Zero Increase for Approximately One Million Apartments
Since 1 October 2026, a total rent freeze has applied in New York City across the metropolis's roughly one million rent-regulated apartments. Mayor Zohran Mamdani has thus implemented a key campaign pledge. In June, the Rent Guidelines Board (RGB) voted by a 7 to 1 majority not to permit any rent increases for one- and two-year leases. In the previous adjustment round in 2025, increases of 3 per cent for one-year leases and 4.5 per cent for two-year leases had been approved.
For property owners, this resolution significantly exacerbates the economic situation. Whilst income remains frozen, management and maintenance expenses continue to rise unabated. The RGB based its decision on surveys indicating that landlords' total expenditure had risen by 5.3 per cent in 2026, whilst their revenues grew by 6.2 per cent over the same period. Industry representatives, however, question whether this calculation reflects the actual financial burden.
Discrepancy in Operating Costs and Financing Pressures
Analyses by the New York Apartment Association (NYAA) highlight the cost increases in the second half of 2026. According to the data, expenditure on heating oil and natural gas at the end of September was 28 per cent above the forecasts set by the RGB for 2027 compared with 2025. At the same time, interest rates on 30-year mortgages climbed to 7.03 per cent, compared to 6.3 per cent in the prior-year period. Kenny Burgos, chief executive of the NYAA, emphasised that the RGB was ignoring at least 130 mandatory regulatory expenditures imposed by the city and the state. Furthermore, the reluctance of financing partners such as Flagstar is leading to perceptible capital outflows from the sector.
- —Energy costs for heating oil and natural gas are 28 per cent higher than municipal estimates
- —Mortgage rates for 30-year loans rose to 7.03 per cent
- —Retreat by lending banks accelerates capital outflows from the regulated housing stock
To cushion the impact, the city administration announced a programme offering discounted building insurance. The objective is to provide insurance cover for 20,000 residential units by 2027 and 100,000 units by 2030. Dan Kennedy, co-founder and president of RLTYco, views this as only marginal relief, however. Debt servicing represents by far the largest expenditure item for portfolio holders, and many landlords now lack the income required to service these interest obligations over the long term.
At the same time, the dispute is shifting to the courts. A lawsuit filed in July by five private owners seeks to overturn the RGB's determination and force a fresh vote. The legal contest is being led by former Deputy Mayor Randy Mastro for the plaintiffs and Steven Banks for the city's Law Department. In September, the court already ordered City Hall to disclose its communications with the decision-making panel in order to investigate any improper influence exerted on the RGB.
