New York Rent Increases Again: New Rates for Stabilized Apartments

The New York Rent Guidelines Board has approved another rent increase for stabilized leases. Starting October 1, 2025, rents will rise by 3% for one-year contracts and 4.5% for two-year contracts. The decision affects about one million apartments — nearly half of the city’s private rental stock, Bloomberg reports.

This marks the fourth consecutive annual increase, all during Mayor Eric Adams’ administration. Board members appointed by the mayor have favored moderate hikes, aiming to balance tenant demands for a freeze against landlord complaints over rising costs.

The vote came at a politically sensitive moment: just days before, left-wing candidate Zohran Mamdani was leading in the Democratic primary. His platform includes a full moratorium on increases for stabilized housing — around 2.5 million apartments. Mamdani called the decision “the last blow” to tenants from the current administration, adding: “New Yorkers desperately need policies that reduce costs, not raise them. Change is coming.”

Economists warn that without flexible compensation mechanisms, landlords may lose their last sources of income, further degrading the housing stock — a key component of affordable housing in New York. Running as an independent, Mayor Adams pushed for more modest adjustments. In an official statement, he expressed disappointment with the outcome, stressing: “A freeze may sound dramatic, but it’s a short-sighted measure that will only worsen the situation for those it’s meant to protect.”

According to Census Bureau data, even before this increase, nearly 46% of tenants in stabilized apartments without subsidies spent more than 30% of their income on rent. Tenant advocates argue current rates are already excessive. The Legal Aid Society stated: “We strongly condemn this decision — it will hurt more than two million working New Yorkers.”

Landlords, however, see the hike as insufficient. They say the new rates still fail to cover basic costs like insurance, energy, and building maintenance. One major rental operator, Pinnacle Group, is already in bankruptcy proceedings. The company, linked to Joel Wiener, lost control over rental income from more than 5,000 apartments in Manhattan, Queens, Brooklyn, and the Bronx, most under rent stabilization. A federal court ruling in the Broadway Realty I Co. LLC insolvency case assigned income rights to creditor Flagstar Bank, with total debt exceeding $564 million.

Flagstar claims payments stopped in January and that property managers failed to protect its interests. Managers counter that without access to cash flow they cannot pay utilities, maintain elevators, or pay staff. Court filings show evidence of technical problems and service delays.

The conflict is worsened by mutual mistrust: the bank fears further losses, while managers blame macroeconomic and regulatory shifts. Key factors include rising interest rates and stricter rent control laws, which now prohibit increases after major repairs or tenant turnover, sharply reducing profitability. Coupled with more expensive credit, this has made debt servicing difficult even for large operators.

Pinnacle’s case is not unique. Bloomberg Law notes that in 2024, New York federal courts saw more bankruptcies involving stabilized housing. By spring 2025, industry representatives warned of a scenario reminiscent of the 1970s crisis, when owners abandoned unprofitable properties, especially in the Bronx. Today, some buildings are already loss-making, with fewer resources left for upkeep.

While stabilized apartments remain cheaper than market rentals — the 2023 median was $1,500 vs. $2,000 on the open market — this affordability often comes at the cost of aging infrastructure and rising landlord debt.

The latest increase may help some owners. Kenny Burgos, head of the New York Apartment Association, thanked the Board for “resisting political slogans,” though he noted the adjustment was still below inflation. James Whelan, president of the Real Estate Board of New York, called the decision a compromise: “It’s a step, albeit a modest one, toward preserving the resilience of our housing stock.”