How can i fight a rent increase?

February 11, 2009 10:09 PM

My 1 year NYC apartment lease is up, and I just receive a lease extension offer with a $100 increase. How can I cite the economic downtown and renew the lease without paying the increase?

I live in a 6th floor walkup in Manhattan and pay $2400 a month, and my one year lease expires at the end of March. The landlord/management company sent me a letter offering a 1 year renewal, but with a $100 rent increase!! I hope to stay here, but since the economy is in tatters, and I am a freelancer, I want to argue a strong case to keep the rent at $2400.

Does anyone have any advice on how I can convince the landlord that it is a poor time for a rent increase? Do I have any grounds to push back, or am I at their mercy?

I also got nervous today since my original broker called asking if I intended to renew, which made me think she was keen to put the apartment back on the market and was hoping I would leave. I was surprising to get her call because she never took any of my calls once the lease was signed even though I had some issues with the apartment.

The apartment is not rent controlled (but it was with the previous tenant who paid something like $400 a month!). I know the landlord can raise the rent to whatever they like, but a rent increases just doesn't feel like a good idea at the moment.

Thanks for your words of wisdom!

posted by avex to work & money (28 comments total)

Huh? "but a rent increases just doesn't feel like a good idea at the moment."
Maybe for YOU it doesn't.

I'm pretty sure they don't care at all what seems to be a good idea for you. They'll just put the place back up on the market for 2500$ or more.
For all you know they already have 10 people interested in getting the place.
posted by zephyr_words at 10:19 PM on February 11

Might even be able to get the rent lowered. via curbed.com
posted by minkll at 10:24 PM on February 11 [5 favorites]

I was surprising to get her call because she never took any of my calls once the lease was signed

Of course, she got paid. Anything else is your problem. She's looking to get paid again.

I know the landlord can raise the rent to whatever they like

Other than knowing that the rental market in NYC is FUCKING NUTS, I don't know much about it, but I do know in Chicago landlords can only raise the rent about 10% (someone please correct me on this, I know I'm mis-remembering.) Such rules may apply in NYC, though it's doubtful a professional company would so obviously over step the rules...

You have a couple of options... one is simple market leverage. If you move out and the apartment sets empty for two weeks, the rental company has already lost the $1,200 they would make off of you over the course of one year.

But they know that. They are dummies (all of real estate, especially the rental industry, is staffed by morons and idiots) but the aren't that dumb.

They may however think that you're the type not to challenge the increase. I mean, why would they NOT try to go up on you?

This is where you write a very kindly worded letter to whatever higher-up at the rental agency you can identify and say that given the current economic climate, and considering the fact that you've always paid your rent on time, and been an ideal tenant, that such an increase is not just hurtful to your professional relationship, it's also short sighted given the fact that it potentially interrupts an otherwise consistent revenue stream.

If you speak their lingo, which is ultimately concerned with the bottom line - as are all such shallow, greed-focused industries, you may get somewhere.

But don't forget, you have to sweeten the pot. Offer to pay a one time fee up front... let's say you talk them down to a $40 increase. Offer to pay it for the year up front. So say you renew and pay an additional $480 for the month and your regular $2,400 for the rest of the lease.

Alternatively, if you don't see yourself going anywhere for a while, offer to sign a multi-year lease. Sometimes knowing that a reliable renter is going to be there for two or three years is preferable, particularly in tumultuous times.

The point is this: they want to play ball, unless your apartment is grossly below market value, they probably don't want you to move out... so you have some leverage, you just have to demonstrate that you're willing to throw money at it to work it out.

