The 97% Discount
- Corey Cohen
- Mar 28, 2025
- 2 min read
Picture this: a 29-unit rent-stabilized building in East Harlem, worth millions in 2016, just sold for 97% less. Yup, you read that right. Why? The 2019 Housing Stability and Tenant Protection Act (HSTPA) flipped the script—capped rent hikes, eliminated deregulation, and reduced Landlord cash flow. Rent-stabilized Landlords - different from their free-market counterparts - can’t keep up with 8% tax jumps or soaring insurance costs, so this building turned into a fire sale. It’s a win for tenant affordability—think a two-bedroom for $800 per month in Brooklyn Heights —but a brutal hit for recent buyers who didn't see the new regulations coming.
Where’s the Money Moving?
Currently, investors are dodging rent-stabilized headaches. These buildings were once 43% of multifamily sales dollar volume in a single quarter; now they’re down to 18%. Cash is flowing to free-market plays like Williamsburg condos and Long Island City rentals. Prices in this space? Still climbing, with median one-bedroom pricing at a high of $4,500 per month in Manhattan. The split is real - rent stabilized units lock in affordability but the rest of the market is a pressure cooker.
Roebling Reads
Here’s a snapshot of the latest real estate news we’re tracking this week.
Meow Wolf Brings Immersive Art to South Street Seaport
Meow Wolf, famed for its otherworldly art experiences, has inked a 75,000-square-foot lease at Pier 17, turning NYC’s South Street Seaport into its first East Coast outpost.
BuzzFeed Downsizes to 50 West 23rd St.
BuzzFeed has slashed its office space in half with a new 42,210-square-foot lease at 50 West 23rd Street, mirroring a wave of media companies scaling back in NYC.
NAR Settlement, Real Estate Commissions, and the Shake Up That Wasn’t
The National Association of Realtors’ recent settlement hasn't eliminated the 'buyer agent fee' at all. But some buyers are still going it alone.
What’s Next?
While the 97% off sale is an anomaly it’s also a symptom. Rent stabilization has noble goals (an affordable NYC), but it’s squeezing landlords - many of the mom and pop variety - and spiking free-market rents. Maverick Real Estate Partners says values of rent stabilized apartments are down 34% on average since 2019, and outliers like 312 East 106th Street prove it can get worse. Meanwhile, the price of non-regulated apartments rose 23%.
The polarized political environment has reduced incentives for Landlords to renovate and rent newly vacant apartments, forcing ~26,000 apartments offline. With improvements to regulation, these could be updated to create homes for younger professionals and newcomers while easing pricing pressure on apartments for everybody else.
Thoughts on this? I'm always available for your real estate questions along with updated valuations that track the market.
Best,
Corey Cohen
Founder
The Roebling Group
646.939.7375
@mrcoreycohen
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