Two sets of rules shape the rent on a New York City rental: rent stabilization, which covers much of the older apartment stock, and Good Cause Eviction, which since 2024 has covered many market-rate apartments as well. Both affect what a building is worth and what a lender will count.
Rent stabilization
- Which buildings. Most rent-stabilized apartments are in buildings of six or more units built before 1974, along with newer buildings that took tax benefits.
- The 2019 law. The Housing Stability and Tenant Protection Act ended vacancy decontrol and high-rent deregulation and sharply limited rent increases for improvements. A stabilized apartment generally stays stabilized.
- Rent increases. The Rent Guidelines Board sets the allowable increase each year for one- and two-year leases.
- Registration. Owners register stabilized units each year with New York State Homes and Community Renewal. Ask for the registration history before you buy.
Good Cause Eviction
Good Cause Eviction took effect in New York City in April 2024. In covered units it limits rent increases to a local standard, the inflation rate plus 5% with a 10% cap, unless the owner can justify more, and it requires a good cause, such as non-payment, to evict or decline to renew.
Who is exempt
- Owners of 10 or fewer units in New York State, counting each owner behind an LLC
- Owner-occupied buildings of 10 or fewer units
- Buildings first occupied on or after January 1, 2009, for 30 years
- Units renting above 245% of fair market rent
- Units already covered by rent stabilization
What this means for a purchase and a loan
- Underwrite in-place rents. In a stabilized or Good Cause unit you cannot count on raising the rent to market. We size rental loans on the rent the property can actually earn.
- Check exemptions carefully. A small owner can lose the Good Cause exemption by buying more units. Know your count.
- Vacant delivery matters. A one- to four-family home delivered vacant is far simpler to renovate or rent than one with long-term tenants.
- Get legal advice. Rent law in New York changes often. Have your attorney review the rent roll and leases before you sign.
Common questions
Generally not, since stabilization mainly covers buildings of six or more units built before 1974. Good Cause Eviction may apply unless the owner is exempt.
We review them case by case on the in-place rent roll, through our rental and commercial programs.
The state law applies automatically in New York City. Other cities, towns and villages had to opt in, and only some have. Check the municipality.