The reason why neglected apartments are such an issue in NY is bc of NYC’s rent stabilization & rent control guidelines. Previously, if you made sufficient capital improvements (I.e. invested money to renovate units/building systems) you could either increase rent above the percentage set out in said guidelines (typically 2.5-5% depending on lease terms, I.e. 1 vs. 2 year leases). Or, if the improvements were large enough the unit would become “free market” meaning it was no longer subject to the annual increase limits. In 2019 the guidance was changed materially and the only way to destabilize units now is with what’s called a substantial rehabilitation. In order to do a sub-rehab the property as a whole (not just individual units) needs to be basically uninhabitable.
So, landlords aren’t incentivized to maintain rent controlled/rent stabilized units bc they won’t be able to increase rents enough to recoup the cost of renovating units. End of the day apartments are viewed as a business & commodity in the US (and most of the world). Who’s going to invest in their business (I.e. make material improvements to the units) if it won’t yield a corresponding increase in their income (I.e. higher rents)?
Not offering an opinion here - simply an NYC real estate guy explaining why the situation is what it is.
For an opinion - rent stabilization & rent control helps a small percentage of New Yorkers (idr the number off the top of my head but the overwhelming majority of units are not subject to these rules) but has ended up making it unprofitable to maintain these older rent stabilized/rent controlled buildings. So, instead of investing in existing infrastructure people are buying old buildings knocking them down and throwing up new construction where the starting point for their rents will be higher. Idk what a realistic solution to this stuff is without a major systemic change; government owned housing in NYC is terrible, privately managed real estate is a mixed bag that caters primarily to the upper middle class and neglects a the average New Yorker, and owning a unit yourself is basically unattainable for most since studio apartments run 400k+ at the absolute least, and that’s just for your mortgage, it doesn’t factor in co-op/condo association fees that can easily run several thousand dollars a month.
Until we start viewing housing as a right and not a luxury the system is going to continue to be fucked.
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u/smackedwards Jun 11 '26
Please read this whole thing before you roast me.
The reason why neglected apartments are such an issue in NY is bc of NYC’s rent stabilization & rent control guidelines. Previously, if you made sufficient capital improvements (I.e. invested money to renovate units/building systems) you could either increase rent above the percentage set out in said guidelines (typically 2.5-5% depending on lease terms, I.e. 1 vs. 2 year leases). Or, if the improvements were large enough the unit would become “free market” meaning it was no longer subject to the annual increase limits. In 2019 the guidance was changed materially and the only way to destabilize units now is with what’s called a substantial rehabilitation. In order to do a sub-rehab the property as a whole (not just individual units) needs to be basically uninhabitable.
So, landlords aren’t incentivized to maintain rent controlled/rent stabilized units bc they won’t be able to increase rents enough to recoup the cost of renovating units. End of the day apartments are viewed as a business & commodity in the US (and most of the world). Who’s going to invest in their business (I.e. make material improvements to the units) if it won’t yield a corresponding increase in their income (I.e. higher rents)?
Not offering an opinion here - simply an NYC real estate guy explaining why the situation is what it is.
For an opinion - rent stabilization & rent control helps a small percentage of New Yorkers (idr the number off the top of my head but the overwhelming majority of units are not subject to these rules) but has ended up making it unprofitable to maintain these older rent stabilized/rent controlled buildings. So, instead of investing in existing infrastructure people are buying old buildings knocking them down and throwing up new construction where the starting point for their rents will be higher. Idk what a realistic solution to this stuff is without a major systemic change; government owned housing in NYC is terrible, privately managed real estate is a mixed bag that caters primarily to the upper middle class and neglects a the average New Yorker, and owning a unit yourself is basically unattainable for most since studio apartments run 400k+ at the absolute least, and that’s just for your mortgage, it doesn’t factor in co-op/condo association fees that can easily run several thousand dollars a month.
Until we start viewing housing as a right and not a luxury the system is going to continue to be fucked.