The most important number in the city's rising rent-stabilized vacancy rate is not 5.6%. It is the $26,000 in the checking account of a Washington Heights landlord who manages two fully stabilized buildings with no mortgages.
That landlord, Jose Tur, told The City Reporter that seven of his 45 apartments have been vacant for two to three years. He is not holding units off the market for a higher rent. He cannot afford to renovate them. His tax bill is about to consume most of his cash. He has no reserves.
This is not a housing policy story. It is a capital story. The rising vacancy rate among rent-stabilized apartments is a signal that the economics of owning older, non-Macomb stabilized buildings have broken for a growing number of owners. The vacancy is not a choice. It is a symptom of a capital stack that no longer works.
The data, obtained by The City Reporter through a Freedom of Information Law request, shows the citywide vacancy rate for rent-stabilized units rose to 5.6% in 2025, up from 3.7% in 2016. The rate spiked to 7% in 2021 during the pandemic exodus and has not fully receded. Every borough except Manhattan saw an increase over the decade.
The state's Division of Homes and Community Renewal does not track why units are vacant. But the market context supplies the answer: rising operating costs, stagnant rent growth under rent stabilization, and a debt market that has no appetite for buildings with thin cash flow and deferred maintenance.
For owners like Tur, the math is simple and brutal. Without the ability to raise rents to cover capital expenditures, and without access to cheap debt or equity, the only option is to let units sit empty. Renovating a vacant unit requires cash. Cash requires either retained earnings, a loan, or an equity infusion. None of those are available when the building's net operating income is barely covering taxes and operating expenses.
The vacancy is not a negotiating tactic. It is a capital constraint made visible.
This matters for the broader multifamily market because it reveals a growing bifurcation within the city's rental housing stock. The buildings that can attract institutional capital are the ones with market-rate upside, strong rent rolls, and sponsors with balance sheet depth. The buildings that cannot are the ones with heavy rent stabilization, older physical plants, and owners who are effectively trapped.
The trapped owners cannot sell because the basis is too high relative to what a buyer would pay given the income constraint. They cannot refinance because lenders will not underwrite a loan against a building with rising vacancy and no path to rent growth. They cannot inject equity because the return profile does not compete with other opportunities.
The result is a slow-motion capital freeze in a segment of the market that houses hundreds of thousands of tenants. The vacancy rate is the visible output of that freeze.
Who benefits? Tenants in buildings that are still well-capitalized may see less competition for units. But tenants in buildings owned by capital-constrained landlords face deteriorating conditions and longer wait times for repairs. The city's housing court backlog, as Mitchell of UNHP noted, is also contributing to vacancy as eviction cases finally resolve after the moratorium.
Who is exposed? Every owner of an older, rent-stabilized building without a strong capital partner. Every lender with exposure to that segment. And every tenant who depends on those buildings for affordable housing.
What should the market watch next? The vacancy rate itself is a lagging indicator. The leading indicator is the number of buildings being transferred to new ownership through distress or sale. If the vacancy rate continues to rise, it will eventually force a wave of ownership changes as the current owners run out of time and money. The question is whether the next owners will have the capital to renovate and re-lease, or whether the buildings will simply change hands and continue to deteriorate.
The 5.6% vacancy rate is not a policy failure. It is a capital market signal that a significant portion of the city's rent-stabilized stock is no longer economically viable under current conditions. The market is not rewarding ownership of these buildings. It is punishing it.