NEW YORK — A city board voted Thursday to freeze rents for up to two years for about 1 million rent-stabilized apartments, delivering on a key piece of Mayor Zohran Mamdani’s agenda while rattling the real estate industry.
After months of hearings that included public and expert testimony, the Rent Guidelines Board handed down its decision amid cheers from audience members, who chanted “fight together, win together.” The vote passed 7 to 1 in favor of the freeze, which applies to one- and two-year leases.
The decision caps rent on about 40 percent of the New York’s housing stock — generally apartment buildings that were constructed before 1974. Landlords and real estate representatives panned the decision, saying it could devastate already meager profits and drive some apartment buildings into bankruptcy.
Mamdani called the vote “a historic victory for New York City tenants.”
“I’ll continue working to deliver a more affordable city by building and preserving affordable housing, lowering building operating costs like insurance, and ensuring tenants know their rights,” he said in a statement after the vote.
Mamdani made freezing the rent a key pillar of his mayoral campaign last year, arguing that cost of housing was stifling New Yorkers’ ability to pay their bills.
Before the vote in an East Harlem auditorium, hundreds of people gathered and chanted slogans in English and Spanish in support of the rent freeze. The boisterous chants included: “Fight Fight. Housing is a human right.”
Renette Bradley, 65, who rents a $2,300 per month one-bedroom apartment in Brooklyn, said if landlords keep raising tenants’ rent, they could be forced to leave the city.
“They are pushing us out,” Bradley said. “We were promised a rent freeze and fought for a rent freeze, and now we are getting what we were promised.”
During the vote, audience members shouted over board members.
The power to accomplish Mamdani’s goal rested with the independent board, but New York mayors appoint its members. Mamdani was able to appoint six of nine board members during his first several months in office.
The decision also represents a major victory for both Mamdani and the democratic socialist movement, which also swept several high-profile congressional and state legislative races in New York City on Tuesday.
Last week in Washington, D.C., Janeese Lewis George, another democratic socialist, won the Democratic primary to become that city’s mayor. Lewis George also anchored her campaign around affordability issues, including the cost of housing.
Sumathy Kumar, director of New York State Tenant Bloc, an advocacy organization, said the board’s decision will be “life changing” for an estimated 2.4 million city residents who live in rent-stabilized apartments. Those tenants have faced rent increases of about 3 percent each year since 2022.
“It is going to mean they are going to have basic stability, can buy groceries without worrying, can care for children, buy medicine,” said Kumar, a former co-chair of New York City Democratic Socialists of America, adding: “this is one less cost that New Yorkers have to worry about.”
But the board’s vote followed a day of drama in which one of its members resigned, telling others on the board they were “ignoring” evidence of landlords struggling to keep pace with inflation.
“Please understand me when I tell you that a freeze does not help the people it claims to protect,” Christina Smyth, who had been appointed by former mayor Eric Adams (D), said in her resignation letter. “It widens the gap between what a building costs to operate and what it is allowed to collect. … When these buildings fail, it is not the people who cast these votes who pay the price.”
Kenny Burgos, the head of the New York Apartment Association, said tenants of rent-stabilized units will suffer because apartment building owners will no longer be able to afford to properly maintain their properties. Many building owners are facing crushing costs, including high utility bills, insurance premiums and property tax bills, he said.
“When you tack on a zero percent increase, with no knowledge of what costs will be over the next one or two years, you absolutely will have more buildings fall into financial distress and subsequently foreclosures and bankruptcies,” Burgos said.
The issue of maintenance is so dire that the New York Apartment Association estimates the city has 50,000 rent-stabilized “ghost apartments” that landlords decide to leave vacant because they don’t believe they can recoup their costs if they rent them out.
About 100,000 rent-stabilized apartments are already in financial distress, according to Rent Guidelines Board data.
Kumar, with the New York State Tenant Bloc, said the city has programs to help struggling landlords recover their losses and even pay for upkeep of rent-stabilized apartments. But Kumar said some landlords “might face consequences” for holding too much debt.
“There are too many landlords that have been engaged in extremely risky business practices, have taken out extremely over leveraged mortgages,” Kumar said.
Before the board’s vote Thursday evening, the New York Apartment Association highlighted the plight of one building owner in East New York.
The woman, who inherited the seven-unit building from her parents, said she charges tenants between $1,191 and $1,412 per month for their apartments.
The woman, who asked not to be identified so she could speak frankly about her finances, said those monthly rents equal about $104,000 annually. But the woman says her costs, including a $14,000 water bill, now total about $105,000 annually.
“If they do this rent freeze, my building my go into foreclosure and this is sad,” the woman said, her voice quivering with emotion. “I am trying to keep my parents’ legacy alive and I feel I may fail due to a rent freeze. ”
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