Rent Freeze Approved On All Stabilized Leases, Delivering On Mamdani Pledge

New York City's Rent Guidelines Board on Thursday night voted to freeze rents on one- and two-year leases in the city's 1 million rent-stabilized apartments, fulfilling a key campaign promise for Mayor Zohran Mamdani. 

Only eight seats of the nine-member body were filled after Christina Smyth, who had served as a landlord representative since 2022, resigned just hours before the vote. In her resignation letter, she wrote that “this year’s RGB order was decided last year on the campaign trail.”

The remaining members were divided 7-1 in their decision, with Public Representative Arpit Gupta casting the only dissenting vote. The decision is especially noteworthy as it is the first time that rents have been frozen on two-year leases.

The decision has massive ramifications for landlords and tenants across the city. Property owners have argued that a freeze will drive many of them into bankruptcy, while many tenants claim raising rents would make it too difficult for them to afford to stay in their homes.

“The data show that most owners of rent-stabilized properties continue to meet rising costs, with overall financial indicators remaining stable, while a small segment faces measurable financial strain,” RGB Chair Chantella Mitchell said in a statement following the vote.

A Moody's study earlier this month found that only 6% of multifamily buildings backed by CMBS loans were likely to default on their mortgages if rents were frozen for five years. 

Maksim Wynn, the sole remaining owner representative on the board, argued before voting to freeze rents that raising costs on tenants would be more likely to reduce the income that landlords bring in by spurring some tenants to move out or stop paying.

“The data this board has reviewed suggests that for buildings with income-to-expense issues, increasing legal rents may counterintuitively decrease income,” said Wynn, a former city housing official who is director of development at Procida Development Group. 

“A 0% increase on one- and two-year leases is in owners’ best interest,” he added, while advocating for policy changes at the state and city levels to reduce property expenses.

The real estate industry nevertheless lambasted the decision as recklessly disregarding the economic realities facing owners, particularly those who own buildings built before 1974 that are close to 100% stabilized.

“Our message is clear: this freeze will destroy the living conditions for hundreds of thousands of New Yorkers,” New York Apartment Association CEO Kenny Burgos said in a statement.

Every year, tenant advocates swarm the public meeting to protest rent increases. Outside, protesters hold signs that read “Freeze The Rent” and unleash diatribes of landlord harassment and greed into a microphone. Just two years ago, before he was ever known as a mayoral possibility, Mamdani was arrested while protesting outside the vote.

This year was more of the same, with crowds filling El Museo del Barrio in East Harlem, chanting “no increases on our leases” and “down, down with real estate, up, up with tenant power.”

After the rent freeze was approved, the theater echoed with celebrations. Tenants smiled, embraced each other and took videos as they filed out, back into the street.

This year’s vote was particularly fraught. 

Mamdani’s campaign, which promised a four-year rent freeze, brought awareness to the process. Though the mayor is not legally allowed to influence the board’s decision, his administration has worked to organize tenants and encourage testimony at hearings.

Six of the remaining board members were appointed by Mamdani, despite efforts by his predecessor, Mayor Eric Adams, to stack the board during his final hours in office.

Small Property Owners of New York Board President Ann Korchak said despite obtaining a quorum, the vote should have been postponed until another landlord representative was appointed.

“The resignation of the only principled RGB member and the board’s only meaningful advocate for small owners validated our greatest fear, that the majority Mamdani-appointed RGB would cave to the political demands of City Hall,” Korchak said in a statement.

Smyth accused the RGB of ignoring evidence that shows expenses are outpacing income. The board’s reports indicate that net operating income has been on the rise, but landlords have blasted its methodology as failing to account for debt and including buildings with market-rate units.

An analysis of nonprofit lender Community Preservation Corp.'s portfolio of nearly 15,000 rent-stabilized units found that expenses are up 27% since 2020. Rents have grown 11% in that time.

In a statement shared prior to the vote, CPC CEO Rafael Cestero said regardless of the vote, “the outcome won’t solve the underlying issues of rental affordability for tenants, or the financial and physical distress plaguing rent stabilized buildings.”

CPC estimates that if rents are frozen all four years of Mamdani’s term — as the mayor vowed during his campaign — NOI for stabilized apartments citywide would drop from an average of $4,508 to $2,929, and that's before taking debt service payments into account. In the Bronx, which has the largest concentration of stabilized units, NOI would fall even further, and into the red, from $266 to negative $1,313. 

The nonprofit services a large chunk of Signature Bank loans backed by rent-regulated apartments — a portfolio it was given with the mission of preserving affordable housing. In addition to testifying in front of the RGB, CPC meets regularly with government officials in an effort to prevent distress from spreading further. 

As of December, CPC’s delinquency rate, including properties that have been foreclosed upon by the lender, was 12%, up from 10% in 2024.

“To succeed, we need a suite of solutions to lower expenses and create commonsense avenues to grow building revenue,” Cestero said. “Protecting tenants and preserving quality affordable housing are not opposing goals.”

In her resignation letter, Smyth called on Gov. Kathy Hochul to make changes to the Housing Stability and Tenant Protection Act of 2019. The rent reforms eliminated ways for landlords to increase rents, including after a tenant vacates. 

As a result, some owners have been unable to maintain their buildings, opting to warehouse units instead. The Division of Homes and Community Renewal estimated that more than 57,000 rent-stabilized apartments were empty as of April last year, an increase of about 8,000 units from the year prior.

“Systemic issues need to be addressed, but at this moment, the tools this board has are more likely to cause harm to owners, rather than help,” Wynn said at the meeting.

Property owners attempted to protest the hearings in their own ways. Outspoken developer Humberto Lopes organized a theatrical demonstration during one of the meetings, hiring actors to dress as zombies. However, the protest backfired after the participants revealed that they were not told what the performance was for.

On Thursday night, tenants indicated plans to take things a step further. During the preliminary vote, while landlord representatives asked for an increase, tenant representatives proposed a rollback. In its 57-year history, the RGB has never decreased rents.

“Eric Adams raised our rent, give us back our 12%,” tenants chanted, referring to the total amount rents were raised during his four-year tenure.