A powerful New York City panel recommended in a preliminary vote Thursday that housing costs in rent-stabilized apartments increase by between 2% and 6%, balancing raging inflation hammering landlords with a housing crisis amplified by the pandemic.

The Rent Guidelines Board, which sets costs in about 1 million rent-regulated units, voted by a 5-to-4 margin on the proposal, which set rent increases between 2% and 4% for one-year leases, and between 4% and 6% for two-year rentals.

The increase, if finalized, would be the largest since 2013 for more than 2 million New Yorkers living in rent-stabilized apartments. But it would mark a smaller jump than some renters had feared after frequent freezes over the past decade.

The annual inflation rate in the U.S. hit almost 9% in March, a 40-year high. But the city is battling a brutal affordable housing shortage after two long years of COVID.

The approved proposal was introduced by chair David Reiss and struck a middle ground between two plans floated by renters’ and landlords’ advocates on the board. Landlords’ representatives had sought an increase up to 9%, alarming renters.

That high-end hike was voted down by a 7-to-2 margin, with two of Mayor Adams’ three new appointees rejecting the measure. A separate proposal that would have held rents roughly steady fell by a 6-to-3 vote. Two of the three new appointees rejected that suggestion as well.

After the final vote, Cea Weaver, the campaign coordinator of the tenants group Housing Justice for All, issued a statement describing the middle-path proposal as a “slap in the face to New Yorkers who are still recovering from the pandemic and barely making ends meet.”

“Mayor Adams may have promised he’d work for working families, but at every turn, his administration has chosen to serve the wealthy and well-connected,” Weaver said in the statement.

Joseph Strasburg, president of the landlord-aligned Rent Stabilization Association, ripped the proposal from the other direction, saying that the board “continues to believe its duty is to operate solely as an affordability program for tenants.”

The vote, completed over Zoom on Thursday night, included a spirited virtual debate. Adán Soltren, a lawyer serving as a tenant representative on the board, suggested the board was toying with putting “owner profits over people.”

“The pandemic’s not over,” Soltren said, rattling off unemployment and eviction figures. “Yet tenants are being told: ‘Anyone can handle a small increase. And if not, the social safety net will catch you.’”

He suggested that board members were “either out of touch with the reality” of low-income New Yorkers, or were intentionally attempting to displace renters.

Sheila Garcia, another tenant representative, speaking from a room packed with renters, said the middle-ground proposal would be “devastating” for many in the room.

Robert Ehrlich, a board member representing landlords, made a far different case, saying a failure to escalate rent costs for stabilized housing could send properties into disrepair, warning of a return to “the horrifying days of the ‘70s and ‘80s.”

“Housing has costs,” Ehrlich said. “If we choose to authorize a rent increase that does not keep up with inflation and other costs, then we as a board are choosing to decommodify housing.”

The nine-member Rent Guidelines Board operates separately from City Hall, but consists of mayoral appointees. Adams added Soltren to the board, as well as Arpit Gupta, who represents the public, and Christina Smyth, a representative of landlords.

In a statement Thursday night, Adams said he “believed that the numbers initially reported were much too high, so I called for a better balance — and it is good the board moved lower.”

But he added in the statement that “if rents and the other costs of living are going to go up with inflation and other economic issues, then so too must government support.”

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