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FRIDAY, NOVEMBER 7, 1975
THE MAJOR CHANGE FOR POST-WAR DOMESTIC PREMISES RELATES TO THE PROPOSED CHANGE IN THE FACTOR FROM '5' TO '4". THE SPOKESMAN EXPLAINED THAT THIS CHANGE WAS IN KEEPING WITH THE GOVERNMENT'S POLICY OF GRADUALLY CLOSING THE GAP BETWEEN REGULATED AND MARKET RENTS.
HE EMPHASISED, HOWEVER, THAT THERE WAS TO BE NO CHANGE IN THE MAXIMUM PERMITTED INCREASE OF 21 PER CENT.
THE PRESENT FORMULA HE EXPLAINED WAS TO TAKE THE DIFFERENCE BETWEEN THE CURRENT RENT AND THE ESTIMATED FAIR MARKET RENT AND DIVIDE BY '5'. PROVIDED THE RESULT DOES NOT EXCEED 21 PER CENT THIS IS THEN THE PERMITTED INCREASE UNLESS THE RATEABLE VALUE EXCEEDS $30,000 IN WHICH CASE THE FULL INCREASE APPLIES.
FROM NEXT YEAR
THE FACTOR WILL BE '4'. THE INCREASES WILL THUS BE ONE-FOURTH OF THE DIFFERENCE BETWEEN THE CURRENT RENT AND THE ESTIMATED FAIR MARKET RENT, BUT SUBJECT TO THE 21 PER CENT MAXIMUM.
AS CURRENT RENTS ARE STILL WAY BELOW MARKET RENTS THIS WILL MEAN THAT PERMITTED INCREASES IN RENTS IN 1976 CONTINUE AT AROUND PRESENT LEVELS.
FOR EXAMPLE, A SMALL TENEMENT FLOOR ON A CURRENT REGULATED RENT OF ABOUT $330 PER MONTH, HAVING A FAIR MARKET RENTAL VALUE OF $580 PER MONTH, WOULD PAY AN INCREASE OF $62 PER MONTH OR JUST UNDER 19 PER CENT. FOR A MEDIUM FLAT ON $1,000 PER MONTH HAVING A FAIR MARKET RENT OF $1,800 PER MONTH THE INCREASE WOULD BE $200 PER MONTH OR ABOUT 20 PER CENT.
THE SPOKESMAN POINTED OUT THAT INCREASES IN RENT UNDER THE ORDINANCE ARE PERMITTED ONLY EVERY TWO YEARS,
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