Good luck.
posted by wfrgms at 10:30 PM on February 11 [1 favorite]

I was surprising to get her call because she never took any of my calls once the lease was signed

Oh and btw, you should be very clear that you find it interesting that you hear from her now, but now when you needed a problem resolved. Leave her hanging uncomfortably from the rope she has so callously unspooled for herself.
posted by wfrgms at 10:35 PM on February 11

@zephyr, 20 million unemployed, the spiraling economic crisis and recession, global stock market crash, corporate financial ruin, etc, indicate that there is an argument against a rent increase. There has been a tumble in housing prices, and a record drop in consumer prices with analysts predicting further drops in the months ahead, so hopefully it follows that there should be at least a stabilization in rent prices and a renter friendlier market in general. Or at least that is what I am hoping.

@wfrgms, thanks for the advice. I'll try and sweeten things if they are not receptive at first.

@minkll, great link. Thanks!
posted by avex at 10:43 PM on February 11

I don't think there's any sort of "technique" here. You need to call the management agency back, work your way up to someone with real authority if you can find them, and tell them (politely; be friendly about it) that given the current economic climate, a $100 increase just doesn't work for you, and you'd like to see if that can be negotiated. Let them know that if it's not up for discussion, you may not be able to renew.

I would not give them a totally clear ultimatum, because then if they're not going to do anything, it lets them start planning on getting a new tenant. Being just a little big vague is better, since it drags the process out. Even if they say "no, we can't do anything for you," don't give them a hard answer until the very last possible day you have to respond by — this keeps them from making any sort of binding agreement with a new tenant, and might give you a little leverage if when you call them right at the last day, and ask one last time for a break.

Whether you're going to have any success or not is going to depend entirely on how quickly they think they can fill your apartment. If they have a list of people waiting on units, you're screwed; they have no reason to do anything but tell you to get out. But if they think it'll take a few weeks to find someone, then it would make sense for them to give you a break. (Are there any units in your building or in other buildings managed by the same company that are empty? Do they have a lot of 'For Rent' signs out, or ads running? Those would all be good signs.)
posted by Kadin2048 at 10:54 PM on February 11

Also, I really would not bother bringing up macroeconomic stats about the recession, unemployment, housing prices, etc. All that stuff is totally irrelevant to the negotiation at hand; the only thing that matters is the landlord's perception of how easily/cheaply replaceable you are. If they think they can toss your carcass out on the street and find someone willing to pay $100 more per month within two weeks, out the door you go.

Their perception is going to be based on highly localized, microeconomic factors that you probably don't have access to: current vacancy rates, number of inquiries and showings, the number and quality of new applicants, plus a lot of soft psychological factors. It's entirely possible that, owing to the building's location or whatever, they're not really feeling the recession, and that an 8% take-it-or-leave-it rent hike is totally in line with demand. I think that's a little doubtful, but neither you or I can really know.

But that's not really a case you can argue; they're either going to negotiate or not based on their perception of what's profitable (assuming rational behavior, of course; it's possible they might do you a favor just to be nice, or screw you just to be mean, but I'd say both are unlikely). The most you can do is stack the deck a little in your favor by asking now, and if they say no, draw out your decision until the last possible moment and then give them a "best and final" and see if they take it when you're right on the response deadline. Maybe they'll take it, maybe they won't.

Good luck.
posted by Kadin2048 at 11:08 PM on February 11 [3 favorites]

@zephyr, 20 million unemployed, the spiraling economic crisis and recession, global stock market crash, corporate financial ruin, etc, indicate that there is an argument against a rent increase. There has been a tumble in housing prices, and a record drop in consumer prices with analysts predicting further drops in the months ahead, so hopefully it follows that there should be at least a stabilization in rent prices and a renter friendlier market in general.

All of this stuff is irrelevant. The only thing that is relevant is what the market will bear this month (not in several months). If someone else is willing to pay $2500 a month that is all they care about.

Regardless, you can make a counteroffer, and they'll accept it or they won't. Kadin2048 has good suggestions along these lines.
posted by grouse at 11:17 PM on February 11 [2 favorites]

avex: There has been a tumble in housing prices...

