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NYC’s Rent-Stabilized Housing Is Under Pressure From All Sides
NYC’s Rent Guidelines Board voted 5–4 to raise rents for about 1M rent-stabilized apartments—3% for one-year leases and 4.5% for two-year leases starting October 1.
Jordan B.
July 03, 2025
Good morning. Rent-stabilized housing in NYC is facing mounting pressure—from rent hikes approved by the city, to a major landlord's bankruptcy jeopardizing over 5K units, all while rent policy becomes a flashpoint in the mayoral race.
Editor’s Note: In observance of Independence Day, our team will be off on July 4th. We’ll be back in your inbox on Monday—enjoy the holiday.
Market Snapshot
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Policy Pressure
NYC’s Rent-Stabilized Housing Is Under Pressure From All Sides
A wave of rent hikes, political tension, and financial instability is shaking the foundation of NYC’s affordable housing stock.
Rent hikes approved: NYC’s Rent Guidelines Board voted 5–4 to raise rents for about 1M rent-stabilized apartments—3% for one-year leases and 4.5% for two-year leases starting October 1. It's the fourth straight year of increases, drawing criticism from tenant advocates who warn it will worsen affordability and deepen the rent burden.
Burdened and rising: As of 2023, nearly 46% of non-assisted rent-stabilized tenants were already rent-burdened, per US Census data. Tenant advocates condemned the latest hikes, while landlords argued they fall short of covering rising costs like insurance and utilities.
Housing in limbo: Simultaneously, over 5K rent-stabilized units owned by Pinnacle Group are in limbo after a judge denied access to rental income during bankruptcy. The court stated that the landlord didn’t prove that lender Flagstar Bank’s interests were protected. With $564M in debt and missed mortgage payments, the properties risk service disruptions amid summer heat.
Politics collide with policy: Rent policy has become a central election issue as the RGB vote and landlord bankruptcy stir debate. Mayoral frontrunner Zohran Mamdani vows to freeze rents, challenging both the board and Mayor Eric Adams, who calls freezes “short-sighted.” Real estate groups argue modest hikes are needed to maintain aging buildings amid rising costs.
➥ THE TAKEAWAY
Big picture: NY’s rent-stabilized housing is caught in a political, legal, and financial tug-of-war, with landlords pressed by debt and costs, tenants facing rising rents, and policymakers walking a tightrope between preservation and affordability.
✍️ Editor’s Picks
Predicting the future: Gray Capital’s report shows multifamily investors when and where to find the strongest markets in 2025 and 2026. (sponsored)
Play money: Family offices are turning to sports as a $2T alternative asset, blending passion with long-term returns.
Fire sale: A bitter ownership feud over a $360M California real estate portfolio, including Hotel Laguna, is pushing the assets toward a chaotic liquidation.
Liquidity pressure: Early signs of stress are emerging in CRE as rising tariffs and global uncertainty begin to tighten liquidity and widen investor spreads.
Construction delay: Over 50K apartment units have been delayed since 2018 due to mounting labor shortages, tariffs, rising insurance costs, and supply chain disruptions.
Tax overhaul: Florida Governor DeSantis signed a sweeping $1.6B tax-cut package that eliminates the state’s commercial lease tax and enacts new permanent and seasonal sales-tax breaks.
Proptech expansion: The global property management software market is set to nearly double from $27.95B in 2025 to $54.16B by 2032.
🏘️ MULTIFAMILY
Price plunge: Multifamily real estate just posted its sharpest price drop since 2008, with sale prices down 12.1% YoY and deal volumes slipping.
Housing cuts: Trump’s proposed $26B cut to rental assistance could displace 5,700 Long Island households, slashing Section 8 support to just two years.
Hidden gems: Secondary and Midwest markets are outperforming flashier metros, as low supply and overlooked fundamentals drive stronger-than-expected returns.
Affordable boost: Walker & Dunlop closed a $240M LIHTC fund to build 1,701 affordable housing units across 10 states, marking its largest effort yet to expand low-income housing.
Permit paralysis: Montgomery County developers face mounting delays as red tape, community resistance, and inconsistent municipal processes stall housing projects.
Price fixing: The Senate stripped a controversial provision from the federal budget bill that would have blocked state and local bans on AI rent-setting.
🏭 Industrial
Leasing lag: Class A industrial space in the Northeast now takes 9.3 months to lease, as demand softens and market conditions shift.
Supply strain: US manufacturing shrank for a fourth straight month in June as new orders declined and input costs rose.
Musk megaproject: Elon Musk’s xAI is rapidly building supercomputer data centers in Memphis, drawing economic praise and environmental pushback.
Record deal: Faropoint has closed its largest acquisition ever, buying a 1.8M SF industrial portfolio across five states for $328M.
Digital demand: Blackstone’s QTS secured a $1.5B loan to refinance two fully leased data centers in Atlanta and Richmond.
Durham deal: A $555M sale of six industrial parks in North Carolina’s Triangle region marks one of the area's largest deals ever.
🏬 RETAIL
Experience first: Champs Sports has launched a redesigned store format in Tampa and Portland malls, featuring immersive experiences, digital displays, and fit-tech.
Market maneuver: Circle K’s parent is offloading 35 stores to MAPCO to satisfy antitrust regulators as it closes a $1.6B deal for 270 GetGo locations.
Retail rebound: DFW retail construction is surging, with 2.9M SF set for delivery in 2025, marking the region's highest output since 2017.
🏢 OFFICE
Public footprint: San Francisco's city government signed the largest office lease in Q2, expanding to 225K SF at 1455 Market.
Q2 correction: Manhattan office leasing cooled 19% in Q2 after a record-breaking start to the year, but the market remains healthy with shrinking availability.
Relocation reversal: The Trump administration scrapped the FBI’s planned move to Maryland, opting instead to relocate the agency’s headquarters just blocks away.
Hudson greenlight: NYC approved a financial plan using PILOT funding to help complete Hudson Yards’ second phase.
Federal downsizing: DC has lost 850K SF of federal leases in 2025 so far, as the Trump administration pushes to shrink the government footprint.
🏨 HOSPITALITY
Luxury leap: BridgeInvest is backing a $25M pre-development loan for a luxury three-tower Nashville project featuring an Equinox Hotel.
Steady strength: Peregrine Hospitality CEO says the key to navigating 2025’s market uncertainty lies in operational excellence and long-term thinking.
📈 CHART OF THE DAY
US equity REITs raised $10.92B through June 2025, with senior debt making up over half of the total. Healthcare REITs like Medical Properties Trust and Welltower led fundraising efforts.
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