Small Landlords at Great Risk From Mamdani's Rental Plan

Some of New York City's longtime small landlords say rising costs, tighter rent regulations, and new housing proposals from Mayor Zohran Mamdani are pushing them to consider selling properties that have been in their families for decades, The Wall Street Journal reported on Monday.

The "mom-and-pop" landlords say they are facing growing financial pressure that threatens a model of property ownership that once formed a significant part of New York City's housing market.

For decades, owning a small apartment building — even one with just a handful of units — provided steady income for middle-class families who operated rent-stabilized housing. Rents generally went up with inflation and apartments in popular neighborhoods rarely sat vacant.

But landlords say the dynamic has shifted in recent years. Some properties now generate little profit and, in some cases, have become financially unsustainable.

Several landlords say banks have avoided foreclosing on struggling properties partly because lenders do not want distressed buildings on their balance sheets.

Some owners have scaled back maintenance and upgrades, saying limited potential returns make new investments difficult. At the same time, Mamdani has pledged increased scrutiny of landlords who fail to properly maintain their buildings.

However, large real estate companies and real estate investment trusts have been better positioned to absorb rising costs because they typically have broader financial resources and diversified holdings.

Those firms have also benefited from rising rents in parts of the city. Median rents for Manhattan apartments reached a record $5,000 per month in February, according to data from the Corcoran Group.

Mamdani has argued that freezing rents is necessary to protect lower-income tenants from rapidly increasing housing costs. He has said a rise in property taxes would be considered only if the city cannot secure new revenue from higher taxes on wealthy residents.

A City Hall spokesperson said the mayor's upcoming housing plan will include efforts to reduce insurance costs and reform the city's property-tax system to provide relief for rent-stabilized property owners.

Still, some landlords say the proposals could accelerate the exit of smaller operators from the market.

Many landlords trace the beginning of their financial challenges to a 2019 New York law that tightened rules governing rent-stabilized apartments and limited their ability to raise rents. The situation worsened after interest rates climbed sharply beginning in 2022.

As borrowing costs rose, many landlords found themselves carrying higher-cost debt while property values for rent-stabilized buildings declined. Lending to the sector also fell significantly.

From 2019 to 2025, the volume of loans issued for rent-stabilized properties in New York City dropped by 59%, according to data from credit-analysis firm Atrium Data.

Some owners say selling is not an option. Howard Poret said he must keep the Brooklyn building his family has owned for three generations.

Poret, 65, said he owes $24 million on the property. Although he estimated it could sell for about $30 million, he said the capital-gains taxes would exceed his profit.

Poret said the building once served as his retirement plan, but he estimates its value dropped significantly following the 2019 rent regulations.

Industry data suggest more small landlords are selling their properties to corporate buyers.

By 2014, corporations were purchasing nearly four times as many apartment buildings from individuals as individuals were buying from corporations, according to research by housing nonprofit JustFix.