New York: 57,000 apartments sit vacant under rent control

New York accumulates 57,000 vacant apartments because of price controls

What happens when the law makes it impossible to make money on an apartment and the owner decides not to rent it out? In New York the answer has a number: more than 57,000 vacant apartments subject to the city's rent stabilization rules. This is not a laboratory experiment or a talk-show prophecy. It is the result of regulations that limit how much of a renovation's cost an owner can recover and that, according to critics, turn real estate into a bad business. The debate over price controls is back in the spotlight with Mamdani and his housing agenda for the city.

The renovation cap that freezes the market

The key lies in a limit that sounds technical but changes everything: the owner can only pass on a minimal share of renovation costs to the rent. In New York's case, there has been talk of a cap of $50,000 recoverable over 15 years for apartments that have long been vacant. If fixing up an old building costs $80,000 or $100,000, the math does not work. And when the math does not work, the apartment stays shut. It is not ideology: it is arithmetic.

Some argue that these vacancies predate the 2019 state law, the Housing Stability and Tenant Protection Act, which had already eliminated almost every way to raise the rent after a renovation. In 2024 the allowance was raised to $30,000, and then to $50,000 for long-term vacant units. The result is the same: tens of thousands of frozen units. The question is not whether price controls have effects, but who pays for them.

What about taxing vacant homes?

The vacant housing tax has already been tried. Vancouver introduced one in 2017 and British Columbia in 2018; the number of vacant apartments fell clearly. Paris has taxed vacant homes since the late 1990s. In Spain, the 2023 Housing Law allows municipalities to raise the IBI property tax by up to 150% on apartments left empty for more than two years, though few apply it. On paper, it sounds like a solution. In practice, the problem is different: if an apartment is vacant because renovating it costs more than can be recovered, the tax only adds one more reason to sell. And whoever buys it faces the same limit.

The speculation argument and the liberal response

At the heart of the debate lies the accusation of speculation. Some argue that housing is for people to live in, not to speculate with, and that tough tax measures are needed against those who keep a unit off the market. The response from the other side is that the market does not regulate itself, but punishing owners does not create housing: it removes it. The same script plays out in Spain: rent caps, public subsidies, and a housing stock that never quite reaches the market. Meanwhile, the numbers remain: 57,000 vacant apartments in a city with waiting lists to rent.

The irony is that the rule was born to protect tenants. The result, according to the figures cited by critics, is a housing stock rotting away while demand tightens. Remad, remeros.