Rent Guidelines Board Report Fails To Highlight Severe Distress In Most Regulated Buildings
Data shows that the majority of rent-stabilized buildings had declining net operating incomes, and significant drops in building expenses signaling disinvestment
(New York, NY) – The New York City Rent Guidelines Board released its Income & Expense report this morning. The report fails to highlight data showing that the majority of rent-stabilized buildings in the city saw declining Net Operating Income from 2022 to 2023, when adjusted for inflation.
Analysis of the I&E shows that Pre-1974 Buildings outside the Core of Manhattan make up 65% of the surveyed data. For this group, the inflation adjusted NOI declined by 2%.
Pre-1974 Buildings in the Core of Manhattan, which are mostly deregulated, make up 20% of the surveyed data. Inflation adjusted NOI increased by 16.3% for these buildings.
Post-1973 Buildings receiving huge tax breaks make up 15% of the surveyed data. Inflation adjusted NOI declined by 2% for these buildings.
“This report shows a tale of two cities when it comes to regulated housing. The vast majority of rent-stabilized apartments are in the outer borough buildings. The data clearly shows disinvestment in these buildings from 2022 to 2023, which should alarm everyone. Furthermore, the report fails to factor in the massive spike in inflation in 2023 when it calculates NOI for this key group,” said Kenny Burgos, CEO of the New York Apartment Association.
The report’s top line number of NOI increasing by 8%, adjusting for inflation, fails to mention that more than 120,000 apartments from their data set are free market units. In some buildings that are included as part of the rent-stabilized sample, average rents are in excess of $10,000.
“The inclusion of these buildings distorts and confuses the data. It creates a warped perception that rent-stabilized buildings are doing okay, when the reality is that most are in severe financial distress,” said Burgos.
Inflation adjusted NOI for Pre-1974 buildings outside the core of Manhattan shows declines in the Bronx (-7.62%) and Queens (-1.08%), with only mild increases in Brooklyn (+0.22%) and Upper Manhattan (+2.38%).
