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When faced with Zohran Mamdani\u2019s campaign to freeze the rent on 1 million rent-stabilized apartments, the owners of said apartments countered with a theory that was a little like the Law of Conservation of Mass: Rents are neither created nor destroyed, only rearranged. Their argument was simple\u00a0\u2014 costs are rising for landlords, and if they can\u2019t raise the rents on their stabilized units, then they\u2019ll have to raise them on the market-rate ones. The idea was to divide renters on the proposal: Your neighbor might have their rent frozen, but as a market-rate tenant, you\u2019re the one who will pay for it. \u201cFreezing the rents for some means raising the rents for others,\u201d Kenny Burgos, the head of the New York Apartment Association, an organization of rent-stabilized landlords, said over<\/a> the summer.<\/p>\n Now, all these months later, Mayor Mamdani seems to have the majority he needs<\/a> on the Rent Guidelines Board. So what happens next, if close to a million households start paying four years of flat rents? Does the status quo hold, or will it be something closer to \u201cA Tale of Two Apartments\u201d?<\/p>\n The first part of the landlords\u2019 argument is clear \u2014\u00a0it\u2019s getting more and more expensive to operate a rent-stabilized building. Over the past five years, overall operating costs increased<\/a> by 28 percent, with the costs of insurance and fuel going up 19 percent and 10 percent, respectively, between 2024 and 2025. Housing analyst Jonathan Miller, who is skeptical<\/a> of the proposal, says that landlords will likely try to raise market-rate rents to help cover at least some of that rise in costs. \u201cI\u2019m not saying that open-market rents skyrocket, but it does place upward pressure on them,\u201d he explains.<\/p>\n And while freezes under Bill de Blasio in 2015 and 2016 didn\u2019t result in market-price spikes, per Miller\u2019s own data, he cautions against extrapolating too much from that period. (The final rent freeze under the de Blasio administration, in 2020, was mid-pandemic and so not a great point of comparison for much of anything.) Mortgage rates were lower in those years \u2014 meaning people at the top of the rental market were mostly free to jump into the buyers\u2019 market when ready. That\u2019s not the case right now, as high rates mean that people who would normally buy are waiting it out in the rental market, driving up competition.<\/p>\n The industry line so far has been a rent freeze will force a 9 percent to 10 percent increase<\/a> in market-rate apartments over the next four years. But other housing experts I talked to believe this is a bluff \u2014\u00a0landlords are already charging about as much as they suspect the market can bear. \u201cNo landlord is out of the goodness of their heart keeping rents lower,\u201d says Oksana Miranova, a housing-policy analyst at Community Service Society. \u201cThe economic reality is that if you\u2019re running a building, you\u2019re going to maximize the profit \u2014 that\u2019s the way the business works.\u201d In other words, rent freeze or not, landlords are already in the habit of charging as much as they can on their unregulated units. So while the balance-sheet justifications might shift, the general logic won\u2019t. J.W. Mason, economics professor at John Jay College, agrees: \u201cIf you have a market-rate apartment building, you want to rent out those units for the highest rate that you can.\u201d<\/p>\n There\u2019s also reason to take a skeptical eye to some of the poverty pleas of landlords whose portfolios include stabilized buildings. Costs are up \u2014\u00a0but so is net operating income (NOI), a landlord\u2019s earnings after operating and maintenance costs. Annual reports from the Rent Guidelines Board show that between 1990 and 2023, the NOI in rent-stabilized buildings increased 48 percent after adjusting for inflation. Between 2022 and 2023, the most recent span studied, NOI increased 12 percent. And while it\u2019s true that the more rent-stabilized units a building contains, the lower the NOI gets, they\u2019re still netting a positive \u2014\u00a0even 100 percent stabilized buildings saw an average 4.6 percent increase. There are older buildings, especially in the Bronx, that are losing money<\/a>, and distressed buildings are an ongoing problem. (The solution there depends on who you ask: Landlords say it will only get worse with a rent freeze. Mamdani\u2019s head of tenant protection has argued<\/a> that the problem long predates any talk of the freeze: \u201cThe history of decontrol shows that allowing landlords to raise rents in New York has rarely improved conditions at the bottom of the market.