{"id":303690,"date":"2026-07-23T13:14:31","date_gmt":"2026-07-23T13:14:31","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/303690\/"},"modified":"2026-07-23T13:14:31","modified_gmt":"2026-07-23T13:14:31","slug":"nyc-landlords-sue-rent-guidelines-board-over-rent-freeze-commercial-observer","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/303690\/","title":{"rendered":"NYC Landlords Sue Rent Guidelines Board Over Rent Freeze \u2013 Commercial Observer"},"content":{"rendered":"

Following the city\u2019s rent freeze decision<\/a> in June, it was very much expected that angry New York City landlords \u2014 now burdened with even more maintenance costs and increased upkeep on rent-stabilized apartments \u2014 would take legal action to overturn the vote. And now it\u2019s a reality.<\/p>\n

A group of five small landlords who own rent-stabilized apartments in the city filed a lawsuit<\/a> Wednesday in a New York state court against the city\u2019s Rent Guidelines Board (RGB) over its 7-1 vote last month to freeze rents for both one- and two-year leases on rent-stabilized apartments in the city.<\/p>\n

SEE ALSO: Mamdani Appoints Lina Khan as Board Chair of EDC<\/a><\/p>\n

The landlords \u2014 using the LLC Kenilworth Holdings<\/a> \u2014 claim in the suit that the RGB went through a \u201csham process\u201d before the vote, and that Mayor Zohran Mamdani influenced the outcome of the decision. The suit also claims that the mayor appointed RGB members \u201cpredisposed to delivering a freeze,\u201d and that the RGB \u201cignored evidence of soaring landlord costs and manipulated the data to understate the impact of these costs.\u201d<\/p>\n

Additionally, the landlords wrote in the suit that the RGB disregarded petitioners who showed that \u201cthey and similarly situated landlords cannot survive a rent freeze.\u201d<\/p>\n

\u201cThe RGB failed to meet its legal mandate of setting rent adjustments based on its own data and research, which strongly justified a rent increase,\u201d said Ann Korchak, board president of Small Property Owners of New York<\/a> (SPONY), whose members are plaintiffs in the lawsuit. \u201cThe rent freeze was illegal. The process was illegal and stacked against small owners of rent-stabilized properties. We are hopeful the court will address this injustice.\u201d<\/p>\n

It\u2019s the first time the city\u2019s real estate industry has challenged the legal basis for the rent freeze, and the first time it has legally challenged Mamdani since the mayor took office.<\/p>\n

\u201cZohran Mamdani promised to deliver a rent freeze during his campaign, and then he went to extraordinary lengths as a new mayor to guarantee it,\u201d Randy Mastro, a lawyer for the landlord group, told the Wall Street Journal, which first reported<\/a> the news. \u201cThis is a perversion of the process.\u201d<\/p>\n

Deborah Riegel, a Rosenberg & Estis<\/a> attorney who is co-counsel on the lawsuit, also told Commercial Observer: \u201cThis stands out pretty starkly as a politically engineered, deliberate decision to have owners bear the costs of what the mayor promised in his campaign.\u201d<\/p>\n

Many critics of the vote claim the mayor and the RGB \u2014 which is an independent, mandate-driven body that determines annual rent adjustments in the city \u2014 worked in tandem to decide on the rent freeze. However, a spokesperson for the mayor\u2019s office insisted the RGB acted independently from Mamdani in its vote and \u201cevaluated all of the relevant data and considered the factors facing both tenants and landlords\u201d across the city.<\/p>\n

\u201cThe Law Department is prepared to defend the RGB\u2019s decisions. The Mamdani administration remains committed to the success of the rent-stabilization system which has prevented displacement and provided stability to generations of New Yorkers,\u201d Matt Rauschenbach, a spokesperson for the mayor, said in a statement to CO.<\/p>\n

A spokesperson for the RGB directed CO to the mayor\u2019s office for a comment.<\/p>\n

