John Walkup (pictured top), co-founder of UrbanDigs, a real estate data analytics company focused on the New York City market, said the vote is beneficial for the tenants it covers, but the overall positive impact is limited.
“I don’t think it does much, unfortunately, to solve the housing affordability problem at large,” Walkup told Mortgage Professional America. “The broader affordability issue is still, in my opinion, a structural mismatch between supply and demand. Did this increase supply? And the answer is no. So while this is helpful on the affordability issue for the tenants, it does not increase supply. So it’s not really a long-term affordability solution.”
A rental market divided
Walkup said the vote creates a divided dynamic in the city’s rental market. Landlords with rent-stabilized units face frozen income against rising operating costs, with no mechanism to recover the difference.
“If you’re planning on investing here, where are you going to put your money? In the free market,” he said. “Is there a lot of building happening? No. So the prices for the free market one are probably going to be the beneficiaries of this.”
Stabilized tenants have little reason to move now that their rents are locked, Walkup said. That removes supply from the free market, since fewer people cycling out of stabilized apartments means fewer available units for those renting at market rate.