... because demand has plummetted while supply has stayed steady or increased in some quarters. Remember that housing is microcosmic, not macrocosmic; I doubt I'd ever be able to argue my landlord down because "property values in the neighborhood are lower today," and good luck if that's what you plan to do.

In order to replicate the drop in housing prices, you have to replicate the drop in demand for housing. Which is to say: you have to tell them that you won't or can't pay the extra $100 a month, and that you're quite happy to start looking for another apartment if that's going to be the price.

Oh, you say, but that won't work! They'll just say that's fine with them!

Well, tough titties. Sorry. I've never lived in NY, but I lived in Boston for two years, and my experience with landlords was that they weren't the types to be convinced to keep the rent low by a well-reasoned plea or a powerpoint presentation on the economy from a tenant.

Besides, they might not be fine with you just up and moving out. If, as you say, housing prices are dropping, and they're dropping in your neighborhood on apartments in your price range, then maybe they'll decide that it's not worth the hassle to find a new tenant; of course, if those things are true, then it might well be worth the hassle for you to find a new apartment.
posted by koeselitz at 11:18 PM on February 11 [1 favorite]

Once more, with brevity:

The only "strong case for keeping the rent low" that a landlord will ever hear is the case that begins and ends with "I'm moving out, and you probably won't find anyone to replace me."
posted by koeselitz at 11:20 PM on February 11 [7 favorites]

I just got hit with an 8% increase in Chicago and tried to reason with them, suggesting a slightly lower increase. I was rebuffed, sent a stern email and was told that they were no longer offering me a renewal. YMMV. My landlord believes the place is worth more than I do and acted offended. Dealing with an agency might help to avoid the crazy reasoning I've gotten but I would be prepared to move out. Even though I think my place isn't worth the increase someone else will.
posted by Bunglegirl at 12:23 AM on February 12

Yes, you can, without too much effort, but only if your rent is roughly average for the area and the market is relatively soft. You'll only know this if you start looking for another apartment. You never know... your rent might actually be higher than the area average, and the landlord is taking advantage of your desire to not have the hassle of moving.

Either way, give the management company a chance to be gracious when you negotiate. Their hands might be tied by the property owner who has a particular number in their head and won't be budged. If that's the case, though, if your counteroffer is rejected, the management company themselves might be able to recommend another property for you. Particularly if you've been a stellar tenant!
posted by Grrlscout at 12:27 AM on February 12

If rents really are dropping, why not get a better place for the same money?
posted by aquafortis at 1:21 AM on February 12

Does anyone have any advice on how I can convince the landlord that it is a poor time for a rent increase? Do I have any grounds to push back, or am I at their mercy?

Here's what you do:

Stage 1: Go visit some letting agencies, and find a comparable apartment which costs less than yours will after the rent increase. Or better yet, several.

If you can't find apartments you'd be happy living in, costing less than your current one post-rent-increase, you're boned because you can't threaten to move (or more precisely you can't follow through on the threat, and the landlord knows that, so it's not a credible threat) and the landlord has no reason to give up the $1,200 he could make by getting a new tenant.

Stage 2: Contact the landlord/letting agency and say "I like my current apartment and I don't want the hassle of moving to a new place any more than you want the hassle of finding a new tenant. Unfortunately, I simply cannot afford a rent increase of $1,200 per year, especially with so many more affordable properties on the market. If a rent increase is unavoidable I will begin making preparations to move."

