The masses are starting to catch on to the fact that thousands of rent-stabilized buildings are under water

Older, fully-stabilized buildings with capped revenues are in a death spiral. Plus, we analyze the FARE Act’s impacts with the help of a new report from Open Igloo. 

This is your New York Apartment Association weekly update with CEO Kenny Burgos.

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On The Agenda

1:12: “The rent is too damn high” (and not nearly high enough)

→ Read: Howard Slatkin for Vital City 

3:35: The ‘FARE Act’ effect

→ Read: Open Igloo’s NYC Summer 2025 Rent Report 

5:14: Kenny joins NY1’s Inside City Hall with Errol Louis 

6:09: Bill de Blasio confirms the RGB is an independent body

→ Read the full interview from The New York Editorial Board

7:09: Finding common ground with Jacobin’s Bhaskar Sunkara

→ Watch: Conversations with Coleman: Capitalist vs. Socialist on Rent Controls

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Transcript

 This week on Housing in New York, the masses are starting to catch up to the fact that thousands of rent-stabilized buildings are in deep distress. Plus, we're starting to see the impact of the FARE Act: we take a look at a new report that says rents are up, but overall costs for many renters are down. And I recap my appearance on NY1 discussing property tax reform and rent freezes. 

Let's start housing New York.

[THEME (waterfall)] 

“We need 800,000 units to meet the demand today. What we have right now in the United States and what we have right now in New York City is almost a crisis of absurdity. Hundreds of thousands of renters are at risk, and there is literally no plan. The distress of rent-stabilized buildings is going to be one of the biggest stories for the next 12-18 months.”

[INTRO]

Hi everyone, Kenny Burgos here. It's Monday, September 29th, and the biggest news this week is that Mayor Adams has decided to end his campaign for reelection for Mayor of New York City — confirming what many have expected for a few weeks and months now, given his poll numbers and very low fundraising. 

So that's our big political headline this week, but let's get into some housing news.

[01:12] [“The rent is too damn high (but also too low)”]

Look, I know I sound like a broken record, but rent-stabilized buildings are in trouble, and if we don't fix it, our affordable housing is in danger. Last week, the online publication Vital City did some great reporting breaking all this down. 

Here's the issue: Stabilization caps rents, but it doesn't cap costs. Utilities, repairs, insurance, taxes — they all keep climbing. Between 2020 and 2024, insurance and admin costs shot up more than 50% while spending on repairs went down. That's how disinvestment starts. First small fixes get delayed, and then buildings start to fall apart.

The data available to the government doesn't show the distress because it lags behind and because it mixes apples and oranges. If you put brand new buildings paying no taxes in the same data as older buildings with rents that are half as much and are overtaxed, then you get a messy and misleading picture.

An older, fully stabilized building with its revenue capped is in a death spiral. Operating income is not keeping up with expenses and these buildings have declining net operating income (NOI) — and if they don't, it is because they aren't spending as much on maintenance. 

Mostly, free market buildings in the core of Manhattan are able to increase their rent due to the shortage of housing and high demand to live in the city. The Rent Guidelines Board counts these buildings with huge net operating incomes, and we get a manipulated picture of what's really happening.

In his article for Vital City, Howard Slatkin outlines this in great detail. We encourage everyone to read it. 

So what's the fix? 

The government has to lower costs. Unfunded mandates from the City Council are driving up expenses. They passed another one just last week that will require property owners to spend hundreds of dollars more every time they hook up a gas appliance. Elected officials have also done nothing about insurance costs rising due to fraud from organized crime rings. That would make a big dent. And the government has to provide more subsidies and vouchers to tenants who need them. We've been talking about expanding SCRIE and DRIE benefits. This is an idea Slatkin also suggests. He also likes the idea of changing the rent laws to allow for rents on vacant apartments to rise enough to cover renovation costs — also something we've been pushing. 

We're quickly reaching a point of no return. If we don't act, New York risks falling back into that same old cycle of underfunded, deteriorating, affordable housing. 

[03:35] [The FARE Act effect]

This summer marked a big turning point for New York City renters. On June 11th, the FARE Act went into effect, banning forced broker fees. Overnight, the economics of apartment hunting did a full 180.

So what actually happened? 

Open Igloo analyzed over 5,200 renter surveys, plus tens of thousands of listings between June and August of 2025. 

The headline? Rents did go up, but renters are still coming out ahead. 

Here's the breakdown: Average rents rose about 6% this summer, and that sounds steep, but remember, broker fees used to run 8-to-15% upfront. 

