The real estate industry has criticized Mayor Zohran Mamdani’s proposal to freeze rents on rent-stabilized apartments as a reckless idea that could bankrupt landlords and stunt New York City’s economy.

A new independent analysis, though, is offering a less ominous conclusion.

The analysis, released on Wednesday by the debt-ratings firm Moody’s, found that even a five-year freeze would place only a small share of landlords — 6 percent — at risk of defaulting on their mortgages.

This is in part because a vast majority of landlords could still raise rents on market-rate units in the same buildings or elsewhere in their portfolios, lightening the financial burden.

“We’re talking, incrementally, something very small,” said Darrell Wheeler, the head of commercial mortgage-backed securities research at Moody’s and the lead author of the analysis.

Still, he cautioned that there would be “some economic pain for some of these landlords” if a rent freeze took effect, particularly if those landlords exclusively owned stabilized units.

There are nearly 1 million rent-stabilized apartments in New York City. The New York Apartment Association, a landlord advocacy group, argued that the Moody’s analysis was limited because it covered only a small subset of newer apartment buildings that are part of large portfolios, including some that get city tax breaks.

The group argued that the report overlooked the challenges facing older and smaller buildings in the boroughs outside Manhattan that often do not get any city help.

“If a freeze moves the needle on the strongest players in our market, just imagine what it does to the most vulnerable buildings,” said Kenny Burgos, the chief executive of the association. “This is a warning, not reassurance.”

The report adds to the intensifying debate over the proposed rent freeze. The Rent Guidelines Board, the independent panel that decides whether to allow rents to rise in stabilized apartments, left the door open to a freeze during a preliminary vote in May. It will cast a final vote on the matter at the end of this month.

The freeze, if approved by the panel, would become one of the strictest rent caps in the nation, affecting more units than the total number of apartments in San Francisco and Miami combined. It would also enable Mr. Mamdani to deliver on a key campaign promise during his first few months in office.

City Hall had no comment on the Moody’s analysis on Wednesday.

Landlords have said freezing rents would make it even harder to deal with rising property taxes, insurance premiums and other costs, leading to worse conditions for tenants.

Many landlords have said they are keeping units vacant because it would cost too much to renovate and repair them.

In response, Mr. Mamdani has said the city could help landlords by subsidizing insurance costs, or allowing landlords in financial distress to raise rents on vacant apartments that are subject to other affordability requirements because of existing agreements with the city.



NYTimes: N.Y.C. Rent Freeze Wouldn’t Spell Doom for Most Landlords, Report Says