\u201d) But in general, it\u2019s not that landlords haven\u2019t profited off their rent-stabilized buildings over the years, it\u2019s just that they\u2019re not currently profiting as much as they\u2019d like. (Or as much as they might need to in order to satisfy their own debt obligations accrued in the cowboy expansion and speculation years prior to 2019<\/a>.)<\/p>\n Joel Stillman, executive director of JustFix, a nonprofit that builds data and research tools for tenants, points out that this means the owners who have the greatest ability to raise rents \u2014 those with a high portion of market-rate apartments \u2014 already make the biggest profits. \u201cIf landlords with more market-rate units do raise rents in response to a rent freeze, the majority of those would be in buildings that have increasingly healthy NOIs,\u201d Stillman wrote in an email. In other words, these would be owners \u201cwho have the least justification for raising rents.\u201d<\/p>\n There are also some limits in place for landlords who want to jack up their prices: The Good Cause eviction law, which passed in 2024, caps rent increases for market-rate apartments at 10 percent or 5 percent plus the consumer price index. There are a number of caveats: The law only applies to owners with more than ten units (a surprisingly difficult thing to calculate given the maze of LLCs many operate under) and a 30-year exemption to buildings built after 2009. And a tenant would have to take their landlord to court if they think they\u2019ve violated Good Cause, which means enforcement is more on an individual case-by-case basis.<\/p>\n The experts I talked to did seem to be aligned on one thing: If and how much rents rise is largely going to be a matter of supply and demand in a tight market \u2014 not a rent freeze. (If you\u2019ve lived in New York, you know rents tend to go up year over year.) \u201cThe rent you charge is going to be based on the demand for those units: How much are people willing to pay for them?\u201d Mason, the economist, says. Miller more or less agrees \u2014 supply and demand still prevails, but, he adds, if a large enough number of landlords decided to reevaluate their market-rate rents in response to a freeze, they might be able to tweak prices. \u201cI\u2019m not suggesting that landlords have a meeting and they say, \u2018Hey, we\u2019re going to change our rents.\u2019 It\u2019s more that it\u2019s a market force,\u201d Miller says. He notes, however, that the change would likely be nominal. \u201cIf everybody is under the same pressure, then it has the potential to go above current market levels. I\u2019m not saying it\u2019ll be a giant surge, just that it doesn\u2019t make them more affordable.\u201d<\/p>\n As for the Mamdani administration, it claims the rent freeze isn\u2019t intended as a silver bullet. The new mayor is also looking to reform the city\u2019s property-tax system<\/a>, a Gordian knot that no mayor has been able to successfully untangle, which would help reduce landlords\u2019 costs. Mamdani says his administration will build 200,000 new units over the next decade to help tackle the supply issue, also an extremely difficult task. \u201cWe are using every tool at our disposal, including building more housing, financial support for existing buildings in need, and protecting rent-stabilized tenants,\u201d Leila Bozorg, deputy mayor for housing and planning, said in a statement when I reached out. She also called landlord claims around rent spikes \u201cfearmongering.\u201d (There are existing forms of relief that landlords could take advantage of, like the Eric Adams\u2013era Unlocking Doors program, which offers owners $50,000 to renovate vacant, low-rent apartments as long as they then lease them to voucher holders. But the program, historically, has had few takers<\/a>.)<\/p>\n So maybe the better question to ask is about what narrative will prevail when rents, inevitably, go up. After all, we\u2019ve seen this kind of scramble before. After the city banned forced brokers fees, the real-estate industry claimed that tenants would be the ones to pay and that rents would skyrocket to make up the difference. Rents, as usual, did indeed rise, and the Real Estate Board of New York blamed<\/a> the FARE Act. But a StreetEasy analysis<\/a> estimated that six months after its implementation, the FARE Act accounted for about one percent of any given rent increase. The rest was, well, just what the landlords wanted to do \u2014\u00a0and what the market would allow. Same as it ever was.<\/p>\n Sign Up for the Curbed Newsletter<\/p>\n A daily mix of stories about cities, city life, and our always evolving neighborhoods and skylines.<\/p>\n Vox Media, LLC Terms and Privacy Notice<\/p>\n