Why Are Many New York Apartments Empty? Rent Laws.

Ms. Gelinas, a contributing Opinion writer, is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.

In Upper Manhattan, two units sit empty in two well-maintained, century-old mid-rise elevator buildings. One, a four- or five-bedroom unit with a large kitchen and midday light spilling through the back room, would be the perfect space for a family with young children or for a group of roommates; it would rent for about $3,700 on the open market. The other, a ground-floor one-bedroom, would make a cozy home for a single adult or a couple, and would command about $2,500 on the open market.

But the units aren’t for rent and probably won’t be anytime soon. After decades with the same tenant, the large apartment needs a full overhaul at a cost likely exceeding $150,000. The smaller unit was packed to the ceiling with the belongings of a deceased tenant; after I visited, the landlord spent about $3,000 to clear it out. It, too, needs a gut renovation.

It makes no economic sense for the property owners to invest the necessary capital to make these apartments livable because of changes the New York State Legislature made to rent regulation laws in 2019. The state capped the amount that owners could recoup for renovations, now allowing them to pass through, at most, $50,000 in such costs over time. It also ended the deregulation of higher-priced vacant units and tightened restrictions on rent increases for lower-priced vacant units.

The rent on these two empty apartments is about $1,000 and $900 a month, respectively, meaning the new restrictions make new investments unjustifiable. Add to this stress Mayor Zohran Mamdani’s proposal for a four-year rent freeze, and both apartments are perversely more valuable empty. Investing in a Treasury bond would yield a better return than investing in the apartment.

So these potential homes have joined the more than 26,000 rent-regulated units that sat indefinitely empty as of 2023. Nearly one in 10 buildings with units that fall under rent regulation lost money that year, nearly double the level of a decade ago.

The city is facing a slow-motion degradation of a critical urban asset unless the mayor abandons his rent freeze and persuades the state to let landlords more easily recoup investment costs.

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Nicole Gelinas is a contributing editor for the Manhattan Institute’s City Journal.

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