New York City landlords are pushing back against Mayor Zohran Mamdani’s rent freeze.
A coalition of seven NYC landlords filed a lawsuit Wednesday against the long-promised freeze for rent-stabilized apartments in the city, passed on a 7—1 vote by the city’s Rent Guidelines Board in late June. The decision blocks rent increases for one- and two-year leases signed between October 1, 2026, and September 30, 2027, affecting about 1 million rent-stabilized apartments citywide.
The lawsuit alleged that the outcome of the RGB vote was the product of a “sham process with a predetermined outcome,” that will place a financial burden on property owners.
Freezing the rent had been one of Mamdani’s key affordability goals since the early days of his campaign. It’s unlikely a single landlord lawsuit will overturn the policy, but the mayor may face an uphill battle in maintaining the freeze for more than a year or two. When NYC and other cities like St. Paul, Minnesota, have tried to cap rents in the past, local governments haven’t been able to sustain the economic support or political will to keep it in place for the long haul.
Mayor’s Office spokesperson Matt Rauschenbach said that the city’s law department is prepared to defend the policy in court, and “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.”
Similar rent freezes have landed cities in court
Other cities have seen situations like this before — as has New York City.
The city of St. Paul won a lawsuit against landlords in 2023, after a challenge to the 3% annual rent cap ordinance was dismissed.
During Mayor Bill de Blasio’s two 4-year terms in New York City, the RGB successfully implemented one-year rent freezes for leases in 2015, 2016, and 2020. The second time, in 2016, the board was unsuccessfully sued.
Rosenberg & Estis attorney Deborah Riegel, co-counsel for the current New York landlord plaintiffs, told Business Insider that the legal argument in the 2016 case hinged on the extent to which the RGB could consider tenant affordability in its decision to grant a freeze. The current lawsuit has a different argument, she said, anchored in both the rising costs landlords face and the alleged misuse of the city’s bureaucratic approval process.
“Whether or not you consider tenant affordability, your data on the cost side is so clear — it is so irrefutable that owners’ costs are increasing,” she said, adding that other city-controlled costs like local property taxes are also rising. “They’re still taking the position that the owners should absorb those increases without any corresponding increase in their income.”
A June Moody’s Ratings report found that a hypothetical five-year rent freeze could put 6% of the NYC multifamily loans in commercial mortgage-backed securities at risk of default.
The city and the landlords are set to meet before a judge in September.
The potential impact of the freeze on the rental market
The landlord’s suit said a rent freeze would make it hard for owners to survive amid rising costs.
Jake Krimmel, a senior economist at Realtor.com, said this debate is not about “tenants versus landlords” but rather about analyzing the effects the policy could have on the rental market. People who live in rent-stabilized apartments will benefit, while spillover effects on the rest of the market are expected, he said.
One of these effects will be increased pressure on market-based rental apartments, as New York City housing supply is low, and people in rent-stabilized units will be less willing to move out, he said. Krimmel added that new construction likely won’t be discouraged by the rent freeze, as it applies only to existing units.
Market pressure will also be affected by how landlords adjust amid stabilized rents and rising operational costs, such as high energy prices, property taxes, insurance, and general inflation. Landlords with both rent-stabilized and market-rate units might raise rents on their market-rate apartments to offset the costs of maintaining their stabilized properties.
Meanwhile, landlords who mostly own rent-stabilized units might have to pull back on maintenance or leave apartments vacant once they reopen to the market because it can be less costly to leave them empty instead of managing tenants. Many of these ripple effects occurred in St. Paul and its surrounding areas, prompting the city to roll back its rent cap.
“Ultimately, there’s a balancing act,” Krimmel said. “The landlord is going to have to balance the income that they get coming in versus the costs of operating their building, and because they feel like they’re being really squeezed on the income, their costs are feeling more acute right now.”
Regardless of legal challenges, these financial impacts on the market make it hard for cities to maintain both the resident support and lawmaker backing for a sustained freeze. As founder and President of New York YIMBY Nikolai Fedak put it, a freeze may sound good in theory, but end up raising prices for millions of tenants.
“It creates two classes of renters,” he said. “Subsidizing the protected group within rent control drives up prices and unaffordability for the rest of the market rate housing.”
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