Top things to know: investing in NYC multifamily in 2022

A round up of top things/events/policies that have shaped the year so far and what to expect next

It has been an eventful year in NY multifamily sales. The last nine months have showcased evolving rent regulations, reactions to a post-covid environment, and a new mayor intent on proving he’s got swagger and can support property owners. Below is a round-up of important topics that I think multifamily owners in NYC should know about, and that prospective NYC investors should consider before investing in the market. For each topic, the links will explain what the topic is and why it is important.

1-     Important policy shifts

In our view, the below items will effect the profits and the governance of the multifamily sector more than any other driver this year.

• Good Cause Eviction

• DHCR’s move to tighten rent controls

• 421 A tax abatement expiry

2-     Market updates

Key data points that provide insight into the NYC market.

• Apartment rents in Manhattan and Brooklyn reached all-time highs

• Multifamily investors in 1H 2022 bought $9Bn, compared to $3.4Bn in 2019

3-     Key multifamily projects

The responses of elected officials toward these projects are good thermometers for the climate for new developments in New York.

• One45 – 917 units. Failed

• Hallet’s Point - ~1,400. Approved

• Innovation Qns - ~2,700.  Initial approval

4-     Mayor’s Adam’s role in NYC’s multifamily real estate

The below represent the tangible acts the mayor has taken to promote multifamily.

• City of Yes proposal

• Opposes city council member

5-     Post Covid-19 response

Some important areas of overlap between Covid-19 and the administration of multifamily housing in New York: tenants, owners of property, lenders, legal.

• Eviction moratorium expires

• Evictions in court mount & backlog ensues

• Continued ERAP funding for tenants

6-     What’s next?

If past behavior is and indicator of future performance, these are a few of the things we ought to expect coming down the pike in 2023.

• Clarity on local law 97

• Rent growth expected to slow

• Good Cause Eviction & 421A tax abatement discussions to re-emerge

For deeper dives on each topic summarized, click here for the archives of my newsletter, or reach out to me directly at 212 658 1471.