New York's rent stabilization system is one of the most complex landlord regulations in the country. If you own or are considering purchasing a rental property in New York City or surrounding areas, understanding rent stabilization is not optional — it directly controls how much rent you can charge, how much you can raise it, and how difficult it is to remove a tenant. The Housing Stability and Tenant Protection Act of 2019 (HSTPA) made the system significantly more restrictive for landlords.

Here is what small landlords need to know about rent stabilization in 2026.

Which Buildings Are Covered

Rent stabilization generally applies to buildings with six or more units that were built between February 1, 1947, and January 1, 1974, in New York City. Buildings constructed after 1974 may be covered if they received certain tax benefits (like J-51 or 421-a tax abatements). Some buildings in Nassau, Westchester, and Rockland counties are also covered under the Emergency Tenant Protection Act (ETPA) if the local municipality has opted in.

Importantly, since the 2019 HSTPA, there is no longer a "high-rent vacancy decontrol" threshold. Previously, landlords could deregulate a unit when the legal regulated rent exceeded a certain amount and the unit became vacant. That pathway was permanently eliminated. Once a unit is rent-stabilized, it stays rent-stabilized.

Rent Increase Limits

The Rent Guidelines Board (RGB) sets maximum annual rent increases for rent-stabilized apartments. For lease renewals effective October 2025 through September 2026, the RGB approved increases of 2.75% for one-year leases and 5.25% for two-year leases. These percentages change every year and apply only to lease renewals — not to new tenants in vacant units. For vacant units, landlords could previously claim a "vacancy bonus" of up to 20%, but the 2019 HSTPA eliminated vacancy bonuses entirely. You can only charge what the prior tenant paid, plus the RGB guideline increase.

Major Capital Improvements (MCIs) and Individual Apartment Improvements (IAIs)

Before 2019, landlords used MCIs and IAIs as a pathway to gradually increase rents toward market rate. The HSTPA severely limited both. MCI rent increases are now capped at 2% per year (down from 6%), and the total increase phases out after 30 years. IAI increases are limited to $15,000 over a 15-year period per vacancy, and can only be done when an apartment is vacant. These changes make it much harder to offset major renovation costs through rent increases.

Tenant Protections and Lease Renewals

Rent-stabilized tenants have the right to a lease renewal. You cannot refuse to renew a rent-stabilized lease except for specific grounds like non-payment, violation of lease terms, or owner occupancy (and the owner-use exception has strict requirements). Evicting a rent-stabilized tenant is significantly harder and more expensive than evicting a market-rate tenant. Good-cause eviction protections, combined with rent stabilization, mean that tenants have strong rights to remain in the unit indefinitely.

What This Means for Small Landlords

If you own a small building in NYC that falls under rent stabilization, your rental income growth is capped by the RGB guidelines. You cannot raise rents to market rate when a tenant leaves. You cannot deregulate units through renovation. And eviction costs — both legal fees and lost rent during proceedings — are substantially higher than in other states. Before purchasing a rent-stabilized building, run your numbers conservatively: assume 2-3% annual rent growth, not market growth, and factor in the cost of compliance with registration requirements, lease renewal obligations, and limited renovation recovery.

That said, rent-stabilized buildings can still be good investments if purchased at the right price. The key is buying based on actual regulated rents, not projected deregulation — a strategy that no longer works post-HSTPA.

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Frequently Asked Questions

What is rent stabilization in New York?

Rent stabilization is a system that limits rent increases for covered apartments in New York City and certain surrounding areas. Covered buildings are typically those with 6 or more units built before 1974.