McClune and Schwan: $300 more is too much; Chen: That's the market. Is Mandy Management raising the rent to align with market rates, or does the megalandlord practically set the market rates? That question was asked at a Fair Rent Commission hearing on Tuesday evening, at which Lenox Street tenants Douglas Schwan and Natalie McClune succeeded in getting a monthly rent increase knocked down from $300 to $100.Schwan and McClune currently pay $1,300 a month for a two-bedroom, one-and-a-half bathroom apartment in the Annex neighborhood. Their rent has gone up by $100 per month each year for the last three years. This year, one of the city’s largest local landlords, Mandy Management, sought to bring their monthly rent up to $1,600. That was too far for Schwan and McClune.“When you look at this in its totality, it’s not just one year going from $1,300 to $1,600,” Schwan argued — it’s about a cumulative increase of $600 in four years.After an informal mediation attempt did not yield a resolution, the tenants and Mandy-affiliated property manager Adir Chen each presented their case to the Fair Rent Commission, which ultimately decided to lower the rent increase to $100. The hearing took place online via Zoom.The apartment is one of four units in the building. According to Chen, the rents at the other apartments range from $1,450 to $1,700. (McClune said she believed the upper limit was actually $1,675.) Both the tenants and property manager pointed to maintenance needed in the apartment as evidence either against or for the proposed rent raise.Mandy had provided the tenants with a list of maintenance performed in the apartment — such as replacing a refrigerator that the tenants claimed had been decades old — as one justification for the rent increase. Schwan argued that these expenses are ​“the basic cost of business of being a landlord. That’s common stuff that has to be fixed. … When you run a business, you have overhead costs.”In fact, he said, Mandy should actually compensate them for a basement flooding incident that took place shortly after the landlord came to fix a toilet. Schwan and McClune said they cleaned up the basement themselves. Chen countered that he couldn’t be sure whether the flooding was a direct result of the plumbing work that Mandy performed, and that any damaged property would be the responsibility of rental insurance to cover.Chen and Mandy lawyer Jeff Weisman also made the argument that a $1,600 monthly rent would align with the market rate of the apartment.“Would it be fair to say that the rental value over the years has not been adequately increased to reflect the actual value of the apartment, and to take into consideration the maintenance cost of the apartment?” Weisman asked his client.“Yes,” Chen said. He said that Mandy had solicited a market analysis from the real estate company Seabury Hill, which he said concluded that the apartment’s market value would fall between $1,650 and $1,750.Schwan responded that that figure comes ​“from a property management company that is also motivated to raise rent in the area. So this is hardly objective.”"Mandy Can Kind Of Set [The] 'Market'"Later in the evening, as the commissioners deliberated, they debated opposite philosophies about whether landlords should raise the rent in installments over time.“We often hear cases where there’s been no annual increase and the landlord then is trying to make up for lost time,” said Commissioner Wendy Gamba. ​“This body has decided often that is not an appropriate way to manage your rental property.” In the Lenox Street case, she continued, ​“there’s been small incremental increases year over year, which is the approach we have often suggested to landlords they take.” Commission Chair Elizabeth McCrea disagreed. “They’ve been increasing it for the last four years, so now they get another increase?” she asked. ​“It’s not the tenant’s fault. And I think another $150 increase after getting a $100 increase for the last four years, I think that’s a bit much.”Commissioner Elena Grewal took issue with the amount by which the rent had been raised annually. ​“I can understand raising the rent every year for sure,” she said. But $300 after several $100 annual hikes? ​“That is a high increase.”The commission also discussed the notion that the rent raise would bring the unit in line with the market.“I feel like the market rate is relatively arbitrary,” said Commissioner David Caruso. He argued that since Mandy Management has such a large presence in New Haven, and especially in the low-income housing market, ​“Mandy can kind of set ​‘market’ at whatever they want it to be.”McCrea echoed this sentiment. ​“Mandy is one of the few landlords that has a chokehold on this area,” she said. ​“They’re the ones deciding what market rent is because they pretty much own the lot of New Haven.” (In September 2023, Mandy Management CEO Yudi Gurevitch told the Independent that his company owned around 4,000 apartments across roughly 800 buildings in New Haven, West Haven, East Haven, and Hamden. His company sold two dozen New Haven properties last year.)Commissioner Dondre Roberts maintained that ​“the market can bear a two-bedroom, one-and-a-half bath at $1,600.” But he added, ​“I feel the tenant is entitled to some kind of compensation” for the flooding incident.“It’s also Section 8 [through the federal Department of Housing and Urban Development (HUD)] that is determining the market rent,” supplied Commissioner Douglas Losty — not just a handful of prominent landlords in the area. HUD’s 2023 ​“Fair Market Rent” assessment for a two-bedroom anywhere in the entire New Haven-Meriden area was $1,629 per month.In the end, Gamba suggested a $100-per-month rent increase instead of the proposed $300 per month, to put the increase in line with rent raises from previous years. She also proposed a $150 credit for the tenants’ work addressing flooding in the basement.Her fellow commissioners unanimously approved the motion, thereby setting the new rent at $1,400.