The lawsuit filed Wednesday also cites the resignation of Christina Smyth, a landlord representative and a member of the RGB since 2022. Smyth left her seat on the board just hours before the RGB\u2019s rent freeze vote on June 25, and issued a resignation letter accusing the board of ignoring the law and voting to appease Mamdani\u2019s agenda.<\/p>\n

\u201cThis year\u2019s [Rent Guidelines Board] order was decided last year on the campaign trail,\u201d Smyth wrote in her letter at the time. \u201cEverything since has been theater. The hearings, the reports, the public comment, the data. None of it was ever going to change the result.\u201d<\/p>\n

While the RGB\u2019s vote was a win for Mamdani, who spent his mayoral campaign promising a rent freeze and more affordable housing, it was a sure sign that legal action would follow, as the decision sent the city\u2019s landlords into uncharted territory<\/a>. The vote impacted roughly 1 million apartments across five boroughs, or 40 percent of the city\u2019s rental housing stock.\u00a0<\/p>\n

And the landlord group that filed the lawsuit isn\u2019t alone, as the vote led pretty much the entire industry to conclude that the rent freeze was a foregone conclusion.<\/p>\n

\u201cThis is a decision that was predetermined based on the mayor\u2019s wishes, as he built the board to deliver what his wishes were,\u201d Kenny Burgos, CEO of the New York Apartment Association<\/a> (NYAA), told CO in June.<\/p>\n

Also, while the NYAA isn\u2019t a party to this litigation, Burgos told CO Wednesday that he does believe it \u201craises questions that have been spoken about for months,\u201d specifically whether \u201cthis year\u2019s process weighed the board\u2019s own evidence, and whether a body required by law to be independent and fact-driven functioned that way.\u201d<\/p>\n

He added that the data also hasn\u2019t changed since June 25, when the vote occurred. Rent-stabilized buildings in the five boroughs are still losing money.<\/p>\n

\u201cWhatever happens in court, the underlying problem remains: Thousands of stabilized buildings cannot cover their costs, and the housing New Yorkers depend on is deteriorating as a result,\u201d Burgos said. \u201cThe administration has itself acknowledged that some buildings need bigger interventions. We agree, and we remain ready to work with City Hall on real solutions, like capital and lending programs for distressed buildings, expense relief, and a rent-setting process everyone can trust.\u201d<\/p>\n

In terms of likely outcomes for the lawsuit, Riegel said she thinks the landlord group has a \u201cpretty compelling case.\u201d But that\u2019s not to say the RGB and Mamdani won\u2019t fight it.<\/p>\n

\u201cMy expectation is that they will fight this tooth and nail,\u201d Riegel said. \u201cIt was a centerpiece of [Mamdani\u2019s] campaign. He worked very hard to compose a board that would affect his campaign promise without regard to their statutory obligations to actually review the data, and there\u2019s so many flaws in what they did legally.<\/p>\n

\u201cWe\u2019re at a really critical economic inflection point for owners of these properties. The data, if you looked at it honestly, is very clear that costs are way outstripping income,\u201d Riegel added. \u201cAt the same time, the city is increasing property taxes and increasing water charges. None of that is being relieved. Insurance costs have skyrocketed. \u2026 I think it\u2019s going to be very hard to ignore the very, very clear errors they made here.\u201d<\/p>\n

Isabelle Durso can be reached at idurso@commercialobserver.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Following the city\u2019s rent freeze decision in June, it was very much expected that angry New York City…\n","protected":false},"author":2,"featured_media":303691,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[3624,58541,115138,2907,7830,9,43753,56,63,65,64,115137,5326,82],"class_list":["post-303690","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york-city","tag-channel","tag-christina-smyth","tag-deborah-riegel","tag-housing","tag-kenny-burgos","tag-new-york","tag-new-york-city-rent-guidelines-board","tag-ny","tag-nyc","tag-nyc-headlines","tag-nyc-news","tag-policy-ann-korchak","tag-randy-mastro","tag-zohran-mamdani"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/303690","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=303690"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/303690\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/303691"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=303690"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=303690"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=303690"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}