New York City’s latest rent freeze has once again turned the Rent Guidelines Board (RGB) into the center of the city’s housing debate. That’s a mistake.

The decision to freeze rents for both one-year and two-year rent-stabilized leases beginning October 1, 2026, through September 30, 2027, generated celebration from tenant advocates, frustration from owners and plenty of political commentary. In a 7-1 vote, the RGB approved the freeze, which will cover roughly one million rent stabilized apartments.

But the annual drama surrounding the RGB hearings is distracting from the bigger issue: New York City has not solved the long-term viability of the rent-stabilized sector.

The rent freeze is not the main problem. It is a symptom of a system that no longer works.

What Changed After 2019

To understand why, we need to look at what changed after the Housing Stability and Tenant Protection Act (HSTPA) was passed in 2019.

Before HSTPA, the annual increases approved by the RGB were important, but they weren’t the primary economic driver for many owners of rent-stabilized housing. In many cases, whether the annual increase was 1%, 2% or 3% was not what determined the long-term viability of a building.

What mattered more was the ability to reinvest in vacant apartments.

When a rent-stabilized apartment became vacant, an owner could renovate the unit, improve the housing stock and reset the rent for the next tenant within the rules that existed at the time. That new rent helped support the economics of the building. In effect, turnover units helped subsidize long-term rent-stabilized tenants who remained in place and experienced relatively modest annual increases.

That system was imperfect. It needed oversight. There were abuses, and those abuses needed to be addressed.

But the basic economic structure mattered. It created a private-sector incentive to renovate apartments, return vacant units to the market and keep capital flowing into older regulated housing.

HSTPA largely removed that mechanism. Ariel Property Advisors summarized the law shortly after passage, including its elimination of high-income/high-rent vacancy deregulation and material restrictions on how owners could recover their investment in regulated apartments.

The result was a major shift. New York did not just change rent regulations, it changed the investment model that had helped maintain much of the rent-stabilized housing stock.

The Post-HSTPA Reality

Now, many owners face a very different equation.

The rent on a vacant apartment may not justify the cost of renovating it. The ability to recover capital investment is limited. Operating expenses continue to rise while revenue is increasingly constrained. These rents are already among the lowest in the City. In 2024, pre-1974 buildings outside core Manhattan with 100% rent-stabilized units charged an average rent of $1,287 per month, and in the Bronx the average was even lower at $1,132 per month, according to the RGB.

The result is not theoretical. More than 57,000 rent stabilized units are sitting vacant, according to a letter sent by the state’s Division of Homes and Community Renewal to the RGB.

This is the backdrop for everything that follows.

The Real Problem Is Broken Economics

The rent freeze does not create new housing. It does not bring vacant units back online. It does not reduce insurance costs. It does not fix Housing Court delays. It does not lower property taxes. It does not help owners finance capital improvements. And it does not provide targeted subsidies to tenants who truly need assistance.

It simply turns the annual RGB vote into a political proxy war.

In Ariel Property Advisors’ Q1 2026 Multifamily Quarter in Review, we highlighted the growing mismatch between the cost of operating rent-stabilized housing and the rent increases allowed under the current framework. According to Ariel’s analysis of RGB data, since 2020, expenses for rent-stabilized buildings rose by about 40%, while RGB-approved rent increases rose only 16%.

The investment market has already responded. Ariel’s Q1 2026 report showed that citywide the price-per-unit values for rent-stabilized buildings declined by an average of approximately 45% from 2019 levels, with certain distressed trades occurring at far deeper discounts.

That is the market’s way of saying the economics no longer work the way they once did.

This is why the rent freeze is a smaller issue than the debate around it suggests. It is not that a 0% increase has no impact. It does. But the larger problem is that the system has become dependent on the annual RGB vote on rents because other tools for investment, preservation and vacancy rehabilitation have been removed or weakened.

Before 2019, renewal increases for existing tenants were only one part of the system. Vacancy turnover, apartment improvements and reinvestment provided another valve. That valve helped reduce pressure on current tenants because owners were not relying solely on annual renewal increases to support building economics.

Today, that valve is largely shut.

So the annual RGB vote becomes the whole fight. That is not healthy for tenants, owners, policymakers or the housing stock.

Politics Has Overtaken Policy

The RGB is supposed to weigh facts: tenant affordability, owner costs, building conditions, wages, taxes, inflation, operating expenses and the broader public interest.

