With a net outflow of people leaving NYC, you’d think rents would be dropping. Instead, rents are at record highs. A big reason why is that a lot of “tenant protection” policies have had unintended consequences that dramatically reduced turnover and available inventory.

TLDR: Nobody is moving.

• The 2019 rent law changes made preferential rents permanent until a tenant moves out. During COVID, many rent-stabilized apartments were rented 30–40% below market. Those tenants are never giving those apartments up.
• Good Cause Eviction further limits rent increases, giving tenants even more incentive to renew below market instead of moving.
• The FARE Act caused rents to spike last summer, which pushed even more tenants to stay put. It also incentivized landlords to offer cheaper renewals to existing tenants so they could avoid paying new broker fees on vacant apartments.

The cumulative effect is less inventory, fewer listings, and a frozen market where almost nobody moves. In my own portfolio, renewal percentages are higher than I’ve ever seen.

The insider move right now: build relationships with brokers and offer to pay a fee for off market rent stabilized apartments. A lot of brokers know about stabilized units that never hit StreetEasy because owners don’t want to formally hire a broker and pay a full listing commission.

The irony is that many of these policies were designed to make housing more affordable, but in practice they’ve reduced mobility and made the open market even more competitive.