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New York City Mayor Zohran Mamdani. / Photo courtesy of Reuters, Yonhap News Agency

Landlords owning rent-stabilized apartments have taken legal action against New York City's rent freeze measure.

According to a complaint filed in New York State Court on July 22 (local time), five landlord plaintiffs claimed that the New York City Rent Guidelines Board (RGB) failed to observe established legal procedures during its vote to freeze rents. The plaintiffs asserted that the board surrendered its independence and forced through the resolution based on biased data aligned with the administration's policy stance.

The New York City Rent Guidelines Board voted on June 25 to freeze rents on approximately one million rent-stabilized apartments. Following this decision, rents for one- and two-year leases starting on or after October 1 will be frozen.

Rent-stabilized apartments are housing units in older multi-family buildings on which New York City limits rent increases to protect tenants.

Randy Mastro, an attorney representing the plaintiffs, criticized the decision, saying, "The board rendered its decision based on biased data without reflecting the actual increase in operating costs incurred by landlords," adding, "It was nothing more than a rubber-stamp exercise that abandoned its function as an independent investigative body."

In response, a New York City official stated, "The board operates independently in accordance with relevant laws and regulations," adding, "We believe it reached a reasonable decision by comprehensively considering diverse market data, including housing cost burdens and the financial conditions of landlords."

Stark differences in perspective between tenants and landlords continue to divide New York City's housing market.

Tenants and the city maintain that while rents in key areas like Manhattan have steadily climbed over recent years, tenant incomes have failed to keep pace, making the rent freeze an essential measure to prevent resident displacement and ensure housing stability.

Landlords argue that with persistent high interest rates, rising utility bills and insurance premiums, and the amended 2019 rent regulation laws already pushing their financial strain to the limit, a continued rent freeze will inevitably lead to neglected building maintenance and financial ruin.

The rent freeze stands as one of New York City Mayor Zohran Mamdani's key campaign pledges. Last week, he unveiled a 23-point plan addressing various tenant grievances, which includes stepping up city-level legal action against landlords violating safety regulations.

Real estate groups criticized the plan, claiming it unfairly demonizes their business.

                                                                                                          Lee Jeong-eun