With reduced lending options and sky-high operational costs, the rent-stabilized market in the Big Apple is facing a challenging future.
| While most have been focussed on the office category of the Commercial Real Estate Market CRE market, the owners of rent-stabilized apartments in NYC are experiencing a crisis as well. The strain of a restricted rent roll coupled with increased costs has led to rising delinquency rates and foreclosures.
Delinquency rates on loans backed by rent-stabilized buildings have risen, with rates reaching 4% as of October, up from 2.9% at the start of the year. In contrast, buildings built after 1974, which are more likely to contain market-rate apartments, had a delinquency rate of just 0.02%. |
Lenders are becoming less patient with owners on mortgage payments adding more pressure to a market where roughly 10–15% of loans on NYC’s rent-stabilized multifamily units are expected to come due soon, potentially deepening the distress in the market.
Distressed sales, lower property values, and the potential for buildings to fall into disrepair pose a threat to both landlords and tenants. Finding solutions to ensure liveable conditions and stability in the housing market is crucial to mitigate the impending crisis for rent-stabilized apartments in NYC.
Image Credit The Real Deal
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