2019 Law That Created Housing Instability For NYC's Tenants, Landlords

HSTPA took effect in June 2019 and removed the ability to raise rents in rent-stabilized units when vacancies occur. Landlords responded by leaving units vacant and delaying renovations, especially where regulated rents were extremely low. Additional pressures followed, including COVID-related collection problems and tenant payment deferrals that produced ongoing “economic vacancy” or nonpayment above 15% in some cases. Inflation and higher interest rates starting in 2022 further increased costs. Over five years, rent growth rose about 16% while operating expenses surged about 40%, widening the gap between income and costs. For many stabilized buildings outside core Manhattan, average monthly rent remained close to operating costs, leaving little room for debt service, repairs, and capital upgrades. A proposed four-year rent freeze could push about half of rent-stabilized buildings toward systemic bankruptcy without government offset of operating cost increases.

"HSTPA, which took effect in June of 2019, eliminated the ability to increase rents in rent stabilized units even when a vacancy occurs. Landlords have responded by leaving units vacant and postponing renovations, particularly when the regulated rent is extremely low."

"After HSTPA was approved, landlords were hit with COVID, which affected collections, especially in the Bronx. Tenants were told by advocates that they could defer payments, resulting in "economic vacancy" or nonpayment that continues to be above 15% in some cases today. Lastly, inflation soared and interest rates doubled in 2022 and have stayed elevated since then."

"Data from Ariel Property Advisors' Q1 Multifamily Report shows that over the past five years, a 16% increase in rent growth has been dwarfed by a 40% surge in operating expenses. Data from Ariel Property Advisors' Q1 2026 Multifamily Report shows that over the past five years, a 16% increase in rent growth has been dwarfed by a 40% surge in operating expenses."

"For 100% stabilized buildings outside of core Manhattan, the average monthly rent was $1,287 in 2024, while operating costs sat at $1,022, according to the RGB 2026 Income and Expense Study. That leaves a razor-thin margin to cover mortgage debt service, emergency repairs, and major capital upgrades, a financial gap further exacerbated by the lingering post-pandemic tenant nonpayment rates."

Read at Forbes