NYC landlords saw 6.2% NOI growth in 2024 — but the Bronx saw declining income, insurance costs jumped 150% since 2019, and the June 25 RGB vote could freeze rents entirely. Here is what that means for 1-4 family DSCR qualification.
· NYC landlords of rent-stabilized units saw NOI grow 6.2% between 2023 and 2024 — but that number hides a much more uneven picture across boroughs.
· Operating costs rose 4.2% citywide, and in the Bronx, NOI actually fell — meaning the headline figure flatters the real situation for many small owners.
· The June 25, 2026 final RGB vote could deliver a rent freeze or a modest increase — either way, DSCR qualification on a 1-4 family property may already be under more pressure than most investors realize.
· HSTPA eliminated vacancy bonuses and capped IAI/MCI pass-throughs in 2019, compressing small landlord revenue in ways that don't show up in the citywide NOI average.
· For NYC 1-4 family investors, the gap between stabilized and market-rate rent income creates a material underwriting difference that directly affects qualifying ratios.
The headline number sounds reassuring: net operating income for NYC rent-stabilized buildings climbed 6.2% between 2023 and 2024, according to the Rent Guidelines Board's (RGB) 2026 Income and Expense Study. But for 1-4 family property owners in the five boroughs, that figure can be deceptive. One layer deeper and what emerges is a city divided — by borough, building type, and the widening gap between what rents are allowed to be and what it actually costs to keep a building running.
NOI Rose 6.2% Between 2023 and 2024 (Nominal) — Yet Landlords Are Still Squeezed
The RGB's 2026 Income and Expense Study, which analyzed data from over 16,600 buildings, reported that landlords' net operating income rose 6.2% between 2023 and 2024. Rental income grew 4.8%, total income 4.9%, and expenses 4.2%. On paper, that looks like a healthy margin. In practice, it obscures the financial stress building beneath the surface for owners of smaller, fully stabilized properties.
RGB research staff noted that revenues generally exceed operating costs, generating funds for mortgage payments, improvements, and pre-tax profit. That framing, while technically accurate in aggregate, blends luxury buildings with temporarily stabilized units — including newer developments with market-rate apartments that benefit from tax breaks — into the same average as the four-unit Bronx walkup where every apartment is stabilized and every cost increase bites directly into the owner's take-home.
Kenny Burgos, CEO of the New York Apartment Association, argued that the citywide NOI figures are misleading because they mix free-market units and new developments receiving large tax breaks with fully stabilized buildings. For 1-4 family investors trying to assess their own financial position, the citywide NOI figure is a starting point — not a conclusion. BKDSCR's deal filter is built specifically for NYC investors who need to stress-test their numbers against rent-stabilized income rather than rely on broad market averages.
The Rent Freeze Fight, Explained
Mamdani's promise vs. the RGB's intended independence: nine members, all mayoral appointments
Mayor Zohran Mamdani made "freeze the rent" a centerpiece of his campaign — a call-and-response chant at rallies and a doorstep pitch to voters. But the rent freeze doesn't live in City Hall. It lives with the nine-member NYC Rent Guidelines Board, an independent body whose votes, by law, must be informed by the economic condition of the real estate industry, cost of living data, and other relevant factors.
While every RGB member is a mayoral appointment, the board is structured to be independent — two tenant-side members, two landlord-side members, four public members, and a chair who serves at the mayor's pleasure. Mamdani appointed a majority of the incoming board's members this year. But former RGB chairs Nestor Davidson and David Reiss, writing for Vital City, were clear that the mayor does not — and should not — control board members. The Rent Stabilization Law requires the board to make decisions based on data, and those decisions are legally challengeable if they stray from that mandate.
May 2026 preliminary vote: 0-2% for one-year leases and 0-4% for two-year leases on the table
At its May 2026 preliminary vote, the RGB put two ranges on the table: 0-2% for one-year leases and 0-4% for two-year leases. The final vote is scheduled for June 25, 2026. The lower bound on both ranges is zero — meaning a freeze remains a live possibility. For 1-4 family landlords with rent-stabilized units, the difference between a 0% and a 2% increase on a $1,681 average stabilized rent is roughly $34 per unit per month. Across a four-unit building, that's about $1,600 annually — money that may be the difference between covering a rising insurance bill or not.
