A group of landlords on Wednesday sued to block New York Mayor Zohran Mamdani’s historic rent freeze as they face the self-declared socialist’s barrage of drastic changes to the city’s rental sector that will formally recognize tenant unions and could ban credit checks on prospective renters.
The city launched its tenant-friendly rental overhaul last month with a rent freeze on the city’s 1 million stabilized apartments.
The unprecedented move fulfilled one of Mr. Mamdani’s top campaign promises, but a group of landlords is already asking the New York Supreme Court to throw it out.
They argue in court documents reviewed by The Washington Times that Mr. Mamdani moved to “stack the deck” by hand-picking most members of the Rent Guidelines Board, which ensured it would vote to block rent increases from Oct. 1 through Sept. 30, 2027.
“To do the mayor’s bidding, this Board then made a mockery of its statutory mandate, resorting to multiple manipulations of its own data to try to justify this irrational result,” the landlords argue. “All this comes amid unchecked inflation and rising costs that struggling landlords will have to bear to survive.”
Mr. Mamdani’s office denied the claim made in the lawsuit.
Landlords, meanwhile, are bracing for an onslaught of additional changes Mr. Mamdani plans to impose on the city’s rental sector.
Last week, he unveiled 23 new “policy actions,” proposed in response to “Rental Ripoff Hearings” held in the city between February and April that examined “illegal, unfair, abusive, deceptive, or unconscionable landlord practices.”
The new rules, outlined in a “Rental Ripoff Hearing Report,” include the city’s formal recognition of tenant unions and plans to draft new rules defining the unions and the role they can play in “stewarding rental housing” for tenants.
Mr. Mamdani said he’ll propose changes to the rental application process and will draft legislation that could ban the use of credit checks.
The mayor said potential changes could limit landlords to requiring either a credit check or proof of income that is 40 times higher than the monthly rent, but not both. Credit checks, now capped at a $20 fee, would have to be paid for by landlords.
“Giving tenants and owners multiple ways to establish prospective ability to pay rent will reduce barriers that renters identified to seeking new housing,” the report said.
The report also outlined plans to crack down on “repeat offender” landlords by subjecting them to additional inspections, enforcement programs and litigation. Tenants would be authorized to use an expanded list of violations that enable the withholding of rent and other changes making it easier for tenants to defend nonpayment of rent in New York City Housing Court.
Manhattan Institute senior fellow Eric Kober called the proposals part of Mr. Mamdani’s “relentless war on landlords,” and said formalizing tenants’ unions could lead to building-wide “rent strikes” that would cripple property owners.
Banning credit checks, he wrote in City Journal, will limit information landlords need to find tenants who can reliably pay the rent, “increasing business risk while shifting more costs to the property owners.”
Critics said landlords banned from checking a prospective tenant’s credit may demand a cosigner or a rental guarantor service, which generally costs a tenant one-month’s rent.
Mr. Mamdani’s rent freeze threatens to further tighten the supply of apartments as the city faces historically high rent. Average monthly rent in Manhattan soared last month to $5,295, an 8% increase over last year that is largely blamed on lack of housing.
Arpit Gupta, who sits on the nine-member Rent Guidelines Board and was the only person to vote against freezing the rent on stabilized apartments, said in a Substack column that banning landlords from imposing the 3%-4.5% rent increase that had been authorized for stabilized apartments will make it impossible for some to afford maintenance and repairs.
“It would hold rents flat while expenses keep growing, and a large share of the stabilized stock has no other way to raise revenue,” Mr. Gupta said.
The five landlords suing to overturn the rent freeze accused the nine-member Rent Guidelines Board, most of them appointed by Mr. Mamdani, of manipulating data to conceal the financial hardship many landlords face if rent increases are prohibited.
The board also ignored its own formula that showed increases of at least 3.4% for one-year leases and 4.8% for two-year leases were needed to keep net operating income steady next year. Instead the board voted for a 0% increase.
“The consequences for landlords in all five boroughs are immediate and severe,” the group argued in the court filing.
Mr. Mamdani, they said, “perverted what is supposed to be an independent regulatory process to deliver on his campaign promise.”
Mr. Mamdani’s spokesperson, Matt Rauschenbach, said the Rent Guidelines Board acted as an independent body.
“We are confident that the Board evaluated all of the relevant data and considered the factors facing both tenants and landlords across New York City,” Mr. Rauschenbach said. “The Law Department is prepared to defend the RGB’s decisions. The Mamdani administration remains committed to the success of the rent stabilization system which has prevented displacement and provided stability to generations of New Yorkers.”
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