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You expenses, and being underwater, have nothing to with what you charge for rent. Do you actually know they are staying for another year? Maybe they are looking for an excuse to move, and you are going to create one. Whether or not you are at or under market value is really a question your tenants need to answer in their minds, not the market in general. Your market today is your tenants, not the entire 'market'. You may be able to increase some, but if they are really good tenants, you want to have the golden handcuffs on them. The minute you lose them, you will have major additional expenses in terms of vacancy, maintenance, marketing, utilities, advertising, etc. You want a situation where your tenants cannot move anywhere else and pay less for the same situation. Your building, being the best in the area, is good, but the next tenants may not understand that, or may not care. Often, getting that extra few dollars cost more than it is worth. You can ask your tenants if their financial situation has improved. If it has improved, ask them what they could afford without too much sacrifice. If their financial situation has decreased, you are taking additional money from their mouths, and they may be looking for an excuse to move anyway.
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