LOWER MANHATTAN (WABC) --New York City's Rent Guidelines Board rejected a potential rent freeze in its meeting Monday.
The Board approved a 1% increase for 1 year leases and 2.75% for 2 year leases.
The vote came at the Great Hall at Cooper Union.
The board had never frozen rents for the city's 1 million stabilized apartments.
Mayor Bill de Blasio urged the board to impose a freeze as part of his push for affordable housing.
His appointees now make up a majority of the board.
In a statement, the mayor's spokesman Wiley Norvell said, "While Mayor de Blasio believed that a one-year freeze and a 3 percent raise on two-year leases was the best option for New Yorkers struggling in the affordability crisis, the administration is heartened that the RGB heeded calls to keep any increase at a historic low."
Council Speaker Melissa mark-Viverito called the vote "disappointing."
"While we appreciate that the increase was kept to a minimum, as our city's housing crisis comes to a head, it's crucial that we utilize every opportunity to fight for and preserve affordability for the New Yorkers who call this city home," she said.
"The struggle isn't over," said Katie Goldstein, Executive Director of Tenants & Neighbors said. "Tenants deserve a rent freeze and we will continue to organize for one for the low and moderate income tenants in New York City."
The anger boiled over at the committee of nine.
Hundreds of activists did not fight this hard to see their dreams of a rent freeze slipping away, an outcome that even seemed to shock the guy who cast the deciding vote.
For weeks, tenants groups have been beating the drum for zero increase, among the city's rent-regulated apartments.
It's a cause Mayor de Blasio campaigned on, claiming the board has allowed rent to creep way too high.
He appointed six members of the nine person board, which sets the increase each year. Monday he dove right in, and told them exactly what he wanted.
"I'm encouraging all the members of the Rent Guidelines Board to vote for a freeze," said the mayor.
"I agree it is not a political win for the mayor," said board member Steven Flax.
But it was Flax, one of the mayor's own appointees, who angered the crowd by agreeing to a proposal advanced by landlords, who in the end pitched a one percent hike for one-year leases, 2 and 3/4 for two years.
Flax, who himself is a developer of affordable housing, could not say no, saying "It costs money to run buildings."
And so in the end, instead of a rent freeze, there will be the lowest hike in history. But still, not enough for the scores of tenants, convinced this whole process is simply broken.
"They have been profiting for the last forty years! The people have been suffering! And they still want more. It's greed, landlords greed," said tenant Steve Nurse.
Eyewitness News has learned more about the behind-the-scenes political gamesmanship that helped landlords representatives defeat the rent freeze they feared.
Knowing they must defeat the freeze at any cost, at the last minute owners say they bagged their own proposal for a more sizable increase and instead put forward a 1 percent plan previously proposed by Flax, on the theory that he would be unable to vote against his own idea. And he was. And so landlords defeated the rent freeze.
On an open mic, Eyewitness News captured Flax asking board chair Rachel Godsil, "How the f--- did this happen?"