Landlords warned buildings are running in the red as rent rules tighten
New York City’s new rent freeze on roughly 1 million rent-stabilized apartments has pushed a long-running tension between tenant relief and small-landlord survival squarely onto lenders’ desks.
For multifamily lenders exposed to older, regulated stock, the question is no longer whether margins are thinning but how quickly debt coverage might crack.
In Bensonhurst, Brooklyn, landlord Natalia Bonanno said three century-old rent-stabilized buildings that once supported “a solidly ‘comfortable’ lifestyle” have turned into money pits.
Tenants there pay between $650 and $2,000 a month, but she estimates monthly costs at about $2,000 per unit, citing maintenance, utilities, insurance and real estate taxes that “jumped by almost a third since 2015.”
“We are taking money from our own savings to pretty much keep the buildings going,” Bonanno told The Washington Post.
“Every year around this time, when we pull our figures together for the accountant, she asks why we still own it because it’s not making money.”
A widening cash-flow gap
Other small landlords describe similar math. In Manhattan’s Chinatown, retired transit worker Irving Lee inherited an eight-unit building where rents run from $700 to $1,500, while he puts average operating costs at $1,300 per unit.
“There are forces in this city that make it extremely difficult for property owners to care for and renovate these buildings,” he said.
In the Bronx, owner Valentina Gojcaj puts operating costs at about $1,500 per unit against rents of $700 to $2,000 and warned, “Right now we are barely breaking even, and that is just operating costs. Never mind improvements.”
Those accounts track with broader data showing rising expense pressure across New York’s stabilized stock, including steep increases in insurance, maintenance and utilities in recent years, even before the freeze locked in regulated rents.
Tenants and advocates, however, argue a freeze has been overdue. Bronx paralegal and long-time rent-stabilized tenant Joanne Grell said the policy is “the difference between living with dignity and facing potential homelessness.”
The security of a roughly $1,800 monthly rent, she said, allowed her to raise two children - one now in medical school, the other a filmmaker.
“It allowed me to be a present parent and not to have to work three jobs,” Grell said. “I was able to be here in important moments and to guide them accordingly and make sure that they didn’t fall into bad crowds or bad friends.”
Broader pressures on New York’s housing pipeline
New data from Realtor.com showed nearly 90% of city renters stayed put in 2024 as asking rents climbed, a sign of limited mobility and ultra-tight vacancy in both stabilized and market-rate stock. That immobility has already raised red flags over future purchase pipelines, especially for first-time buyers who typically emerge from the rental pool.
At the same time, a study by NYU’s Furman Center found insurance costs for rent-stabilized buildings soared by roughly 150% since 2019, with maintenance and utilities up more than 30%, deepening concerns that a prolonged freeze could accelerate deferred repairs and code violations in older stock that underpins much of the city’s affordability.
Mayor Mamdani’s planned rent freeze for stabilized units, expected as soon as October 2026, promises short‑term relief for sitting tenants. But analysts warned it could tighten the supply of available apartments even further if residents held on to below‑market leases, pushing more pressure onto market‑rate stock.
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