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On Saturday, New York State adopted a massive overhaul of its rent regulations, enacting a historic tip of the scale in favor of tenants over landlords. The laws close a number of loopholes in the previous rent regulations that landlords have long exploited to raise rents and evict tenants—methods that have shrunk New York City's supply of rent-stabilized apartments, in particular, by tens of thousands of units in the past few years alone.

The bills limit the ability of landlords of the city's nearly one million rent-regulated apartments to raise rents when a unit becomes vacant or needs repairs, gives renters additional protections against eviction, and ends a practice called "vacancy decontrol," through which a vacant rent-stabilized apartment could revert to market-rate if the rent reached a certain amount. The legislation also allows municipalities across the state to adopt their own rent regulations, among other provisions.

Unsurprisingly, the changes have prompted massive protest from the state's high-powered real-estate industry. In the months leading up to the previous laws' expiration, the state's biggest real-estate trade associations created organizations like Responsible Rent Reform and the Alliance for Rental Excellence to pour hundreds of thousands of dollars into ad campaigns and to organize protests at the state house. The industry sent bus-loads of construction workers to Albany, replete with matching T-shirts and signs, to argue that the new legislation will remove incentives for landlords to repair apartments, hurting both the city's housing stock and construction workers.

One of the real-estate industry's core messages has been a cry to help the city's "mom and pop" landlords who, they say, would be devastated by the legislation, dragging down the city's economy along with them. In one of several similar videos released by Responsible Rent Reform, an immigrant landlord complains that he already has to work two extra jobs to meet the expensive costs of maintaining his building, which he calls his "American dream." "If Albany makes the costs higher, I lose the building," he implores.

Tenants rights advocates have long decried this messaging as a red herring. "A narrative about mom and pop landlords that's being bought and paid for by the biggest landlords in the country just doesn't make sense," says Jonathan Westin, executive director of New York Communities for Change, a grassroots organization.

There's little doubt that there are landlords in the city that stand to lose out as a result of the legislation, but the question is which ones—and the numbers tell a different story than the real-estate industry does.

Previously unreleased data collected by Housing Justice for All, the statewide coalition that drove the campaign for the new legislation, and JustFix, a non-profit that builds technology to support tenants' rights, shows just how misleading big real estate's rallying cry for "mom and pop" landlords really is. According to property records from December of 2018, only 13 percent of all apartments in New York City are owned by landlords who own just one building. In contrast, 27 percent of apartments (nearly 630,000 units) are owned by landlords with portfolios of more than 61 buildings.

Big landlords' hold over rent-regulated buildings is even more striking. Rent-regulated buildings in the city account for just 9 percent of the total number of buildings owned by landlords with just one building, while they account for over half of the buildings owned by landlords who own over 20 buildings.

In contrast to the real-estate industry's messaging, big landlords have a lot to lose from more stringent rent regulations, and not just because of their disproportionate ownership—but because of a growth model that relies explicitly on exploiting the loopholes that the new regulations will close.


For many real-estate investment and private-equity firms, the housing bubble collapse solidified a profitable business model: Buy properties for cheap, evict tenants, flip units, and jack up rents. According to a report by the Center for New York City Neighborhoods, the annual number of homes in the city bought by investors has doubled since the financial crisis: in 2017, 18 percent of all home purchases were by investors, up from eight percent in 2008. Corporate landlords' reach extends beyond the city, with investors gaining a strong foothold in small upstate cities in the Hudson Valley and even in mobile home communities.

"When you think about the story of the foreclosure crisis on a broader scale, this is about the displacement of a lot of working and middle class communities of color," says Caroline Nagy, deputy director for policy and research at CNYCN, which advocates for working-class homeowners. "[It's] essentially a transfer of land from these communities to investors—to people who are seeking to make profit off the housing."

The Housing Justice for All and JustFix report shows exactly how the profit model has been so successful. According to 2018 eviction data, landlords in the city associated with more than 60 buildings complete evictions at 10 times the rate of landlords who own just one building. Eviction rates are higher across the board in rent-regulated buildings, with landlords associated with more than 60 buildings completing evictions of rent-regulated tenants at seven times the rate of landlords who own only one building.

Bigger landlords also used a loophole allowing for rent increases tied to building improvements—called major capital improvements (MCI)—far more often than smaller landlords: JustFix found that, on average, buildings with MCI increases belong to portfolios that are more than double the size of an average New York City portfolio.

"It's a perpetual growth model of evicting tenants, putting new tenants in, increasing rent—rinse, recycle, repeat," Westin says.

Raquel Namuche, an organizer with the Ridgewood Tenants Union, a tenant's rights organization in Ridgewood, Queens, sees this sort of behavior over and over again by big landlords in the largely Latino neighborhood. "It seems that the predatory equity companies and biggest corporate landlords come in with a planned out scheme with a very particular intentional business model of literally driving out long-term working-class residents," she says. "It's not something I see from smaller homeowners," for whom such a constant churn of tenants is much harder to maintain. Research by the Federal Reserve Bank of Atlanta showed a similar pattern of disproportionate eviction by corporate landlords.

The regulation that would have punched the biggest hole in this business model was omitted from the legislative package ultimately signed by Governor Andrew Cuomo: a prohibition on evictions without "good cause."

However, the bills that were passed go a long way toward disrupting big landlords' profit margins. Restrictions on MCIs will prevent landlords from raising rents in order to complete building repairs, which advocates say corporate landlords have done to fill investors' pockets. The new limitations on landlords' ability to raise rents on, and ultimately deregulate, vacant units, will disincentivize evictions.

"Aggressively buying up rent-stabilized buildings and destabilizing them as part of their business model—they're not going to be able to do that anymore," says Cea Weaver, campaign coordinator of Housing Justice for All. "The rent reforms we won are still going to allow landlords to modestly profit, but they're not going to be able to make money hand over fist based off evictions of rent-stabilized tenants."