Since Mayor Zohran Mamdani’s pledge to freeze rents gained steam on the campaign trail, talk has swirled about the sweeping cap on regulated apartments triggering a legal response. Now with the Rent Guidelines Board paving the way for the policy, potential legal challenges are also becoming closer to reality.
So far, real estate groups are keeping any specifics hush-hush.
“We have obviously discussed potential legal avenues and how much that would cost,” said Jay Martin, executive vice president at the New York Apartment Association, which represents rent-stabilized landlords. “We’re still exploring all legal options.”
A legal challenge could delay a rent freeze or, if successful, stop it completely. A successful challenge by NYAA, or a broader group like the Real Estate Board of New York, could also change the structure of the Rent Guidelines Board, which has been criticized by both landlords and tenants.
The real estate industry has complained that the board is no longer acting as an independent body. The city survived a legal challenge on similar lines before, but growing distress in the rent-stabilized sector could tip the scales in landlords’ favor.
“If the board is simply going to take directions from the mayor, then the whole process becomes a sham,” said Scott Mollen, a real estate attorney with Herrick Feinstein and a former chairperson of the rent board.
A question of independence
The board’s political independence has been challenged before. In 2016, the Rent Stabilization Association, a precursor to the NYAA, sued after two years of rent freezes, saying the board had been persuaded by then-Mayor Bill de Blasio’s political agenda and shouldn’t consider tenant finances. De Blasio had said he would appoint pro-tenant members of the board and took credit for the freezes. But a judge ultimately dismissed the suit in 2017.
In 2025, after the board signaled support for a hike of up to 7.75 percent on two-year leases, Eric Adams weighed in: “I must be clear that an increase as much as 7.75 percent is far too unreasonable of a burden for tenants,” he said in a statement. The final number came in at 4.5 percent.
Martin, of NYAA, said any potential legal challenge would instead likely target the structure of the board, and how it’s “set up to fail” with the responsibility of enacting a one-size-fits-all rent increase.
“We’re looking for long-term changes, not specifically anything to do with what’s happening today, tomorrow or in the very short term,” he said. “There’s pretty good evidence out there that the way this process has gone on for quite some time is not really fair to either side.”
When asked if NYAA was concerned about the bad publicity that comes from a losing case, Martin gave a frank “no.”
“What we’re worried about is victory,” he said.
Ongoing distress in rent-stabilized housing may improve the chances of any lawsuit succeeding, according to Mollen.
“If they freeze rents and property owners continue to lose properties, I think the industry will feel that the Rent Guidelines Board has increased the likelihood that courts may finally conclude that the rent-stabilization system has gone too far,” he said.
The mayor appoints the members of the board, who serve for fixed terms. Two of the members are meant to represent tenants and two are meant to represent landlords, with the other five representing the public. Mamdani pledged on the campaign trail to appoint members who would freeze rents in regulated units, which make up half of the city’s rentals.
The mayor, perhaps sensing legal risk, has lately emphasized the board’s independence in public comments.
He referred to the board as “an independent body that considers the evidence when they make their decision,” in a video about the process posted to X, and only obliquely referenced his rent freeze pledge.
“As the mayor has made very clear: the Rent Guidelines Board is an independent body, and he is confident that they will review all of the appropriate information and make an independent decision,” Matt Rauschenbach, a spokesperson for the mayor, said in a statement to The Real Deal.
Mamdani has also been pushing for tenants to testify at the board’s public meetings. In late April, he launched an initiative to canvas five city neighborhoods to encourage residents to testify. Those neighborhoods were Flatbush, in Brooklyn; Jackson Heights, in Queens; Concourse, in the Bronx; and Northern Washington Heights and the East Village in Manhattan. A release from City Hall specified that volunteers would not be pushing a particular outcome.
The Real Estate Board of New York, which unsuccessfully sued last year to stop the FARE Act, which shifted broker fees from renters to landlords, has kept mum about any future lawsuits.
But the administration should be kept out of the board process, according to REBNY.
“The Rent Guidelines Board has a statutory obligation to make its decisions based on the data,” said Basha Gerhards, executive vice president of policy at REBNY. “The outcome should not be predetermined.”
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