So even with rent climbing, tenants are saving money compared to the old system. 

Now, to be fair, rent growth isn't just about the FARE Act. Other policies like Good Cause, Eviction and broader market dynamics played a role too. 

Renewal rates tell another part of the story: They fell from 69% last summer to 59% this year. That's a big drop, and it suggests renters felt free to move without that huge broker fee hanging over them. 

The sharpest declines were at the higher end of the market. For apartments under $3,100 a month, renewals barely budged. Right after the FARE Act passed, listings plunged almost 75% overnight. But by mid-July, supply bounced back and actually doubled pre-FARE Act levels.

Not only that, apartments started moving faster. Median time on the market dropped from 39 days to 23 days. 

In short, the FARE Act shifted the balance. Yes, rents are higher, but the savings on upfront fees outweigh that. Renters gained mobility. Landlords saw faster turnover, and the market overall became more dynamic.

[05:14] [Inside City Hall with Errol Louis]

Two weeks ago, I joined Errol Lewis on NY1’s Inside City Hall to lay out a truth many are reluctant to face. Rent-stabilized housing in New York is in a financial crisis. Across the city, owners are staring down 2025 level costs with 1970s level rents, and as many as 200,000 units are now functionally bankrupt.

I stress two things. First, property taxes are the single biggest expense, and if affordability is truly the goal, we can't ignore that any longer. Second, rent freezes: They sound good on paper, but freezing rent doesn't erase costs. It just shifts them, usually onto the 60% of New Yorkers in market rate housing.

What we need are real solutions – property tax reform, targeted relief, smarter regulation – and policies that keep these buildings viable, instead of pushing them closer to collapse. I encourage you to check out the full interview. 

[06:09] [Bill de Blasio confirms RGB is an independent body]

Turning to some politics now. 

A top issue in a campaign for New York City Mayor has been a rent freeze proposal. That has led former Mayor Bill de Blasio to chime in on various social media channels, mostly to boost his own ego and claim that he pushed through rent freezes as mayor. 

We have said this many times: The mayor cannot tell the Rent Guidelines Board what to do. We believe that is a violation of state law. 

We have criticized the former mayor for making claims that he deserves all the credit. So you can imagine our surprise when de Blasio spoke to a bunch of veteran journalists and said the RGB members, quote, “have the power to make their own decisions.” He went on to suggest the mayor's appointments to the board can prioritize tenants, which is a vastly different thing than promising they will reach a predetermined answer.

De Blasio went on to surprise further! He said the 2019 Rent Laws quote “need to be changed,” end quote. And he said that fixing the 2019 Rent Laws would be a good balance for a rent freeze. 

At least we agree with Mayor de Blasio that the 2019 Rent Laws need to be fixed. 

[07:09] [Finding common ground with Jacobin’s Bhaskar Sunkara]

Sticking with this theme, we wanted to highlight a debate that was hosted by Coleman Hughes from The Free Press about rent stabilization in New York City.

He spoke with the self-proclaimed socialist Bhaskar Sunkara. What was interesting is that Sunkara made this claim about rent stabilization… 

Let's play the clip. 

[Bhaskar Sunkara]

“What I would say is my main concern with certain forms of rent control is if the amount being paid is too low to, um, actually maintain properties. … So I'd be on the lookout for that.” [Watch]

[Kenny]

We agree with Bhaskar. That's a big problem and it's already happening here. In New York, at least 200,000 apartments do not have rents that cover costs. And when you factor in unfunded mandates and debt service payments, it is closer to half of all rent-stabilized buildings.

So we encourage all elected officials to listen to this socialist, who is – maybe unintentionally – saying New York's rent stabilization system is broken. 

[Bhaskar Sunkara]

“I would also be lookout on the lookout for rent controls where it's designed in such a way that it makes it less profitable to build housing.”

[Kenny]

This was a good conversation that we encourage everyone to listen to, and I was definitely encouraged that both Hughes and Sunkara spoke about the need for more supply.

We should build on these agreements.

[OUTRO]

That's a wrap for today's episode. A quick reminder, the New York City mayoral debates are coming up on October 16th and 22nd, and we'll be keeping a close eye on whether housing gets the spotlight as those dates approach. We'll also share some of the questions we think should be on the table. 

I'll be back in two weeks. In the meantime, follow us on Instagram, TikTok, and X @housingny to stay up to date. 

And remember, good housing policy starts with good conversation.