NYC Multifamily Investment Guide: Navigating Rent Regulation
A practical guide to underwriting NYC multifamily in a rent-regulated environment, with insights on HSTPA impacts and value-add strategies.
The Housing Stability and Tenant Protection Act of 2019 transformed NYC multifamily underwriting. Five years later, the market has adapted, and sophisticated buyers are finding value.
Understanding the Regulatory Framework
- Vacancy decontrol elimination and its impact on long-term projections
- IAI (Individual Apartment Improvement) limitations
- MCI (Major Capital Improvement) caps and amortization
- Preferential rent implications
Where Value-Add Still Works
Despite regulatory constraints, operational improvements, expense reduction, and strategic capital deployment can drive returns. The key is underwriting conservatively and executing precisely.
Market Pricing Dynamics
Rent-stabilized portfolios trade at meaningful cap rate premiums to free-market product. For buyers with long time horizons, this spread may represent opportunity.
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