Stage 3: Either they get back to you and negotiate the rent increase down, or they don't and you move to a different apartment. Moving may be a hassle, but it's a hassle that saves you $1,200 so it's worth doing.
posted by Mike1024 at 1:30 AM on February 12

I second what Mike1024 says. Check craigslist and see what comparables in your neighborhood are going for, and look at a few. Then see if it's worth staying. I think the landlord is counting on you not wanting the hassle and expense of moving for just a bump up of $100 a month, so if you acknowledge that to them, but then let them know that you're willing to move anyway, they may come round.
Bear in mind, however, that there may be no downside to the landlord if you move out. If you paid the brokers fee to move in, there is no expense to the landlord, and if your building is anything like mine, the new tenants move in the day after the old tenants move out, so there is no loss of income either.
If you decide to swallow the increase, at least try to get some of the issues with the apartment resolved before the new lease signing.
Brokers generally have nothing to do whatsoever with an apartment once the lease is signed and keys delivered. It's their job to get the place rented only.
posted by newpotato at 3:47 AM on February 12

Read this article and show it to your landlord. Let them believe you are willing to move, but will stay for the convenience if the rent remains flat. Otherwise, they will be facing a hard time replacing a good tenent like you who pays the rent on time.
posted by JohnnyGunn at 4:04 AM on February 12

Or at least that is what I am hoping.

I don't know why you're trying to explain your position, as it makes absolutely, positively no difference whatsoever, at all, in any way, shape, or form whatever the feelings, misgivings, thoughts or ideas that we, the internet, might have for this subject. Our opinion on the matter is only slightly less important (though, let there be no doubt, just as useless) as your opinion on the matter. The management company has decided to raise the rent. Soooo... that's about all there is to that. That's how the free market works.

Of course, just because they're hitting you up for more rent doesn't mean they're actually going to get it, but you have to be ready to walk. Now... I realize the following won't come off as terribly helpful advice given the timing and all, but lesson #1 to being a New Yorker is that it is your sacred duty to constantly be looking for better digs. That's the whole advantage of living in New York—you're much better staged to be looking for a better apartment once you're in the city. If you were honestly counting on the good-natured-ness of your New York city landlord to keep the rents reasonable, well... let's call that lesson number #2.
posted by Civil_Disobedient at 4:17 AM on February 12 [2 favorites]

If you can't get them to lower the price, you might be able to get them to give you a few more months' at the current rent so you have a little longer to look--MoneyMate Kate, a personal finance blogger/massage therapist living in Manhattan was able to do this recently.

Also, did you move in one year ago, or did you just resign a one year lease last year? It makes a difference in terms of how long/how much work they'll have to do to get the apartment ready to lease again (new paint is required every three years, etc). You might be able to use that as a bargaining chip.

You don't mention if the apartment is rent-stabilized but it sounds like it might be, from their 4% increase. If you offer to sign a two year lease, you will get a better deal on what they'd raise it next year.
posted by peanut_mcgillicuty at 6:56 AM on February 12

As someone who lives in NYC and has been paying intense attention to the real estate market, you should absolutely make a plea for no increase or a rent decrease. Yes, this goes against everything anyone has ever heard about NYC, but the times, they are a changin. The markets are taking a downturn, and the slide is just beginning.

Here's why you have an advantage at the moment... you are a known quantity. They can depend on you to pay $2400 a month, and you are already in the apartment. All it would take is for your apartment to stay empty for one month to blow any profit they would make on an increase should you decide to move. Have you noticed any other empty apartments in your building? If so take note. If they are taking longer to fill, then the landlord is already hurting. Let's face it, a sixth floor walk-up is also a less than desirable situation. With more choice in the market, the type of apartment you live in will not be high on someone's list.

I was going to point you to that Curbed article that minkill posted, use that as your road map. I used a similar tactic in 2002 to get a 1 br in a building where I was already living with a roommate. The landlord wanted $1300, and the apartment had been sitting empty for three months (this was early 2002, not long after 9/11). I was able to talk him down to $1000. I lived there for six years, when I left my rent was still only up to $1135.
posted by kimdog at 6:59 AM on February 12 [1 favorite]

I'm chiming in here with a different opinion. I don't know anything about the New York rental market, but know quite a lot about it here, as my husband owns numerous rental properties. The rental market is very strong right now, which may be the reason they're upping your rent. New mortgages are difficult to get, and foreclosure evictions are forcing people from their homes. Where do you think these people are going? To rentals! I'm sure your landlord already ran the numbers and is aware of what the market will bring. But maybe not, maybe he's just trying to improve his cash flow for his own personal reasons.

