New York City’s apartment vacancy rate is the lowest on record—that is, until you read the fine print.

Last year, 26,310 rent-stabilized apartment units were off limits to renters even though they were technically vacant, according to a recent New York City Housing and Vacancy survey commissioned by the U.S. Census Bureau.

The reason these units are off-limits to renters is the million-dollar question.

Tenant advocates accuse landlords of stacking the deck in their own favor so they don’t have to comply with lower rents. Meanwhile, property owners blame the vacancies on high renovation costs required by regulators.

While the debate rages on, New York’s housing crisis intensifies.

Rent stabilization is a form of rent regulation designed to make housing more affordable by protecting tenants from unreasonably sharp rent increases.

But it’s not the same as rent control, which is covered under different regulations and applied to a much smaller subsection of housing.

While the number of New York’s vacant rent-stabilized units has fallen 38% from 2022 levels, it’s still alarmingly high relative to the 33,210 total units available for rent in the first nine months of 2023, according to Census Bureau estimates.

Jay Martin, executive director of the Community Housing Improvement Program, describes the latest results as a “snapshot,” which may not tell the full story.

“The 26,000 figure is the minimum number of rent-regulated units off the market; there are probably more.”

Some estimates suggest vacant rent-stabilized apartments are four times higher than what’s reported.

The apartment shortage couldn’t come at a worse time, as New York experienced its tightest housing market in more than five decades, particularly for low-income housing.

Last year, the vacancy rate on apartments with rents under $1,650 dipped below 1%.

Demand outpaces supply

As the nation’s most populated city, New York faces a housing crunch, the likes of which has not existed in decades.

Just two years ago, New York’s vacancy rate hovered at 4.5%, closer to a healthy rate between 5% and 8%. Anything lower constitutes a “housing emergency.”

Worse, the development pipeline doesn't look any better. Multifamily construction in the city has all but reached a standstill due to the economy’s tight lending environment.

Additionally, New York has slashed the number of building permits per resident that it allows in the past decade, lagging behind other major cities, including Boston, Austin, and San Francisco.

As a result, housing has not sufficiently kept pace with the citys job growth rate, resulting in too few workers to satisfy labor market demand in the region, according to McKinsey.

New York Mayor Eric Adams is well aware of the issue, stating last month: “The data is clear: The demand to live in our city is far outpacing our ability to build housing. New Yorkers need our help, and they need it now.”

So far, his calls for action appear to be falling on deaf ears.

Affordable housing fine print

The number of New York households living below the poverty line has been rising, growing from 1.5 million in 2021 to 2 million in 2022, catapulting the city’s poverty rate to 23%, more than twice the national average.

Rent stabilization is one way to keep families from losing their homes, with a promise of affordable housing and protection against big rent increases.

And while affordable housing tenants have entitlements, so too do landlords, including the right to generate enough profit to cover property maintenance costs. However, New York City landlords appear to have found a loophole.

Landlords contend that the vacant rent-stabilized units aren’t rentable because of the poor condition in which they were left by long-term tenants who have since left.

These units, landlords say, require expensive overhauls that erode profitability and aren’t worthwhile in the long run.

Belkin Burden Goldman attorney Sherwin Belkin, who represents landlords, points to a 2019 regulation that he says has “made it impossible to bring those apartments back to market.

“They generally need lots of work to bring them up to building standard, reliability, and the 2019 law provides that no matter how much an owner puts into an apartment, the maximum return is $83 [a month], and only for 15 years,” he said.

Transparency around affordable housing is a pervasive issue, extending beyond just the availability of units. Some New Yorkers are taking matters into their own hands, including those who have managed to score rent-stabilized apartments.

After doing some digging, fashion influencer Carla Badami learned her landlord had overcharged her by thousands of dollars for a rent-stabilized unit in New York. When Badami confronted her landlord about the discrepancy, she received a check for $6,000.

Badami turned to TikTok to share her experience, and with millions of views her video has gone viral, clearly striking a chord with other renters.

Her advice? Renters should request a rental history from the Department of Homes and Community Renewal to determine what the landlord reports to the state versus what they charge tenants.

As can clearly be seen, New York’s tenant/landlord battle continues to rage on.