A Growing Problem
More Rent Stabilized Units Registered Vacant Each Year
According to the Division of Housing and Community Renewal, the number of rent-stabilized apartments registered in New York State in 2025 was 1,064,100. Of those units, 56,800 (5.3%) were registered as vacant. This is a number that is steadily rising, up from 50,500 in 2024 and 47,600 in 2023. The trend is clear. We are losing housing.
As bad as these numbers are, the problem is worse.
Everyone who lives in New York is aware that there is a housing shortage and an affordability crisis. Demand for affordable housing is as high as it has ever been. Lawmakers have taken several steps to incentivize the building of new housing. The city approved a large upzoning in 2024 and voters in 2025 approved ballot measures to make housing approval easier. This year, Gov. Kathy Hochul has proposed reforms to SEQRA or the State Environmental Quality Review Act, which is attributed with long delays for housing development that drive up costs and make the state less affordable.
These steps are vital to addressing our housing crisis. But so is the preservation of existing housing stock. In this year’s budget, there are no efforts.
There has been less of an effort to stop the loss of rent-stabilized housing. The cause of this decline is fairly straightforward. The changes to the rent laws in 2019 eliminated the ability to increase the rents on turnover, other than an $83.33 increase if $15,000 of renovations were performed. In 2024, the law was changed to allow an increase of $166.7 if $30,000 in renovations were performed. The flaw in this system is that many apartments, on turnover, need far more than $30,000 in renovations. The apartments with the lowest rents typically have the highest upgrade costs to make sure the apartment meets updated housing code standards that are required on turnover.
NYAA estimates that the city loses an average of 500 to 700 rent-stabilized apartments a month to permanent vacancy. Data from the Division of Housing and Community Renewal backs up this estimate. Both the number of units registered as vacant and the number of apartments registered as temporary exempt have increased over the past few years, following the COVID-19 bump that presented itself in the 2021 registration numbers.
What is not included in the publicly displayed numbers is the number of apartments that are registered as owner occupied or simply registered as blanks. A memo prepared by the Rent Guidelines Board last year suggested that more than 110,000 apartments were registered with errors, blanks, owner-occupied, or temporary exempt in 2024. This is on top of the more than 50,000 units registered as vacant. In total, the New York Apartment Association estimates that as many as 100,000 apartments are not being rented because of the current laws.
One solution to this problem that was proposed by the Department of Housing Preservation and Development was a program called Unlocking Doors. This is eligible for apartments with rents below $1200 for a one-bedroom, under $1300 for a two-bedroom, and under $1400 for a three bedroom. Originally, it would give owners $25,000 in reimbursement if they renovated the units and rented to a voucher holder. The program has now increased to $50,000.
Unsurprisingly, nobody has utilized this program. The reason is quite simple. It costs more than $1200 a month to operate a one-bedroom apartment and far more than $1400 to operate a three-bedroom apartment. Additionally, it costs far more than $50,000 to renovate the unit. So, even if you were 100% confident that you would be reimbursed for part of the renovation costs, the property owner would be losing money.
Just like the Individual Apartment Improvements don’t work for a large number of apartments, Unlocking Doors does not work.
The loss of apartment supply hurts the city as a whole, but it also has an acute impact on the financial health of buildings. Property owners are forced into the impossible choice of carrying these losses or investing money into an apartment that will still lose money moving forward. The lost revenue lowers the overall building health, pulling funds that could be spent on repairs, maintenance, growing property taxes, skyrocketing insurance, and other mandatory costs.
The strict vacancy control on rents also lowers apartment building values, which has a negative impact on the renters currently living in the building. Typically, rents don’t cover the full cost of running a building. Large capital expenditures like replacing roofs, boilers, elevators, or mandatory façade work are typically financed by debt on the building.
When the value of the building declines, there is no access to new capital.
The result of the 2019 rent laws has been clear. Increased number of vacant units, declining building values, and widespread fiscal distress, which is starting to present itself with growing physical decline in buildings. Violation counts have increased, as have complaints to 3-1-1. This decline has been dubbed a “death spiral” by the Citizens Budget Commission and the NYU Furman Center has warned that the city could permanently lose tens of thousands if not hundreds of thousands of these affordable apartments in the coming years.
To better understand this decline, we have pulled three case studies that explain why a rent-stabilized apartment has become permanently vacant.
Case Study 1:
2BR apartment in the N. Manhattan (Here)
Rent: $1,070
Renovation Cost: $120,000
Vacant Since: 2023
Current State:
The building is a 6-story walkup that was built in 1910. The average rents in the building are $1,676. The cost of operating the building was $775 per unit, per month, in 2024. The taxes are $361 per unit, per month. This specific vacant unit was occupied for at least 40 years prior to the tenant leaving in 2023.
The apartment requires a full gut renovation. The walls, plumbing, and electrical all need to be replaced. Floors and ceilings need to be leveled. The cost for this type of renovation is estimated at about $120,000.
$30,000 Individual Apartment Improvement Path:
This building is 35 units, so the rent increase would be $178.57 for $30,000 in improvements. This would bring the rent to $1,249.
The loan payment for this renovation would be $1,325 per month. Operating costs would be at least $775, and the taxes are $361. The total operating cost would be $2,461 for a rent of $1,249.
$50,000 IAI Path:
This unit would be eligible for the $50,000 IAI due to the long-term tenancy of the prior renter. Under this path, the rent would increase to $1,417. The overall cost of operating the apartment would remain $2,461 per month.
