Housing policy is often framed as a battle between landlords and tenants, with policymakers positioning themselves as protectors of renters, particularly low-income families. Nowhere is this more evident than in New York, where tenant rights groups have championed aggressive rent stabilization and eviction control laws with great zeal.[1] However, a closer examination of these laws, particularly the Housing Stability and Tenant Protection Act of 2019 (HSTPA), along with New York’s Good Cause Eviction law, reveals a sobering reality: Rather than helping the most vulnerable, these policies exacerbate housing scarcity, push out small landlords, and ultimately make it harder for low-income renters to find and maintain stable housing.

Economists have long warned that rent control distorts housing markets by disincentivizing investment and reducing the supply of affordable units. As one study noted, rent control laws have been shown to reduce a city’s housing supply by double-digit percentages.[2] In a city already grappling with a housing shortage, these policies have made matters worse by discouraging new development and leading landlords to take units off the market altogether.

The HSTPA dramatically altered New York’s rental market, severely restricting rent increases and making it nearly impossible for landlords to reclaim or repurpose their own properties.[3] While its provisions were designed to protect tenants from displacement, its long-term consequences have been detrimental, particularly for the poor.

The effects of this policy have been particularly harmful for low-income and minority communities, who are disproportionately affected by rising housing costs and declining availability. The rigid regulations have made it nearly impossible for landlords to justify investing in property improvements, leading to deterioration in living conditions.[4] As buildings fall into disrepair, tenants—many of whom are already struggling—find themselves in increasingly unsafe and unhealthy housing environments.

One of the most ironic aspects of rent stabilization laws is that they disproportionately benefit higher-income tenants at the expense of those most in need.[5] Unlike means-tested programs such as Section 8 housing vouchers, rent control policies apply indiscriminately to all tenants in rent-stabilized units, regardless of income level. This has led to the absurd situation where wealthy renters—who could afford market-rate housing—are able to lock in artificially low rents while poorer tenants remain on yearslong waiting lists for affordable units.[6]

A stark example is the case of Manhattan’s Upper West Side, where longtime renters with stabilized leases pay a fraction of market rates while low-income families struggle to find housing.[7] This dynamic exacerbates inequality rather than alleviating it. By freezing units in place and creating artificial scarcity, rent control ensures that those who are already housed—often wealthier and more politically connected—are the ones who benefit most, while newcomers and lower-income individuals are left out.

Another devastating effect of these policies is their impact on small landlords, many of whom own only a few units and rely on rental income for their own financial security.[8] While large corporate landlords may have the financial resources to absorb losses, small landlords—who own about 28% of rental units in New York City—are far less equipped to deal with rent freezes and restrictions on their ability to reclaim their properties.[9]

Many of these small landlords are themselves members of working-class communities. A significant portion of New York’s rental properties are owned by immigrant families, retirees, and first-time homeowners who rent out units as their primary source of income.[10] The HSTPA effectively prevents these small landlords from raising rents in line with inflation or even evicting tenants who do not pay rent.[11]

The result? Mass sell-offs and the withdrawal of rental units from the market.[12] Many small landlords, unable to sustain losses, sell their properties to larger investment firms or simply leave units vacant to avoid the legal quagmire of renting under such restrictive laws. This reduces the supply of affordable housing even further, once again hurting the very people these laws were intended to protect.[13]

The Good Cause Eviction law, another well-intentioned but deeply flawed policy, further compounds these issues by setting a soft cap on rent increases, limiting the ability of landlords to raise rents beyond inflation plus 5 percent annually.[14] On its surface, this seems like a reasonable measure to prevent price gouging. However, even a basic understanding of economics is enough to recognize that this policy is ill-conceived.

First, landlords—fearing they may never be able to increase rents beyond inflation—are now incentivized to raise rents preemptively to the maximum the law allows.[15] This phenomenon, known as anchoring, has been observed in various markets, including the tipping habits of taxi passengers when digital payment systems introduced preset tipping percentages.[16] The result? Many landlords who might have previously only raised rents by 2% to 3% annually are now raising them by the full 8.79% cap, worsening affordability for renters.[17]

Second, the law effectively eliminates flexibility in lease negotiations, making landlords far less willing to rent to lower-income tenants who may be considered riskier.[18] Before the Good Cause Eviction law, landlords were incentivized to work with tenants, offering flexible payment arrangements or even lowering rents in tough economic times. Now, with their hands tied, landlords are more likely to be selective about whom they rent to, disproportionately harming lower-income renters and those with poor credit.[19]

New York’s rent laws are a textbook case of well-intentioned policy gone wrong. Instead of making housing more affordable and protecting the vulnerable, these laws have created a rigid, inefficient market that benefits entrenched tenants at the expense of newcomers, low-income families, and small landlords.

If policymakers truly wish to address New York’s housing crisis, they must acknowledge the failures of the current system and pursue reforms that encourage housing development rather than suppressing it. Some possible solutions include:

1. Means-Tested Rent Assistance – Instead of blanket rent stabilization, rental subsidies should be targeted at those who actually need them.
2. Incentives for New Housing Construction – Loosening zoning laws and providing tax incentives for affordable housing developments could increase supply and drive down prices.
3. Reforming Good Cause Eviction – Instead of rigid price caps, a more flexible system that allows for fair rent adjustments while preventing true price gouging would better serve landlords and tenants.
4. Strengthening the Rights of Small Landlords – Policies should be tailored to protect mom-and-pop landlords, ensuring they are not forced out of the market.

New York’s current approach has failed. If the goal is to ensure affordable, high-quality housing for all residents, it’s time to replace these misguided rent laws with policies that actually work.

[1] Samuel Stein, Tenants Won This Round, Jacobin (June 18, 2019), https://jacobin.com/2019/06/new-york-housing-tenants-universal-rent-control.

[2] George F. Will, New York’s Rent Laws Are a Gross Violation of Property Rights, Wash. Post (Sept. 22, 2023), https://www.washingtonpost.com/opinions/2023/09/22/new-york-rent-laws-property-rights/.

[3] Bobby Miller, New York’s Rent Laws Hurt Property Owners and Renters Alike, Nat’l Rev. (Mar. 1, 2023), https://www.nationalreview.com/2023/03/new-yorks-rent-laws-hurt-property-owners-and-renters-alike/.

[4] Bobby Miller, Signature Bank’s New York Real-Estate Problem, Nat’l Rev. (Mar. 28, 2023), https://www.nationalreview.com/corner/signature-banks-new-york-real-estate-problem/.

[5] Erik Engquist, New York’s First Good Cause Eviction Rent Increase, The Real Deal (Feb. 5, 2025), https://therealdeal.com/new-york/2025/02/05/new-yorks-first-good-cause-eviction-rent-increase/.

[6] Id.

[7] Stein, supra note 1.

[8] Id.

[9] Will, supra note 2.

[10] Miller, supra note 4.

[11] Stein, supra note 1.

[12] Will, supra note 2.

[13] See, e.g., Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021).

[14] Miller, supra note 4.

[15] Id.

[16] Id.

[17] Id.

[18] Stein, supra note 1.

[19] Miller, supra note 4.