Recently, I listed a mixed-use building for sale in Bushwick — five apartments and one commercial space.
In New York City, residential buildings with six units or fewer usually don’t fall under rent stabilization. These properties tend to be highly sought after, especially since the Housing Stability & Tenant Protection Act of 2019 significantly limited rent increases in stabilized buildings.
Because the Bushwick property I listed was fully deregulated, it attracted a lot of attention from investors looking for a building with upside potential. The apartments were slightly below market rent, which meant that — over time — the new owner could see higher returns if tenants turned over.
But during the sale, I kept hearing a new concern from buyers:
“What about the new Good Cause Eviction law?”
⚖️ What Is Good Cause Eviction in NYC?
Good Cause Eviction, which took effect in April 2024, was created to protect tenants from unreasonable rent increases and lease terminations.
Under the law, landlords generally can’t raise rents more than 5% plus inflation (up to a 10% cap) per year, and they must provide a valid reason to end a tenancy.
The law applies mostly to landlords who own more than 10 residential units, though there are exceptions. (You can read the full details here).
For many property owners, this means reduced flexibility to raise rents in line with expenses like property taxes and insurance.
🏙️ How Good Cause Eviction Affected My Bushwick Listing
During my Bushwick sale, several buyers said the law would affect their offers. They understood that while the building was market-rate, rent increases might be limited under Good Cause depending on future ownership structures.
That uncertainty directly impacts how investors value multifamily buildings — even those without stabilized units.
We’ve seen this before. After the 2019 rent stabilization changes, buildings with all rent-stabilized apartments saw their market values drop around 30%.
It’s possible Good Cause Eviction will have a similar chilling effect on free-market building sales over time.
📉 Why Rent Growth Has Slowed in 2024
From 2020 to 2023, New York’s rental market was on a rollercoaster.
- 2020: The pandemic sent rents crashing.
- 2021–2022: Renters flooded back, sending prices to record highs.
- 2023–2024: The market began cooling again.
Today, rents are softening across Brooklyn and Manhattan — particularly for higher-priced units. As a result, even with strong marketing, many apartments are sitting longer than usual.
I’ve experienced this firsthand:
Recently, I had a Manhattan apartment listed for months. When I suggested lowering the rent, the landlord declined, saying:
“If I drop the price too low, I’ll never be able to raise it again because of Good Cause Eviction.”
That apartment still hasn’t rented — and the landlord has lost multiple months of rent.
💡 The Takeaway for Brooklyn Landlords and Investors
The Brooklyn multifamily market is adjusting again.
- Rent-stabilized building values dropped after 2019.
- Now, Good Cause Eviction is changing how investors look at free-market assets.
If you’re planning to sell or buy a multifamily building in Brooklyn, it’s crucial to understand how this law affects both rental income potential and long-term property value.
Need guidance on how Good Cause Eviction might impact your property? Contact me — I’ve represented buyers and sellers across Brooklyn through every major shift in the NYC rental landscape.
If you’d like more clarity about NYC’s Good Cause Eviction – here’s a link to the bill.
Are you a property owner that wants to sell their investment property, condo or needs to rent an apartment or retail space in New York City? Call or text me: Sam Moritz, licensed real estate agent, 917-727-4309.
Do you know a property owner that might need real estate help? Refer me! I provide great and professional real estate services across all five boroughs.
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