fee increases up to the amount necessary to cover a building's costs.
Failing to approve an increase could risk violating state law.
It is not HPD's statutory role to determine whether to increase rents.
The responsibility and decision-making around the process is in the hands of the private housing companies.
When buildings finally do raise their rents or maintenance fees, it can sometimes be making up for many years all at once.
HPD understands that this practice can be painful for tenants and shareholders, and HPD assists developments with reviewing their income and expenses to maintain a balanced budget.