Brokers Say RGB Vote Pushed Rent-Stabilized Values Lower

The evening New York’s Rent Guidelines Board voted to freeze rents in rent-stabilized apartments, Michael Weiser believed he was about to pull in a deal.

Weiser, president of GFI Realty Services, was marketing a rent-stabilized portfolio in Upper Manhattan. The owner had already walked away and the lender on the mortgage was involved in the sale. The bank was ready to accept an offer in the mid-$5 million range.

The night of the vote, Weiser checked with a potential buyer, who said they were still on board.

However, the following morning the buyer reduced their offer by several hundred thousand dollars. The deal fell apart.

“This is a deal where the owners are walking away already,” Weiser said. “The bank’s been fantastic, but there’s only so much pain they could take as well.”

The market for New York’s rent-stabilized properties took a dive after 2019, when the state legislature closed avenues for landlords to increase rents. It softened even further when Mayor Zohran Mamdani rode into Gracie Mansion on the promise of a rent freeze for stabilized units.

But brokers say the full freeze that the board approved in June — 0 percent increases on both one- and two-year leases — was still not fully priced into the market. They’re seeing buyers lower what they’re willing to pay for a rent-stabilized property.

“What was not fully priced in was the consummation of the worst-case scenario,” said Shimon Shkury, president of Ariel Property Advisors. “From the conversations we’ve had with bidders, they are taking this worst case scenario and saying, ‘We are going to lower our pricing expectations moving forward.’”

In some cases, buyers are renegotiating in light of the news.

“A good chunk of the bidders are looking for some sort of a retrade,” said Lev Mavashev, founder of Alpha Realty, who brokers sales of rent-stabilized buildings.

Shallini Mehra, managing director of Meridian Investment Sales, said she hasn’t seen any retrades just yet.

“But it will put downward pressure on all stabilized product,” she said.

Brokers say most buyers interested in buying rent-stabilized property had clear eyes. Landlords were once able to raise the rents in rent-stabilized units upon vacancy or renovations, and could also deregulate an apartment after the rent reached a specific value.

That sparked investor interest, and values swelled. But in response to complaints from tenant groups, the state passed the Housing Stability and Tenant Protection Act in 2019. That legislation closed those avenues to increase revenue. Investors fled and values cratered.

From 2019 to 2025, the average per unit price of a heavily rent-stabilized property fell 40 percent, according to Ariel Property Advisors, from $270,000 to $163,000.

Those currently buying rent-stabilized buildings are largely long-time operators who already have the staff and operations capacity to run the buildings.

“They’re already running many buildings in the area,” Weiser said. “They can’t get out so they might as well average down.”

Buyers mostly understood the impact of the board’s decision, but may not have anticipated a two-year freeze. That is driving prices further down, Weiser said.

And newcomers, lured in the past few months by the low basis prices for rent-stabilized buildings, are likely unfamiliar with the environment. They see cheap deals, but after the vote on the freeze, are thinking those aren’t cheap enough.

“There’s a bucket of buyers that are just entering the space because they’re hearing all this. They’re hearing all the headlines and the bad press on rent-stabilized buildings and they’re like, ‘Okay, it’s a great time to buy cheap,’” Mavashev said. “Those are the guys that are leveraging this for retrade or some sort of pullback on their initial offer.”