Unlocking Doors:
The low rent on this unit would make it eligible for the Unlocking Doors program, but the owner would not be allowed to take an IAI as well. Assuming the apartment receives a $50,000 reimbursement from the government, the loan payments would be reduced to about $775 per month and the overall cost would be $1,911. The rent would be $1,070
Future Outlook:
Taking on significant debt to renovate this vacant apartment would substantially reduce the overall fiscal health of the building and put the physical health of the building at risk. Currently, rental incomes cover costs and allow the owner of this building to make sure there are no violations and there have been very few complaints over the past two years.
Right now, the building has conservative debt payments that have helped pay for mandatory upgrades. The steady stewardship of this building for decades has been able to preserve high quality housing, while providing housing that is affordable to families who are at roughly 55% Area Median Income. Taking on more debt to renovate a vacant unit that will continue to reduce the overall fiscal health of the building would be unwise.
Case Study 2:
2BR apartment in Brooklyn (link here)
Rent: $1,240
Renovation Cost: $50,000 to $90,000
Vacant Since: 2020
Current State:
This apartment is in a 76-unit building with average rents of $1,549. In 2024, the building spent $698 per unit, per month, in operating expenses. It paid $377 per unit, per month, in taxes.
This unit was renovated in 2008. The property owner used lead-paint encapsulation and it was deemed lead-safe. Changes in the law that took place in 2019 now require the apartment to undergo a full gut renovation of the walls and friction surfaces to remove all traces of lead-based paint. It would then require new walls and likely ceilings to be put in the apartment.
The current electrical systems do not need to be replaced, but it may be wise to further upgrade since there is a political push to electrify buildings. If this building had to undergo a full switch to electrification, upgrades to this apartment would be necessary. This would change the overall cost of the renovation.
$30,000 Individual Apartment Improvement Path:
Under this path, the rent for the apartment would increase to $1,407. This is lower than the building average and the rent would be about 37% of the Area Median Income, following the renovation.
The cost of the renovation would still be at least $50,000, so the debt payment on the loan would be about $555 a month. The cost of operating the unit is more than $697. Taxes are $377. Total cost would be at least $1,629 for this apartment on a rent of $1,407.
$50,000 IAI Path:
The previous tenant lived in the apartment from 2008 to 2020, when they left during COVID-19. Because the tenancy was not more than 25 years, they would not be eligible for this path. They are, however, eligible for the secondary path to use a $50,000 IAI because they have registered the unit as vacant for three consecutive years.
The post renovation rent for the apartment would be $1,560. The total cost to operate the unit, factoring in the loan necessary for renovations, would be $1,629.
Unlocking Doors:
This unit would be eligible for the unlocking doors program because the rent is below $1,300 for a two-bedroom apartment. Under this program, the owner would have to find the capital to pay for the repairs first, then work with the city to find a voucher holder to move in, before they were reimbursed $50,000 for the renovations necessary.
The rent collected would remain $1,240, and assuming the owner was reimbursed for the full renovation cost by the city, the operating cost for the apartment would be $1,075.
Since this program is relatively new and there have been no successful attempts to use this program, there is still a risk that the owner would ultimately not be reimbursed for the capital they spent on the apartment. It is unclear if they would be able to retroactively apply for an IAI if the city failed to reimburse them.
Future Outlook:
Over the past 20 years, this building has taken out loans to pay for mandatory repairs and upgrades to comply with various City Council laws. It also has pulled equity out to cover massive losses during the COVID-19 pandemic. Currently it is operating at a slight loss, due to a large number of tenants who are not paying rent.
Because of these debt service payments and below average rental collection, the owner has not been able to renovate the unit. They do not have reserves available and they have no access to capital from a bank or lender. The building continues to be maintained well, with very low violations and few complaints.
They may indeed do it in the future, but they have no access to capital to do it currently.
Case Study 3:
1BR in East Village (Here)
Rent: $830
Renovation Cost: $150,000
Vacant Since: 2022
Current State:
This apartment is in a 5-story walkup that was constructed in 1890. The prior tenant lived in the building since the late 1970’s. The current apartment layout would be illegal to build today. It has plumbing and electrical circuits that are decades past their useful life. This unit requires a full gut renovation and alteration of the layout to comply with the modern housing standards.
$30,000 Individual Apartment Improvement Path:
Under this program, the property owner would be able to increase the rent to $1,008 after spending more than $30,000 in renovations. Since the overall cost for renovations is $150,000, minimum, the owner would need to take out a loan to finance the upgrades.
The monthly payment on that loan would be about $1,650, if financed over 10 years. The average taxes, per unit, in this building are $520. The average day to day operating costs are $900 per unit, based on Rent Guidelines Board data for similar buildings in the core of Manhattan. This means the total cost to operate this unit, post renovation, would be $3,070 for an apartment with a rent of $1,008.
$50,000 IAI Path:
Under this program the rent could rise to $1,177 after spending $50,000 in renovations. The operating costs would remain the same, $3,070, so the increase in rent would be insignificant.
Unlocking Doors:
This program would reimburse the owner $50,000 of the $150,000 renovation cost for the apartment. While the owner would still have to take out a loan to do the work, the monthly payment of that loan would be reduced to $1,110 if the $50,000 was applied. The apartment would be eligible for the program, because it has a rent below $1,200. Under the program, the owner could not take an increase on the rent, so the prior rent of $830 would remain in place.
The overall cost of operating the apartment would be $2,520 with a monthly rent of $830.
Future Outlook:
Investing in renovations to this apartment would harm the overall fiscal health of the building. Currently, the building operates on very thin margins. It has no open violations and hasn’t had any complaints from renters in 2 years. If the owner invested in renovations to this vacant unit, the building would have a cost-to-income ratio that exceeds 100%. This would put the physical health of the building at risk and likely lead to worse living conditions for the other tenants in the building.
The responsible thing for the property owner to do with this unit is to leave it vacant forever.