Lawyers for the city vow to appeal.
The rent board in 2008 set a maximum rent hike of 4.5 percent for one-year leases and 8.5 percent for 2-year leases.
But instead of a percentage increase, it ordered tenants living in the lower-rent apartments for more than six years to pay $45 a month for one-year leases and $85 a month for two-year leases.
That resulted in those tenants paying a higher percentage rent hike than other tenants.
New York City Council Speaker Christine Quinn hailed the decision, saying "I believe it was a real victory for tenants, particularly low income tenants who have put down roots in their neighbors."
The city's law department said in a statement, "We intend to appeal, and will seek to ensure that the ruling does not go into effect until the appeal has been decided."
