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How Does Your Landlord Calculate Your Rent?

While the increase, from $2,400 in 2009 to $2,850 in 2016, broke down to a relatively modest 2 or 3 percent per year, Mr. de Blasio, who declined to be interviewed for this story, had spent the previous two years calling for — and getting — zero percent increases for the city’s rent-stabilized units.

While the Rent Guidelines Board sets increases for the city’s million or so rent-regulated tenants, increases on market-rate units are entirely at the discretion of landlords, who weigh potential profits against the possibility of losing reliable tenants and the cost of vacancy. As for determining what the market rate is, small landlords say they do various things, from looking through nearby listings to asking neighbors and visiting open houses.

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From left, Amit Kalra and his tenants Helal Touryalai and Wajma Touryalai (with their children, Rayan and Zain). As a landlord who lives in the neighborhood, Mr. Kalra said, “you become conscious of the tenants’ situations and that the biggest check they write every month is to you.” Credit Brad Dickson for The New York Times

And in New York, there are many more of those small landlords than you might think. The Rent Stabilization Association, a landlord advocacy group, says that 70 percent of its 25,000 members are small-property owners, who have one or two buildings with no more than 48 apartments in each.

Christopher Athineos, who with his parents owns 150 apartments in 9 buildings, a mix of rent-regulated and market-rate units in Bay Ridge, Park Slope and Brooklyn Heights, said that while “obviously this is our business, you get close to it” — especially if you get to know your tenants well.

His parents bought their first property in 1968 and still live in one of their buildings. Mr. Athineos grew up with some of his current tenants and goes to their children’s baptisms and other events. He even agreed to help the niece of an older tenant scatter the ashes of that tenant when she passed away.

“I do cut people a break. I have a couple of senior citizens in Bay Ridge — one woman, her husband passed away a long time ago, she’s in her 80s, on fixed income. I’m like, ‘Sign the lease renewal, no increase,’” Mr. Athineos said. “Or I increase her $5, so she doesn’t feel like a charity case.”

For other tenants, he said he usually raises rent by 1 to 3 percent on the second renewal. “No one likes an increase on their first year,” Mr. Athineos said. “But I’ve made the mistake in the past where I don’t increase them for four years, then all of a sudden, you have to ask them for $75 or $100, and they’re like, “‘Oh my god, you’re killing me.’”

The key thing, landlords agree, is to hang onto good tenants — the ones who pay on time, take care of the apartment and call you when the radiator’s leaking all over the floor, but not, as one landlord said, “because the refrigerator makes too much noise.”

Minimizing turnover is important, because empty apartments have to get cleaned, repainted and repaired. And there is often at least a one-month gap between tenants, with no rent coming in. Some landlords avoid raising the rent at all when they have a good tenant, preferring to catch up to the market the next time they list the apartment.

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Jude Bernard with his tenant Lilia Levine. Mr. Bernard said he prefers not to raise rents on tenants who don’t cause problems: “My unwritten rule is: You don’t bother me, I don’t bother you.” Credit Brad Dickson for The New York Times

“I never raise it when they’re there,” said Jude Bernard, who started buying brownstones in Clinton Hill, Brooklyn, in the late 1990s. “I was lucky enough to buy my buildings when they were well, well below what they’re worth today. My mortgage is very low. My unwritten rule is: You don’t bother me, I don’t bother you.”

One tenant whom he had been renting to since 2006 “was like a ghost,” he said approvingly, so he was happy to keep her at the same rent that she paid when she moved into the three-bedroom duplex garden apartment, $2,500 a month. But last summer, the tenant got a new roommate who started calling him all the time about what he said were minor problems or nonissues. So at renewal time, he sent them a letter raising the rent to $4,500.

“She assured me her new roommate would not be calling me anymore, and we negotiated a new rent of $3,500,” Mr. Bernard said. “From what I gathered, the new roommate came from a Manhattan doorman building and was accustomed to ‘Hey, a light in the apartment is out.’ That’s not brownstone living. We don’t do concierge service.”

Landlords who share houses with their tenants are often even more willing to go below market rate — sometimes substantially — for a friendly tenant.

Mary and Larry Heintjes are artists who own a carriage house on the border of Fort Greene and Clinton Hill, and rent out a studio apartment across the hall from their two-bedroom. The unit goes for well under market rate.

As Ms. Heintjes explained, “We wanted a certain kind of person, someone who is kind and communicative. We didn’t want to lose that kind of person by charging a rent that would be for someone who is more corporate.”

