The Housing Stability and Tenant Protection Act of 2019 rewrote NYC multifamily underwriting. Five years on, the market has adjusted, and buyers who underwrite regulated rent rolls line by line 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
Even under the current rules, returns still come from running the building better, cutting expenses and spending capital only where it earns a return. Underwrite conservatively, then execute precisely.
Market Pricing: Regulated vs. Free-Market
Rent-stabilized portfolios trade at a meaningful cap rate premium to free-market product. A buyer with a long hold can treat that spread as the opportunity.