Rent Guidelines Board Gives Preliminary OK To Hikes Up To 4%, Disappointing Landlords

The Rent Guidelines Board held a preliminary vote Wednesday that set a wide range for how much owners of New York City’s rent-stabilized apartments can raise rents, but landlord groups argue that even the highest end may not be enough to save the city's deteriorating housing stock. 

The framework, approved in a 5-4 vote, would allow a final increase of between 1.75% and 4.25% for one-year leases and 4.75% and 7.75% for two-year leases. The final vote by the nine-member board is set for late June, and any changes would impact leases signed on or after Oct. 1.

Approximately 1 million apartments across the five boroughs are affected by the RGB’s decision. Many of their owners have said that interest rates, inflation and the state’s 2019 rent laws have made it impossible to maintain their buildings.

“In communities like where I live in the Bronx, buildings are seeing double and triple-digit increases to expenses,” New York Apartment Association CEO Kenny Burgos said in a statement following the vote. “The ranges approved tonight don’t begin to help. Even the high end of the proposed range would continue the defunding of older rent-stabilized buildings in the neighborhoods that need this housing the most.” 

A 2024 report by KBRA found that New York City’s apartment stock that was built before 1974, the vast majority of which is rent-stabilized, had a 25% distress rate by balance and nearly 7% by loan count. 

Foreclosures are also on the rise, although many lenders have little interest in taking over the buildings. In March, L+M Development Partners sued Santander Bank over its refusal to take the keys to a Harlem building after the landlord defaulted on its loan.

Values of the properties have cratered, with some portfolios selling for less than 50% of their previous sale price. Lenders, burned after watching the collateral for their mortgages deteriorate, are increasingly pursuing personal guarantees from owners borrowing for rent-stabilized properties. 

“We understand that the RGB can’t reverse the massive financial distress in these buildings by themselves, but they could have held the line and prevented the further deterioration of thousands of buildings,” Burgos said.

In a report released in March, the RGB found that net operating income of rent-stabilized buildings grew by 8% between 2022 and 2023. 

The NYAA claimed that the report’s methodology was incorrect. In a response, the group said the RGB included more than 120,000 free-market units that share buildings with rent-stabilized apartments. Some of those buildings have average rents in excess of $10K per unit.

In an April report, the RGB found that costs have risen by 6.3% between 2024 and 2025. Wednesday’s vote raised some eyebrows as the range for one-year leases caps rents well below the cost increase, although tenant advocates have countered that inflation has hit consumers hard and rents have historically risen far faster than wages.

“This RGB panel is on the same course as its predecessors of under-indexing rent increases; the preliminary range inexplicably doesn’t follow the math of its own data, which indicates a starting point of 6.3% for this year’s rent adjustment,” Small Property Owners of New York Board President Ann Korchak said in a statement. “The RGB must now take bold action, departing from its preliminary range and setting higher rent increases.”

Real Estate Board of New York Senior Data and Policy Researcher Henry Perez-Tlatenchi also cited the RGB’s operating costs report in response to the preliminary vote.

“If the higher range of adjustments proposed by RGB are adopted in June, it would provide meaningful assistance to rent stabilized housing, upon which over two million New Yorkers rely,” Perez-Tlatenchi said in a statement. “RGB’s own data shows increasing financial challenges and much more investment is needed in these aging buildings to preserve their long-term quality and availability.” 

Last year, RGB approved rent increases of up to 2.75% for one-year leases and 5.25% for two-year leases. The hike was slightly higher than the prior two years, which followed multiple years of no increases under former Mayor Bill de Blasio. RGB members are appointed by the mayor. 

Tenant advocates and some mayoral candidates, including state Assemblymember Zohran Mamdani and state Sen. Jessica Ramos, have supported rent freezes. In his role as New York City comptroller, Brad Lander also called for a rent freeze this year. 

Mayor Eric Adams has been more supportive of rent increases than his predecessor but disagreed with the higher end of the range set.

“I must be clear that an increase as much as 7.75 percent is far too unreasonable of a burden for tenants, especially as our entire city is feeling the squeeze of a 1.4 percent housing vacancy rate and a decades-long affordability crisis,” Adams said in a statement. “New Yorkers simply cannot bear these costs.”

The first public hearing leading up to the final vote is scheduled for May 22.