A vote tonight by the city’s nine-member Rent Guidelines Board could mean a rent freeze for the city’s estimated 840,000 rent-stabilized housing units for the second year in a row.

Lower fuel costs have been cited as a reason a freeze makes sense for landlords, but Marcus & Milichap’s Shaun Riney tells Bisnow there’s more to the picture.

“There are unintended consequences here,” Shaun says.

He cites an increasingly onerous regulatory environment, while property taxes and the risk of legal action from tenants groups are both up.

It adds up to more uncertainty and flat operating incomes for many stabilized buildings, Shaun tells us, which means that increasingly, it’s large institutional buyers that are acquiring stabilized buildings and icing out mom-and-pop buyers that might be in the running if they had the resources to deal with all the regulatory and legal risk.

Taking stabilized units off the market, Shaun says, has become one of the only ways landlords can make it worthwhile to own stabilized buildings.

It appears the freeze hasn’t resulted in a sweeping preservation of stabilized units. A recent study by the Rent Guidelines Board found that about 8,000 stabilized units—almost 1% of the total number—were taken off the market just last year.

“It’s creating an environment where everybody is very, very afraid," Shaun says. "And when people are afraid, they get paralyzed. No one wants to see transactions stop in these emerging neighborhoods.”

The vote applies to one- and two-year leases, and any increase would be for 2% or less for one-year leases and no more than 3.5% for two-year leases.