Rising Costs Outpace Rent Growth in Stabilized NYC Units: Report
Such properties risk becoming unsustainable, according to the Community Preservation Corp.
Since 2020, operating costs across rent-stabilized New York City units registered a 6.5 percent average yearly increase, clocking in at $10,016 per unit in 2024, according to a report by the Community Preservation Corp. This upward movement was mainly driven by insurance costs—which surged 75 percent during the timeframe—general and administrative costs, which saw a 52 percent increase, as well as utilities, up 21 percent.
Between 2020 and 2024, stabilized NYC rents were allowed to go up 11.0 percent, while expenses saw a compound 27 percent rise, with rent caps and weaker rent collections suppressing income and leaving assets unable to cover debt payments, the CPC argues.
READ ALSO: Mamdani Announces City-Backed Multifamily Insurance Offering
Rising expenses squeezing the bottom line is not unique to New York City. Operating costs, particularly insurance costs, rose significantly nationwide in the post-pandemic landscape. For the whole country, affordable housing expenses peaked at 7.8 percent annual growth between 2022 and 2023, according to a recent Yardi Matrix report, with insurance costs up a whopping 126.2 percent between 2020 and 2025.
Going forward, the CPC’s projections point to compounding issues in the rent-stabilized space, especially for lower-rent areas such as the Bronx.
In terms of solutions, the CPC proposes several strategies, including tax relief, insurance reforms and utility stabilization, which could potentially close the gap between costs and revenue. On the operations side, faster leasing, improved voucher systems and allowing rents to reset at turnover are also offered as alternatives.
The survey consulted borrowers, both on the for-profit and non-profit sides, to get a sample of 324 loans encompassing 14,552 rent-stabilized units. The properties are overwhelmingly located outside Manhattan, with an average building size of 45 units.