But the current process has become increasingly political.

Mayor Zohran Mamdani campaigned on freezing rents. But the mayor does not directly freeze rents. The RGB does. After taking office, Mayor Mamdani appointed six members to the nine-member board. The final vote delivered the rent freeze he promised.

That may be effective politics but it is not a serious housing policy.

When the facts show rising operating expenses, rising insurance costs, rising repair costs, higher interest rates, declining asset values and tens of thousands of vacant regulated units — and the policy response is still a broad rent freeze — the city should ask whether the process is truly balancing evidence or simply ratifying a political commitment

Christina Smyth’s resignation from the RGB before the final vote should be taken seriously.

Smyth wrote in her resignation letter, “This year’s RGB order was decided last year on the campaign trail. Then in February, the Mayor appointed six of the nine members of this board. This rebuilt board was required to deliver a rent freeze. Everything since has been theater. The hearings, the reports, the public comment, the data. None of it was ever going to change the result.”

Even readers who disagree with her conclusion should care about the credibility of the RGB process. If the board becomes a political instrument rather than a fact-driven institution, New York loses one of the few forums designed to balance tenant affordability with housing preservation.

A Path Forward Would Be A Win For Tenants And The Administration

This does not need to be an owner-versus-tenant conversation.

A better path could produce better living conditions, more available apartments and more stability for current rent-stabilized tenants. The goal should not be deregulation. The goal should be reactivation, preservation and targeted affordability.

First, the city and state should allow a one-time vacancy adjustment for vacant rent-stabilized apartments, followed by re-stabilization. This would help bring units back to market, create a rational incentive to renovate and reduce pressure on the annual RGB process. The apartments would remain regulated, but the economics would allow them to be repaired and occupied.

Second, policymakers should provide property tax relief for financially stressed rent-stabilized buildings. If the public wants private owners to preserve affordable housing, the tax system should support that goal rather than work against it. I have previously written in Forbes that New York should consider property tax reform for rent-regulated housing, including a more rational tax framework for buildings with a high percentage of rent-stabilized units. In pre-1974 buildings, taxes account for 27.5% of the operating costs, according to the RGB’s Income and Expense Study of 2024 data.

Third, insurance costs must be addressed. Rising premiums are not a side issue but a growing threat to the viability of multifamily housing. They are a major operating expense, accounting for 9.3% of the operating costs in pre-1974 buildings, the RGB’s Income and Expense study shows.

Fourth, Housing Court needs more staffing and support because on average cases can take up to 15 months to resolve. This is not anti-tenant. It is a pro-functioning system. Bad tenants who abuse the process hurt good tenants, responsible owners and the housing stock itself. A system that cannot resolve disputes in a timely way creates costs that eventually show up in building conditions and investment decisions.

Fifth, New York should use subsidies and vouchers more directly. If a household needs support, support the household. Voucher programs and targeted rent subsidies can protect tenants without forcing the entire cost of affordability onto individual buildings. One path worth exploring is the use of subsidized rents or voucher support in rent-stabilized housing, including potential 610-related amendments or similar tools, for households that need deeper affordability. Under the 610-amendment, affordable housing providers must execute a regulatory agreement amendment with the lead agency to collect the full rental subsidy above the legal rent without increasing tenant costs.

Finally, New York must keep expanding the housing supply. Rent regulation can protect existing tenants, but it cannot solve a housing shortage by itself. More housing — affordable, mixed-income, market-rate, adaptive reuse and preservation — is essential to reducing pressure across the system. As I have written previously in Forbes, New York needs to focus on the signal, not the noise: production, preservation and policies that allow the city’s housing stock to remain livable and financeable.

Beyond the Rent Guidelines Board

The annual RGB vote will always attract attention. It is visible, emotional and politically useful.

But it is not the heart of the housing crisis.

The heart of the crisis is that New York has nearly one million rent-stabilized apartments that are expected to remain affordable, privately owned, physically maintained and largely unsubsidized, even as the economics of ownership become increasingly misaligned.

That cannot work indefinitely.

A rent freeze may make headlines. It may satisfy a campaign promise. It may give the appearance of action. But it does not fix the underlying problem.

New York does not need more political theater around the annual RGB vote. It needs a serious preservation strategy that aligns tenant protection, private investment and public subsidy.

The city should stop asking the RGB to carry the entire weight of the affordability crisis.

A rent freeze is not a housing strategy.

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