‘We Know It’s Going To Be Bad’: Rent Regulation Reform Already Hurting Multifamily Market
Rent regulations laws that affect nearly 1 million apartments in New York City are set to be renewed in June. But with the state Senate controlled by Democrats for the first time in nearly a decade, the commercial real estate industry is bracing for broad, profound changes to rent-regulation laws that deeply impact their business.
That reform — and uncertainty about how it will actually look — has spooked some investors, commercial real estate players told Bisnow. Some are predicting a significant drop-off in dollar volume for multifamily assets in the first three quarters of the year, along with sliding prices.
“It won’t be until the beginning of July until will know what the new regulations will look like,” JLL Investment Sales Chairman Bob Knakal said. “People are taking a ‘wait-and-see attitude’ … Investors really want to see what the new horizon is going to look like.”
There are a slew of potential changes, some of which have made it to bill form. Top of mind for building owners are changes to or elimination of vacancy decontrol — which allows for apartments to be destabilized if the rent hits the luxury deregulation threshold of $2,733 and the unit becomes vacant.