Every spring, New York City goes through its Rent Guidelines Board (RGB) process, which sets rent adjustments for one and two-year stabilized leases. It’s a deliberation with a significant impact on tenants, but it also immediately affects the owners of these stabilized apartments and buildings. Just as tenant experiences are varied, so are those of owners. While owners share commonalities, there are distinct differences between us.

Members of Small Property Owners of New York (SPONY) are disproportionately affected by this annual process. SPONY represents owners and operators of smaller buildings, most of which are entirely rent-stabilized and small-scale, typically with 6 to 10 units. Smaller owners are often women, people of color and New Americans, reflecting the diversity of our neighborhoods, boroughs and city. 

Buildings owned by smaller owners make up a significant portion of the city’s rental market, with approximately 22,500 buildings of this size comprising nearly 160,000 units. However, Rent Guidelines Board deliberations overlook these smaller buildings, as their data excludes buildings with fewer than 11 apartments. This omission is critical because it fails to capture a key component of the market that faces significant challenges in every New York City neighborhood. How can a system that determines allowable rent increases ignore data from these crucial segments of the housing market? Smaller owners are already disadvantaged in public affairs, advocacy and lobbying because our time is more stretched and stressed, our margins thinner and our presence more spread out compared to larger owners. 

When Rent Guidelines Board reports are released, elected officials and tenant activists often advocate for measures like a “rent freeze” or, more recently, a “rent rollback.” It’s a spectacle stitched into our civic fabric, which in recent years has become a tapestry of dysfunction, especially for smaller owners. 

At public meetings, tenants and owners alike share testimony about their financial struggles. Unfortunately, this process is ineffective and does little to improve housing quality for tenants in our buildings. The board has consistently underfunded this aging housing stock. Since 2020, RGB reports indicate that expenses have increased by nearly 20%, but the permitted rent increases have only allowed for a 7% raise. Costs aren’t voted on — they must be paid continuously, while income (rent) is subject to disruptions like council members storming the stage in 2023, tenant representatives on the Board walking out (2024) and professional activists protesting annually. 

Every increased cost and every dollar lost in missed income has a disproportionately severe impact on smaller buildings. Unlike larger properties, smaller buildings lack economies of scale, making it difficult to absorb losses and costs. The entire affordable housing economy has faced a series of immense challenges, including a three-year pandemic, the “cancel rent” movement, lengthy eviction moratoriums and ever-growing compliance and regulatory obligations. But it’s smaller owners who have been feeling the worst impact, with the smallest voice at the public policy table and fewer resources.

Moreover, smaller buildings are particularly affected by the slowdown in Housing Court proceedings, which often serve as a crucial avenue for tenants to access necessary assistance. Additionally, these buildings grapple with skyrocketing insurance costs, escalating energy prices, higher property taxes and missed rent payments. A recent survey of SPONY members underscores the alarming rate at which expenses have increased since 2020, with insurance costs rising over 60%, property taxes nearly 20% and utilities climbing over 40%.

The irony lies in the fact that while small property owners like us are not considered in Rent Guideline Board data, we are the ones physically closest to our tenants. We are on the ground, at the edge, often teetering on the brink of insolvency. Our hardship is magnified, and despite providing “affordable housing,” our members receive no assistance from the city, state or federal governments. Each small building owner forced to sell represents not just a lost small business but also a lost family legacy. 

Consider the buildings nestled between avenues in Upper Manhattan, the West Village, Lower East Side, Park Slope, Bay Ridge, Prospect Heights, Crown Heights, Washington Heights and Harlem. Picture the apartments above struggling retail spaces along 9th and 10th Avenues in Manhattan, on Avenue U in Brooklyn, and Jamaica, Queens. Envision the smaller 6-, 7- and 8-unit buildings scattered amidst larger structures along West 116th in Manhattan, as well as in neighborhoods like Bushwick, Ridgewood, Dyker Heights, Sunnyside and Maspeth. These are the places where small property owners are facing immense challenges, striving to maintain affordable housing amidst a myriad of economic pressures.

When small property owners can no longer hold on, who will step in to purchase our buildings? It’s likely to be faceless corporate and institutional owners. This shift in ownership can have significant implications for the fabric of our neighborhoods. Unlike small property owners who often have deep ties to the community and a vested interest in maintaining affordable housing, corporate and institutional owners may prioritize profits over the well-being of tenants. This transition threatens to erode the sense of community and affordability that small buildings often provide.

Diverse smaller owners in every neighborhood in every borough of New York City need help. Disregarding us will damage the city, the larger affordable housing economy and, ultimately, tenants.

Ann Korchak is a New York City rental property owner and Board President of the nonprofit Small Property Owners of New York.