That view was shaped by their history in the house. The same day that they closed on the property in 1997, Mr. Heintjes’s mother had a stroke. During the renovation, they decided that she should move in with them. She stayed for five years, until she needed round-the-clock care, which is when they turned her room into a studio apartment. With property taxes increasing and their two daughters nearing college age, they needed the extra income, but they wanted a renter who felt like family.

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Christopher Athineos with his tenant Torhild Espeland. While 1 to 3 percent yearly increases are standard at his properties, Mr. Athineos said, some longtime renters see only nominal increases. “Obviously this is our business,” he said, but “you get close to it.” Credit Brad Dickson for The New York Times

Charging considerably below market rate has allowed them to get just that. Previous tenants, a couple who bought a house in Albany, stay with them regularly when they are in the city. But last spring, they needed to find a new tenant after nearly a decade with virtually no rent increases, so they consulted a friend, Craig Meachen, who is also a real estate broker. He helped them calculate a rent that was several hundred dollars higher than they had been charging, getting them closer to market rate.

But even in the coziest relationships, money — and paying the mortgage — can be a big issue.

After Bibi Calderaro, an artist and broker, and her husband, a photographer, bought a townhouse in Bed-Stuy six years ago, they rented out the garden apartment for $1,800 a month. The first few tenants were on yearlong fellowships, and another moved out because she wanted a dog. With every transition, they recalibrated the rent to the rising market.

Last year, they listed the apartment for $2,300, or $100 more than the previous tenant had been paying, and got no takers. Then they lowered the price to what the last tenant had been paying, and still it didn’t rent. Grudgingly, they lowered it again, to $2,175, in response to what the market was telling them. But that didn’t make the rent decrease any easier to take.

That monthly income is how “I pay my mortgage,” Ms. Calderaro said. “We’re not only trying to keep up with inflation, but the real estate taxes have gone up. Our economy is much more fragile than larger landlords’.”

Still, if there is a common thread among most small landlords in the city, it is that they choose not to chase the highest rent they could get.

When Marta Satwin-Ramberg, an architect, and her husband, a graphic designer, bought and renovated a three-unit rowhouse in Ridgewood, Queens, six years ago, they picked a midpoint between the going rate for unrenovated apartments in the area and what seemed like unreasonable asks in several nearby buildings that developers had redone. Last fall, they asked $2,000 for a railroad-style two-bedroom.

“I’m not going to be pushing the top boundaries of what I could get, “Ms. Satwin-Ramberg said. “I’d rather rent to friends of friends. I feel like the way I set those rents are what would be bearable for me.”

Amit Kalra owns three properties in Queens and several more in Nashville, to which he applies very different rental philosophies.

He bought his first building, in Woodside, seven years ago, after his father died. His mother took one of the six units, and for a time, his sister lived in another. He lived right around the corner and got to know the tenants well, inviting them to barbecues at his house.

When taxes or heating costs go up, he sends them a letter explaining the increase and how it will affect their rent. And for the past three years, he has kept the rent flat for a tenant with a special-needs child.

In Nashville, however, he uses a management company and, until new inventory started flooding the market last year, would regularly ask for 6 or 7 percent annual increases. He made his decisions based on recommendations from the management company and his own research on the market there.

“I don’t see the Nashville properties every day, so I treat it more like a business,” Mr. Kalra said. “In Woodside, it’s much more friendly. You can’t help but be emotionally attached. You become conscious of the tenants’ situations and that the biggest check they write every month is to you.”

Being cognizant of those things can certainly make asking for more rent difficult, as Mr. Chukudebelu, the landlord in Bed-Stuy, discovered when he finally approached his $1,450-a-month tenant about an increase. At first, he asked for $100 more a month, which she agreed was reasonable. But the next year, when he tried to raise it another $100, she balked, and they negotiated a two-year lease with $75 and $50 increases, which would eventually bring the rent to $1,675.

After that, he said, “came the moment of truth.” He asked for another $75 increase, wanting to bring the rent to within a few hundred dollars of the $2,000 market rate. “And I knew that was a stretch for her,” he said. “That definitely weighed on me. But then I was like, ‘Do I take a loss so she doesn’t?’”

Ultimately, the tenant got a roommate, and they now pay $1,800 a month, which puts the rent close enough to market rate that Mr. Chukudebelu can ask for much smaller increases at future renewals.

In hindsight, he realized that his impulse to avoid raising the rent at all on a good tenant was well intentioned but a bit naïve, since it put him so far behind. “I wanted to be compassionate,” he said, “but that was a little too much of a compassionate viewpoint.”

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