Rent Board Says Rent-Stabilized Incomes Rose 6% As Landlords Blast Formula

As rent-stabilized distress continues to accelerate, New York City’s Rent Guidelines Board found in its annual report that the incomes generated by buildings housing regulated units have nearly returned to their 2014 peaks. 

In its first data drop of the year, the RGB found that between 2023 and 2024, net operating income for buildings containing rent-stabilized units rose 6.2%. When adjusting for inflation, NOI increased by 2.2%. 

Debt service is not included in NOI calculations, a key sticking point in the debate about how well the data represents landlords' financial situation.

Though operating costs rose an average of 4.2% in that time, total income grew 4.9%, according to the RGB report. The nine-member board will vote on whether to allow landlords with rent-regulated properties to increase rents — and if so, by how much — later this year.

Tenant advocacy groups are already citing the report in calls to freeze rent, one of Mayor Zohran Mamdani’s key campaign promises. He appointed six new members to the board earlier this year, giving his administration a two-thirds majority within the group.

“Landlord incomes continue to rise while tenant wages stay stagnant and the cost of everything from food to transportation keeps going up,” New York State Tenant Bloc Director Sumathy Kumar said in a statement. “A rent freeze is the common sense first step to making sure that the New Yorkers who keep this city running aren’t priced out of our homes.”

The top-line figures fly in the face of landlord claims that they have struggled to keep up with maintenance costs following passage of the Housing Stability and Tenant Protection Act of 2019. 

The New York Apartment Association, among other landlord groups, has highlighted that the numbers in the report are misleading.

The report, which is already reliant on lagging numbers, includes all buildings with rent-regulated units, regardless of how many free-market units are available to offset costs. 

Luxury apartment developers can opt to stabilize certain units in exchange for tax benefits. That means buildings where the majority of units command record rents are also included in the survey.  

The profitable buildings distort the data as a result, according to NYAA CEO Kenny Burgos.

“If you take one millionaire and average it with minimum wage earners, you will not get a realistic average of wages, and you can’t do that with these buildings either,” Burgos said in a statement. 

Properties built before 1974 are more likely to be fully rent-stabilized. Units in pre-1974 buildings earned an average of $512 per month. To compare, the average for those constructed after was $1,454.

Pre-1974 buildings make up 91% of the survey, according to NYAA.

The RGB report found that NOI increased the most in Staten Island, at 15%, followed by core Manhattan, where it rose 10%. Notably, both areas have the lowest percentage of fully rent-stabilized buildings. 

In the Bronx, which has the highest concentration of permanently rent-stabilized housing, NOI ticked down by 0.1%. It’s the only borough where the RGB cites a decrease. 

When accounting for inflation, NYAA places the decline at 1.4%. From 2021 to 2024, pre-1974 buildings in the Bronx have seen NOI drop by 30% when adjusted for inflation, according to the landlord group.

Four neighborhoods, all in the Bronx, experienced the greatest income declines, according to the RGB. Hunts Point dropped 13%, Mott Haven was down 2.6%, University Heights declined 1.4% and Highbridge decreased 1.3%.

Approximately 1,600 buildings, equal to 9.2% of those containing rent-stabilized units, reported operating costs exceeding gross income.

Many landlords hold mortgages that now exceed their buildings’ value since HSTPA and steep interest rate increases that started in 2022. Lenders have evacuated the space as a result, making it difficult for property owners to refinance their debt. 

The largest expense included in the report are taxes, which average at $328 per month for pre-1974 buildings. For newer buildings, the monthly expense is lower on average at $266.

Maintenance costs follow at an average of $209 per month for all buildings. 

But Small Property Owners of New York Board President Ann Korchak said the data doesn't include major capital expenses, such as new roofs and boilers, electrical and plumbing upgrades, and façade repairs. Such improvements are “constant” in older rent-stabilized buildings, she said in a statement.

“This data is an average, so just imagine the thousands of small properties that are operating in the red,” Korchak said. “We need a more accurate and transparent analysis that uses more timely information and reflects the economic distress of small property owners.”

In a statement, Real Estate Board of New York President James Whelan similarly said RGB’s “approach obscures data.” Among the most prominent ways distress manifests is through housing violations. 

Of the buildings that are between 75% and 99% stabilized, 35% have Class C violations, conditions that are considered immediately hazardous by the city, according to a REBNY report. For those that are not subject to any stabilization, just 1% have such violations. 

“If the Board adheres to its statutory mandate, it will take this reality into account in its final determination,” Whelan said.

The RGB will continue to hold meetings throughout the coming months, during which more data will be released. Outside experts will also testify in front of the board. 

A preliminary vote is scheduled for May 7. The date for a final vote has not yet been set.