New York City apartment sales dropped dramatically in 2019 after a new renting law was enacted
- Apartment sales in New York City fell 40% by dollar value in 2019 compared to the year prior, according to a report by Ariel Property Advisors.
- There were 290 multifamily transactions in 2019, the first time the metric fell below 300 since 2010.
- The drop comes after a new law in 2019 altered landlords' ability to raise rental prices and changed programs that allowed landlords to charge a portion of the costs for building-wide and individual apartment improvements.
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Sales of apartment buildings in New York City dropped dramatically in 2019 compared to the year prior, according to a report by Ariel Property Advisors. The decline reflected the impact of a new renting law that irked landlords but pleased many renters.
Multifamily building sales by dollar volume fell by 40% from 2018 to 2019, the report said, the metric's lowest since 2011. Transaction volume fell by 36% and building volume dropped by 47% in the same time span.
There were 290 transactions of multifamily buildings in 2019, the first time transaction volume fell under 300 since 2010.
In June, a law regulating renting in New York City was enacted that limits landlords' abilities to increase rent prices when units become vacant, and changed programs that allow landlords to charge renters part of the costs for improvements on buildings and individual units.
Advocates of affordable housing and renters' protections were supportive of the changes, but the industry warned that the changes could end up hurting renters by disincentivizing renovations.
Shimon Shkury, president of Ariel, told Bloomberg that the changes to building-wide and individual unit improvement programs have "completely shifted investment interest in rent-stabilized buildings."
The new law sent "shockwaves across the city," the report said. But as the new reality sets in, Ariel expects transactions to "pick up with an influx of new buyers and capital."