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.