I think you're going to have to bluff it out first, and see if you can get a counter offer from them.
posted by raisingsand at 7:52 AM on February 12

Nthing that you are wasting your time looking for "sane, logical arguments against an increase."

They'll increase it as long as someone -- anyone -- will pay the higher price.

You should counter-offer, and see how much the hassle of replacing you is worth to them.
posted by rokusan at 7:55 AM on February 12

Yes you can argue the price down. I had landlords offering me rent reductions without me even asking when I was looking for a place a month ago. The market is bad, now is the time to negotiate. Just tell them you don't particularly want to move, but there are a number of comparable places on the market for significantly less and you want them to match the market. See what they come back with. And seriously, I know you don't want to move, but people are getting some amazing deal in NYC right now, it's really worth it to at least see what you can get especially if you aren't in love with your current place.
posted by whoaali at 9:09 AM on February 12

Other than knowing that the rental market in NYC is FUCKING NUTS, I don't know much about it, but I do know in Chicago landlords can only raise the rent about 10% (someone please correct me on this, I know I'm mis-remembering.)

This is wrong. There are no such rules in Chicago.
posted by iknowizbirfmark at 9:19 AM on February 12

whoaali: The market is bad, now is the time to negotiate.

Unfortunately, the market is different in different places, and the fact that the broker is calling anxiously wanting to know if the apartment is going to be available isn't a good sign along those lines.
posted by koeselitz at 10:25 AM on February 12

whoaali: The market is bad, now is the time to negotiate.

Unfortunately, the market is different in different places, and the fact that the broker is calling anxiously wanting to know if the apartment is going to be available isn't a good sign along those lines.

She's in NYC, I'm in NYC, I'm talking about NYC. This is the same crap a lot of brokers are pulling right now to try and get people to renew their leases asap because the market has changed since a lot of people last signed and many don't realize that for once in NYC renters actually have some pull. Not a lot mind you, but it's a far more even playing field. Even from 6 months ago things have changed drastically. I don't have a job and in Sept. half the people I emailed about places never got back to me to even look at the place and I got turned down by 5 places before getting a sublet. When I moved in Jan/Feb, everyone was emailing back and I had tons of great offers and only one place turned me down for not having a job (in NY this is generally a huge deal breaker even with a cosignor). I was able to negotiate down the price on a couple places, I had virtually no competition.

And it isn't just me I know two groups of people who used to live in Brooklyn and used this as their chance to get into Manhattan. They literally went to a broker, told them their price, what they wanted and where they wanted it and the broker then made an offer to the landlords who took it. Another friend just moved out of a 1 bedroom in a gorgeous building in the West Village, the management company's asking price for the new tenants was $200 BELOW her rent on a lease she signed 2 years ago. I'm going to take a wild guess that they will go lower. If I had a job and knew for sure I would be here for the next two years, I'd be jumping on locking down an underpriced 1 bedroom in Manhattan.

I have a friend in virtually the same position as the OP. Broker trying to get her to sign a new lease with ONLY a $50 increase and if she signs now (3 months before her lease is up) she'll get a $100 amazon gift card. She's just started looking and already found nice places for cheaper and that's before the negotiations have even begun.
posted by whoaali at 11:18 AM on February 12 [2 favorites]

I skimmed through the answers, I don't think anyone posted this.
posted by ttyn at 11:19 AM on February 12

Ah. Then threatening to leave may work, after all - that's pretty cool.
posted by koeselitz at 3:49 PM on February 12

There was a happy ending to this story. The landlord decided to keep the rent as is and not push for a rent increase.

Thanks to everyone for the advice and encouragement!
posted by avex at 12:05 PM on March 27 [2 favorites]