June 10, 2026
New York City has one of the most talked-about housing crises in the country. Rents are sky-high, inventory is tight, and everyday New Yorkers are struggling to find a decent place to live.
So here's a number that might stop you in your tracks: roughly 50,000 apartments are sitting completely empty across the five boroughs right now, not because no one wants them, but because the economics of renting them out simply don't work under current law.
These are sometimes called "ghost apartments," and understanding why they exist tells you a lot about the complicated reality of New York's housing market.
A ghost apartment is a rent-stabilized unit that has been taken off the rental market because the landlord cannot afford to rent it out. These are not luxury condos sitting idle while their owners wait for the right buyer. They are often modest studios and one-bedrooms in neighborhoods across Manhattan and the Bronx, vacant not out of greed or neglect, but because the math simply doesn't pencil out.
The problem stems from strict limits on rent increases under laws passed in 2019, which have left an estimated 50,000 apartments vacant across the city. Because the restrictions on what landlords can charge for these apartments often don't even cover the costs of maintaining them, they effectively become ghosts, as if they don't exist at all.
The story really begins with the Housing Stability and Tenant Protection Act (HSTPA), passed by Albany's Democratic majority in 2019. The intent was genuinely good: protect long-term tenants from displacement and prevent landlords from using loopholes to push people out and dramatically raise rents.
But the law had significant unintended consequences. HSTPA eliminated landlords' ability to raise rents after units were vacated, or when they exceeded $2,775 per month. In doing so, it also eliminated the ability to make improvements profitably and reset the stabilized rent to a market rate.
Before 2019, when a rent-stabilized tenant moved out, a landlord could raise the rent to reflect market conditions and recoup renovation costs. That reset mechanism was the financial engine that kept older rent-stabilized housing stock maintained and habitable. Without it, the incentive to invest in those units largely disappeared.
The numbers become very concrete when you look at specific buildings. In a building on East 6th Street in the East Village, one-bedroom units average $3,500 per month on the open market, except two of them that are subject to rent stabilization, which hold rents below $900 per month. Both units have been allowed to fall into disrepair because the cost of restoring them to habitability is greater than what they would generate in rent.
What does it cost to bring one of those apartments back to life? Renovation costs break down roughly as follows: $10,000 for an architect to review plans and obtain a permit, $50,000 for kitchen and bathroom materials and labor, $20,000 for floors and ceilings, $6,000 for appliances, $25,000 in electricians' fees, plus a range of other significant fees. These figures add up to the typical $100,000 to $200,000 costs of renovating a studio apartment in New York City.
And the potential return on that investment? The maximum rent increase allowed through New York's Division of Housing and Community Renewal would bring one of those rents to just $955 per month. Any bank could see that a $100,000 investment would never be paid back at that rental income.
The same story plays out in the outer boroughs. In the Bronx, on Valentine Avenue, vacant apartments face renovation costs of around $60,000, operating costs likely to exceed $1,000 per month, but legal rents capped at $824 and $529, respectively. In lower-income areas, market rents are not high enough to allow fixed building costs to be borne by other market-rate tenants, making the problem even worse.
Even setting aside renovation costs, just keeping a unit running costs real money. As of 2023, operating costs amount to $1,028 per month for a small building in Manhattan, according to the Rent Guidelines Board. Fuel, hot water, and labor costs increase with each additional unit that is rented. Fixed costs like insurance can be shifted from rent-stabilized to market-rate units, but that drives up everyone else's rents in the process.
So in many cases, a landlord renting out a stabilized unit at $529 or $824 per month is not just failing to profit. They are actively losing money every single month, on top of whatever they spent (or didn't spend) on renovations.
There are a few proposed solutions being discussed, each with different tradeoffs.
One approach, favored by the New York Apartment Association, is to restore what's called vacancy decontrol, at least in a limited form. Under this proposal, rents would continue to be subject to the Rent Guidelines Board's maximum increases while a lease is active, but landlords would be allowed to raise rents once units come off the market, reestablishing the economic incentive to renovate.
New York is unusual in this regard. As Kenny Burgos of the New York Apartment Association noted, even Los Angeles gives landlords the ability to reset rents after apartments become vacant.
A more sweeping approach would be to eliminate rent stabilization entirely and replace it with direct housing vouchers for lower-income tenants, allowing the market to set rents while ensuring affordability through targeted subsidies rather than across-the-board price controls. This idea has supporters among housing economists but remains deeply politically contested in New York.
The concern from tenant advocates, of course, is that any loosening of stabilization rules could accelerate displacement of the existing tenants who currently benefit from those protections. That tension sits at the heart of the debate and will not be easy to resolve.
New York's housing crisis is not a simple story of greedy landlords or reckless tenants. It is, in large part, a story of well-intentioned policy that produced consequences nobody fully anticipated. Fifty thousand empty apartments in a city where people are desperate for housing is a problem that deserves serious, honest conversation, not just political talking points.
Sources: The Free Press | City Journal
Disclaimer: This content is intended for informational and educational purposes only and is not intended to be construed as legal, tax, financial, or insurance advice. Every property and tax situation is unique. Please consult a licensed attorney, CPA, or tax professional regarding your specific circumstances before making any decisions related to property improvements, tax assessments, or real estate transactions. Mohammed M. Rahman is a licensed real estate broker in New York. Contact: Mo@ClosedByMo.com.
