Tenants challenging minor rent increase

[Wesley W.]

Some context…

Small multi-family building (4 units) self managed. One of the upper units went vacant and needed an update (flooring, paint, etc.). Power tool work began no earlier than 9:30am and finished no later than 6:30pm. Shorter duration on the weekends. This was a large apartment, so it took approximately 3 months to complete working alone and sometimes with a helper (hired help is virtually nonexistent currently in NY). The building is “downtown” – solid C-class. Buildings are about 6 feet apart up and down the block.

Downstairs tenants are relatively “high maintenance” – having 14 service calls and/or requests since moving in July 2020. Oftentimes “tacky tack” stuff, and thus take up a disproportional amount of my time. They pay their rent on time (as everyone should).

Across my portfolio, I typically raise rents every year (approximately 3%ish) – enough to cover my increased expenses but not any increased cash flow. This often does not keep up with market rents, so on a turn I usually bump it up substantially.

These downstairs folks were due for a rent increase on July 1, but I waited until the renovation was done upstairs and made the increase effective September 1. The raise was $20 on their $995 rent, a 2% increase in 14 months. The CPI (which leaves out fuel and food) exceeded 4% over that same period.  This is also literally the first time in my career as a landlord (about 100 tenants at this point) that a tenant has questioned a rent increase.

Yesterday I got this email from them:

I do not believe that after what turned from weeks to months of listening to power tools for the majority of our down time, a rent increase is a reasonable request right now.

A postponement of increase until January would be 3 months from the date you provided, roughly the length of construction.

We enjoy this apartment, and arent going to be leaving anytime soon. I dont want to cause conflict over $60, but, this feels like a slap in the face after we were very patient for a long time.

Now, setting aside that extending the increase to December is actually 4 months, here are my thoughts and I want to see what you all collectively think.

First, the renovations and the increase are not at all related. One thing does not have to do with the other from my stance. Living in an apartment building comes with a level of tolerance for the activities of others. When these folks leave for the day and their dog howls the entire time, that’s sometimes to be expected in close quarters (so I think). Or when they smoke in their apartment (a lease violation) and it permeates throughout the building into the other units.

In order for me to provide a safe and well-maintained space for people to live, I must sometimes use power tools to accomplish that. Before these folks moved in, I was in their apartment for weeks - drilling and sawing – not a preferred experience for the other 3 tenants in the building, I am sure. The end result is they got to move in to a clean, updated living space for them to enjoy.

I think the level of service I have provided to them over the year has been higher than what they may receive elsewhere. I have always been professional and responsive, even though some of the concerns they raise are utter minutiae.

The $20 increase is not a “money grab” – my insurance premiums just went up 15%. The cost of goods is way above the incremental raise I am asking for.  I could go on.

I believe this is a conversation best had in person, and I will certainly raise all the points I’ve made above when that occurs. I may suggest a delay of onset to October as a gesture of goodwill, but my concern is I am rewarding the behavior of challenging and negotiating my rent increases, and looking for “compensation” for every inconvenience that comes their way. Since this is only $20/mo., I also think this is part of a power play on their part.

To those that are still with me, I hope this was interesting reading. Anyways, your thoughts?