New York City Free Market Multifamily: Pocket Of Strength Amid Regulations, Lack Of Housing

Over-regulation and the systemic lack of new housing in New York City have created an opportunity for investors in free-market multifamily assets. In this article, we review emerging investment trends, underlying fundamentals and drivers. We also have some recommendations for smaller investors.

Investor’s Shift: Regulation Effect #1

Market rate apartments, which make up 45% of the City’s 2.27 million rental units, consistently account for the majority of sales in the multifamily market. Our research shows that of the $2.11 billion multifamily sales recorded in Q1 2023 in New York City, 78% of the dollar volume was for buildings with predominantly market rate units, signaling continued investor confidence in free market multifamily. In contrast, regulated rent stabilized assets, which make up 44% of NYC’s rental units, accounted for only 14% of the dollar volume in the first quarter.