Why 6.2% NOI Growth Doesn't Tell the Whole Story
Operating costs rose 4.2% between 2023 and 2024, per the 2026 Income and Expense Study
A 6.2% NOI gain sounds like a comfortable cushion — until the cost side of the ledger comes into focus. The same RGB study that reported the NOI increase also documented a 4.2% rise in operating expenses between 2023 and 2024. More recent data from the RGB's ongoing tracking shows operating costs for rent-stabilized buildings climbing 6.3% between April 2024 and March 2025. The expense trend is accelerating while the revenue side remains constrained by rent stabilization caps.
Property taxes remain the largest single expense category, representing more than a quarter of total costs for rent-stabilized buildings. Water, fuel, labor, and insurance all compound on top. For smaller buildings — where there's no portfolio of market-rate units to cross-subsidize — every cost increase hits the same pool of capped revenue.
Insurance alone surged 150% since 2019 for NYC rent-stabilized apartments
Insurance deserves its own mention. According to data cited in the RGB's 2026 study and confirmed by advocacy groups, insurance costs for NYC rent-stabilized apartments surged 150% between 2019 and 2025. That's not a typo. A cost that might have run $8,000 annually for a small Brooklyn landlord in 2019 could now run $20,000 or more — with no mechanism under stabilization to pass that increase on to tenants in any meaningful, immediate way.
The New York Apartment Association has flagged double-digit increases in insurance, property taxes, water, fuel, and labor as the core argument against a rent freeze, warning that forcing NOI below a viable threshold leads not to affordable housing — but to bankrupt housing. Vacant, deteriorating units don't serve anyone.
The Bronx: NOI declined, with Hunts Point and Longwood among the hardest-hit neighborhoods
The borough-level data in the RGB study is where the citywide average really starts to break apart. While core Manhattan saw NOI growth between 2023 and 2024, the Bronx experienced a decline in net operating income overall. In neighborhoods like Hunts Point and Longwood, NOI dropped sharply — a result that reflects the concentration of fully stabilized buildings with lower average rents and higher relative cost burdens.
The share of properties citywide with negative NOI — what the RGB classifies as financially distressed buildings — sat at 9.2% in 2024. In the Bronx, that share was meaningfully higher. NYU Furman Center senior policy fellow Mark Willis raised questions at the RGB meeting about whether the NOI figures presented to the board accurately reflected conditions on the ground, given the way mixed-income buildings skew the averages upward.
How HSTPA Kneecapped Small Landlord Revenue
Vacancy bonuses eliminated, IAI and MCI caps tightened since 2019
Before the 2019 Housing Stability and Tenant Protection Act (HSTPA), NYC landlords had several legal levers to increase revenue on rent-stabilized units: vacancy bonuses when a tenant left, Individual Apartment Improvement (IAI) pass-throughs when a unit was renovated, and Major Capital Improvement (MCI) increases when building-wide upgrades were completed. The HSTPA effectively dismantled most of these tools.
Vacancy bonuses were eliminated entirely. When a stabilized tenant leaves, the incoming tenant pays the same legal regulated rent — full stop. IAI increases were capped at amounts that rarely cover the actual cost of modern renovations, with a $15,000 lifetime cap per unit in most buildings. MCI increases were made temporary rather than permanent, further limiting their long-term revenue impact.
The result: small landlords who own buildings that were entirely rent-stabilized lost their primary mechanism for bringing rents closer to market rate over time. Combined with rising costs and an aging housing stock, HSTPA essentially locked in a structural income gap for owners of these properties — one that the RGB's annual guidelines have not come close to closing in the years since.
What the RGB Vote Means for DSCR Qualification on a 1-4 Family
How DSCR is calculated when rents are capped
Debt Service Coverage Ratio (DSCR) is the core metric for underwriting investment property loans — and it's straightforward in concept: divide the property's net operating income (or gross rental income, depending on the lender) by its total debt service obligations, including principal, interest, taxes, insurance, and any association fees (PITIA). A ratio above 1.0 means the property generates enough income to cover its debt. A ratio below 1.0 means it doesn't — at least not on paper.
When rents are capped by stabilization, the numerator of that equation is constrained. A landlord can't boost NOI by raising rents to market rate, can't capture a vacancy bonus when a tenant turns over, and faces strict limits on what improvement costs can be passed through. Meanwhile, the denominator — debt service — is driven by prevailing interest rates and loan terms, which have risen significantly since 2022. The squeeze is structural, not cyclical.
