New York rent freeze: What next?

**Andrew Peach** (0:01)
New York rents frozen.

**Joanne Grell** (0:03)
There wasn't enough housing, right? And so landlords raised rents on the apartments that they did have.

**Keri Burgos** (0:08)
These units cost around $1,300 a month. Insurance, property taxes, labour, utility, water, all these cost on a monthly basis.

**Andrew Peach** (0:16)
It's World Business Report from the BBC World Service. This is Andrew Peach on the way. Celebrations for some as that rent freeze is agreed, but landlords say it will mean further restrictions on housing. Also today as temperature records for June are smashed across Europe, our business is being affected and what will governments need to invest in if it's a sign of things to come?
We'll start, though, in New York City, and the housing board there are approving a pledge made by Mayor Zohran Mamdani to freeze rents for about a million apartments. The vote was greeted with cheers and whistles from hundreds of people gathered in Manhattan as the Rent Guidelines Board approved the freeze on one- and two-year leases. But why is it necessary? I've been talking to Joanne Grell, who co-chairs the Rent Freeze campaign.

**Joanne Grell** (1:08)
You come here, you're looking for an apartment. You're going to start out at $3,600 a month. And a typical renter moving into a new apartment would have to earn about $70,000 or more in income just to afford the asking rent, right? And now to working class New Yorker, that is not the average salary. Let's talk about someone just coming out of college, wanting to start their life here. $70,000 is a lot. And so the problem isn't just that the rent is high, although that is a problem, but it's also that the wages don't keep up. And so it's become increasingly unaffordable, not just for the new people coming here, but for ordinary New Yorkers that have been living here their entire lives.

**Andrew Peach** (1:53)
And help me with what's changed, because surely all of that has always been true. People have always moved to New York. Property prices have always been high. Surely all those factors have been there for decades.

**Joanne Grell** (2:05)
Yes, and that is true. But what I know is that there also has been a nice amount of affordable apartments. And there are still now 1 million affordable apartments. And that is what happened with the rent freeze. We working class New Yorkers don't live in high-rise buildings with doormen and pools and such amenities. I'm talking about working class New Yorkers that have to struggle every month to pay a rent that is affordable to them. So yes, there has always been, you know, the rent has always been high in Manhattan in certain parts, but now it's coming to every borough. So now Brooklyn is unaffordable. Now Queens is unaffordable. And the last borough is Bronx and they're now gentrifying that. And so they build these high-rise luxury apartment buildings for people to come into the city that can afford it. And that's just not the average story for a working class New Yorker.

**Andrew Peach** (2:56)
And is there no way the market will fix this in the end by if you can't fill the jobs that need to be filled in New York because people, as you say, can't afford to pay their rent if they're doing what you might call an ordinary job. Eventually, that system falls apart without necessarily needing state intervention to make it so.

**Joanne Grell** (3:18)
One of the problems has been that there wasn't enough housing, right? And so landlords took advantage of that and they raised rents on the apartments that they did have. And so that's how rents just started going up and up and up. But now, we have a mayor who has promised to build over 200,000 units, which is going to make a huge difference for the people of the city, not only of 200,000 units, but 200,000 affordable units. And working an ordinary job in New York is your fire department worker, it is your secretary, it is your nurse, it is your, you know, everyday taxi driver, everyday New Yorkers, and we're all feeling the pinch.
So it's just out of control right now. But luckily we have tools in our toolbox, and we're going to definitely take advantage of all of them so that we can control this out of control housing crisis.

**Andrew Peach** (4:14)
What about landlords in all of this, Joanne, because they've set up an arrangement where they're renting out their property at a market value, and they're suddenly told that that's not going to continue for a huge period of time ahead. What about their insurance and their other costs?