Renting a glitzy Manhattan apartment for half the market rate while raking in a six-figure salary is urban legend for most New Yorkers. But it is reality for a small class of renters, thanks to the city's rent-stabilization law.

The best housing deals in New York City happen to go to some of the wealthiest renters in the area, according to The Wall Street Journal's analysis of New York City's 2023 Housing and Vacancy Survey, the most recent figures.

The top 25% of earners living in New York City rent-stabilized apartments pay $1,000 less each month in median rent compared with market-rate units. That amounts to a 33% savings in rent. The top 10% of earners save $1,300, a 36% discount.

Rent-stabilized tenants in the lowest three income quartiles, meanwhile, paid only about $300 less compared with the market rate, saving between 15% and 22%.

The savings bump for wealthy rent-stabilized renters has for years been an eccentricity of New York City's rent-stabilization system, the largest in the country.

Some of this discount gap is the result of market forces. Wealthy renters tend to live in more expensive neighborhoods where market prices are higher. So rent-stabilized housing in these areas tends to be significantly cheaper relative to the market-rate, even while still being pricey for the average renter.

"You do have people paying $5,000, $6,000, or $8,000 for rent-stabilized apartments," said Allia Mohamed, CEO of rental data firm Openigloo.

Another part of this is by design. New York's rent-stabilized system doesn't generally test for income status, so it isn't supposed to weed out wealthy renters.

"I can't imagine trying to do an income certification for like a million units," said Brad Greenburg, executive director of New York University's Furman Center. "Administratively, it feels impossible."

These renters stand to benefit even more from Mayor Zohran Mamdani's rent freeze, which takes effect in October.

The Journal's analysis showed that median rents for Manhattan's rent-stabilized apartments are about half the market rate, while regulated units in the Bronx go for just 12% less. In Queens, rent-stabilized apartments were priced 13% lower and in Brooklyn, the discount was 24%.

Some in the real-estate industry view the affluent class of rent-stabilized renters as a symptom of a broken system. They say that these regulated apartments should go to people who couldn't otherwise afford market prices.

"This shows you the system is malfunctioning," said New York City real-estate attorney Massimo D'Angelo, who represents private landlords. "We need to give these apartments to people who actually need them."

But tenant advocates see little problem with a few pockets of wealthy renters scattered within the expansive rent-stabilized housing stock. For them, this is a signal that the city needs more of these apartments, not fewer.

"This isn't a welfare program. That's not what rent stabilization is. We're not looking out for just the most needy," said Darius Khalil Gordon, executive director for the Metropolitan Council on Housing . "It's made to make sure that people can afford to live in a city that they love."

Rent-stabilized apartments are the holy grail of the housing hunt in New York City. They differ from rent-controlled units, which are regulated based on price caps set by the state. Instead, rent-stabilized properties are governed by the Rent Guidelines Board, an independent city panel that sets the limit for how much landlords can raise rents each year.

The vast majority of rent-stabilized tenants are low-income, and most of these apartments are concentrated in the Bronx and Washington Heights, along with some parts of Queens and Brooklyn.

With one million rent-stabilized units spread across the five boroughs, economists say wealthy renters are bound to benefit, too. In neighborhoods like Midtown East, the average two-bedroom goes for roughly $7,500 a month , a 17% jump from last year, according to data firm Zumper. Those kinds of price hikes have pushed renters to view these regulated apartments as a crucial insurance policy.

Properties are generally rent-stabilized either because they were built before 1974, when the law was officially implemented, or because they receive some level of public financing or tax subsidy. On the campaign trail, Mamdani pledged to build 200,000 more of these highly coveted apartments over the next decade.

Upper-income households occupy about 10% of the total rent-stabilized housing stock, according to an analysis of 2023 data by the Citizens Budget Commission. More than 86,700 of those households earned over $200,000 a year.

Landlords used to be able to convert their rent-stabilized apartments to market-rate if the tenants who lived there made $200,000 for two years in a row. They could also get rent increases if they made certain improvements to their properties after tenants moved out.

Since 1994, landlords removed more than 360,000 apartments from rent-stabilization, according to the city's Rent Guidelines Board.

But the state greatly restricted these practices in 2019. The real-estate industry has been pushing to revive them ever since.

"There are no current annual income certification reviews," said D'Angelo, the real-estate attorney. "That needs to be changed."

Write to Rebecca Picciotto at Rebecca.Picciotto@wsj.com and Neil Mehta at neil.mehta@wsj.com

(END) Dow Jones Newswires

July 27, 2026 05:30 ET (09:30 GMT)

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