Rent-stabilized income vs. market-rate income: the underwriting gap
For a 1-4 family property in NYC, the difference between stabilized and market-rate income can be dramatic. The RGB study reported that the average stabilized apartment rent citywide was $1,681 per month in 2024. A fully market-rate comparable unit in many Brooklyn or Queens neighborhoods might rent for $2,400-$3,200 or more.
From a DSCR underwriting perspective, that income gap translates directly into qualifying ratios. A property generating $1,681 per stabilized unit versus a comparable market-rate unit at $2,600 is, in DSCR terms, a materially different asset — even if the physical building is identical. Lenders and analysts who specialize in NYC DSCR lending understand this distinction; those who don't can misread the risk profile of a property in either direction.
Borough-level NOI variance changes the qualifying ratio
Given the borough-level divergence in NOI, a blanket assumption about stabilized income is particularly dangerous when building a DSCR model. A four-unit building in Hunts Point carries a fundamentally different income profile than a comparable building in Prospect Heights or Astoria, even if both are 100% rent-stabilized. Applying a citywide average to a Bronx property isn't conservative underwriting — it's inaccurate underwriting.
The practical implication: before approaching a lender or refinancing a stabilized property, investors need borough- and neighborhood-specific NOI data, not the headline figure from the RGB study. That level of granularity is exactly what separates a qualified DSCR analysis from a back-of-envelope guess.
Mom-and-Pop Landlords Face an Existential Threshold
Brooklyn four-unit owners weighing a sale if a rent freeze is implemented
The abstract policy debate has very concrete consequences for small landlords. Small Brooklyn owners of four-unit buildings — the quintessential NYC mom-and-pop housing provider — are openly discussing whether a rent freeze would push them past the point of viability. When a building's income is capped and costs keep rising, the calculus eventually shifts from "how do I manage this asset" to "should I sell it."
That decision point is closer than many realize. A rent freeze in 2026, layered on top of five years of constrained stabilized rent growth, would effectively mean that a building's income remains flat while insurance, taxes, water, labor, and maintenance costs continue their upward trajectory. For owners who carried fixed-rate mortgages from a lower-rate environment, the math has worked — barely. For those who refinanced or purchased at 2022-2024 rates, a freeze could tip the balance.
Costs rising 6.5% annually since 2020 (Community Preservation Corp.) vs. cumulative 11% stabilized rent growth since 2020
The Community Preservation Corporation's analysis of the rent-stabilized sector between 2020 and 2024 puts the structural mismatch in stark terms. Operating costs rose an average of 6.5% per year over that period. Allowable stabilized rent increases, cumulatively, totaled only 11% over the same four years.
Run that math out: if a building's costs compound at 6.5% annually for four years, total expenses grow roughly 29%. If rents are only allowed to grow 11% in total over the same period, the gap between income and expenses widens by approximately 18 percentage points. That's not a rounding error — that's a structural income deficit that erodes NOI regardless of what the citywide average says, and it's the financial reality that a rent freeze would lock in for 2026.
Over 26,000 rent-stabilized units in NYC were vacant and unavailable for rent in 2024, according to a lawsuit filed by the Institute for Justice. The reason cited: regulated rents are too low to make those units financially viable to operate. A rent freeze doesn't create affordable housing from those units — it keeps them empty.
Run the Numbers Before the June 25 Final Vote
The RGB's final vote on June 25, 2026 is the hard deadline. Whatever the board decides — a freeze at 0%, or an increase somewhere in the 0-2% and 0-4% ranges for one- and two-year leases respectively — will set the income ceiling for rent-stabilized apartments through 2027. For 1-4 family property investors, that vote has a direct bearing on DSCR calculations, refinancing capacity, and the long-term hold-vs-sell decision.
Before that vote lands, stress-testing a specific property’s numbers against both scenarios is worth doing. What does the DSCR look like at a 0% rent adjustment? What about at 2%? How does the qualifying ratio change if insurance costs continue rising at their current pace? These are the practical inputs that determine whether a refinance makes sense, whether a sale makes more sense, or whether a 1031 exchange into a different asset class is worth considering.
The gap between the citywide NOI headline and the financial reality of a fully stabilized four-unit in the Bronx or South Brooklyn is wide enough to drive materially different decisions. Investors who run their actual numbers — not the average — are the ones positioned to act before the market moves around them.
For NYC 1-4 family investors working through the rent-stabilized landscape, BKDSCR provides deal analysis built around the realities of NYC’s rent regulation environment — investor to investor, no sales pitch.
