New York City, NY — landlord and rental rules

Rent stabilisation attaches to buildings with six or more units built before 1974. A genuine 2–4 unit building is free-market.

Six units is the threshold; below it, stabilisation does not attach on unit count alone.

This cuts both ways for a small buyer: the post-HSTPA collapse in stabilised-building values does not apply to a 2–4 unit, so comparisons drawn from stabilised-stock pricing are the wrong comparison.

Unit counts

6+ units

Construction

Built before 1974

The 2024 Good Cause Eviction law requires good cause to evict or to refuse renewal, but exempts landlords owning 10 or fewer units statewide.

The exemption is counted on the *owner's* total holdings, not the building — and there is active litigation attempting to pierce LLCs to aggregate beneficial ownership.

Municipalities outside New York City opt in, and several have tightened the exemption to 1–4 units, so upstate is harder than the statewide baseline rather than softer.

Unit counts

Up to 10 units

In effect since 2024-04-20.

Housing Court evictions run roughly 6 to 18 months, and holdover proceedings can exceed two years under Right to Counsel.

A non-paying tenant is a year or more of carry, not a quarter of it. Underwrite vacancy and legal cost against that timeline, not against a statutory notice period.

Typical duration

6–18 months

Since 11 June 2025 the FARE Act makes the party who hired the broker pay the fee, which in practice moves a month's rent per turnover onto the landlord.

Budget roughly one month's rent per turnover as a recurring operating cost rather than treating leasing as free.

Paid by

the party who hired the broker — in practice, the landlord

In effect since 2025-06-11.

Buildings of one to three units are Class 1 and assessed at 6% of market value; four units and above are Class 2a and assessed at 45%. The fourth unit multiplies the assessment ratio by more than seven.

Class 1 ends at three units.

For a small investor the practical rule is blunt: buy a 3-family, not a 4-family, in New York City — the extra unit's rent rarely covers what the reclassification costs.

Unit counts

Up to 3 units

Class1 assessment ratio

6% of market value (1–3 units)

Class2a assessment ratio

45% of market value (4–10 units)