On June 25, 2026, the New York City Rent Guidelines Board (RGB) voted 7–1 to freeze rents on both one-year and two-year leases covering approximately one million rent-regulated apartments across the five boroughs, fulfilling one of Mayor Zohran Mamdani’s signature campaign promises.

It is the first categorical freeze of both one-year and two-year leases in New York City’s history. The vote, applauded by tenants and tenant advocates alike, was hailed by Mamdani as “a historic victory for New York City tenants,” but property owners and legal commentators swiftly condemned it as a constitutionally deficient act of regulatory overreach that, paradoxically, may hasten the United States Supreme Court’s (“SCOTUS”) intervention.

Drawing on the constitutional doctrines established by Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978) and Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982), together with their progeny, the rent freeze may present substantial constitutional vulnerabilities and parallel state-level issues.

Although SCOTUS repeatedly denied certiorari in cases challenging New York’s Housing Stability and Tenant Protection Act of 2019 (“HSTPA”)—effectively keeping the remaining stock of New York City’s rent-regulated apartments in perpetual rent-regulated status—the constitutional analysis differs markedly.

The HSTPA was adopted by the Legislature, which has broad discretion to implement rental regulations under Yee v. City of Escondido, 503 U.S. 519 (1992), whereas the freeze was passed by the RGB, an independent body required to rely on objective data in evaluating yearly rent ranges. [Author’s Note: Author Massimo F. D’Angelo foreshadowed that the main body of the HSTPA would be upheld on constitutional grounds in his New York Law Journal article entitled “Can Rent Laws Pass Constitutional Muster?”].

The RGB’s Authority and Framework

The RGB is an independent administrative body created under New York’s Rent Stabilization Law (“RSL”). It consists of nine mayoral appointees: two representing tenants’ interests, two representing landlords’ interests, and five representing the general public.

Though mayoral appointees, RGB members serve fixed terms and are removable only for cause, except for the chairperson who serves “at the pleasure of the mayor,” a structure purportedly designed to insulate the RGB’s decision making from political influence.

The law requires the RGB to annually determine whether regulated rents shall be “adjusted” by weighing specific, objective factors—including, among other things, the economic condition of the residential real estate industry, current and projected operating costs (including fuel, labor, and insurance), and the costs and availability the overall supply of housing accommodations—before reaching its determination See NYC Admin. Code §26-510(b).

Mayor Mamdani, however, campaigned on a pledge to freeze rents for the entirety of his tenure, and upon taking office, appointed six of the RGB’s nine members.

On the morning of the vote, Christina Smyth—an attorney serving on the RGB as a landlord representative appointed by former Mayor Eric Adams—resigned in protest, writing that “[t]his year’s RGB order was decided last year on the campaign trail” and that the “rebuilt board was required to deliver a rent freeze. Everything since has been theater.”

The factual backdrop underscores the tension. The RGB’s own 2026 Price Index (the “Price Index”) found that operating costs for buildings containing rent-stabilized units increased by 5.3%. Taxes, the highest-weighted component, increased 2.6%, while fuel costs, utilities, and insurance (among other components) rose 11%, 5.6%, and 10.5%, respectively.

The freeze also departed from the RGB cost-based commensurate benchmarks: 3.4% for one-year leases and 4.8% for two-year leases, with the Price Index projecting another 4.1% operating-cost increase next year.

On top of this,Local Law 97, NYC’s landmark climate mandate for most buildings over 25,000 gross square feet, may require many covered buildings with rent-regulated apartments to fund energy-efficient improvements, retrofits, compliance pathways.

Despite these documented increases, the RGB majority approved zero increases for both one-year and two-year leases, and the mayor has signaled his intention that rents remain frozen for as long as he holds office.Former New York Lieutenant Governor Betsy McCaughey characterized this as a scheme that “smacks of the kind of expropriation of private property that occurs in Cuba, Venezuela and other socialist nations,” concluding: “Not in America: The US Constitution prohibits it.”

Constitutional Analysis

The central constitutional question is whether a multi-year freeze, imposed despite documented operating-cost increases, constitutes a “taking” of private property without just compensation in violation of the Fifth Amendment, as applied to the states through the Fourteenth Amendment.

Per Se Physical Takings.  The per se takings framework, articulated in Loretto, holds that government-mandated permanent physical occupation of property constitutes a taking regardless of trivial economic loss. Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021) extended this doctrine, with SCOTUS holding that a California regulation granting union organizers access to agricultural property constituted a per se physical taking, thus emphasizing that the right to exclude is “one of the most essential sticks in the bundle of rights that are commonly characterized as property.”

However, in Yee, the court held that rent-control ordinances that cap allowable rents and restrict tenant selection do not constitute per se physical takings, because landlords initially choose to enter the rental market.

In Yee, SCOTUS held that “[w]hen a landowner decides to rent his land to tenants, the government may place ceilings on the rents the landowner can charge, or require the landowner to accept tenants he does not like, without automatically having to pay compensation.”

Relying on Yee, the Second Circuit upheld the main body of New York’s Housing Stability and Tenant Protection Act of 2019 (“HSTPA”) against per se takings challenges in Community Housing Improvement Program v. City of New York, 59 F.4th 540 (2d Cir. 2023), cert. denied, 144 S. Ct. 264 (2023).

Yet, the RGB’s freeze presents a distinguishable scenario. Where the HSTPA concerns the regulation of housing, the RGB’s decision eliminates any rent adjustment, notwithstanding the RGB’s statutory obligation to weigh documented cost increases and other evidence.

The distinction is significant: a housing framework adopted by a legislature occupies different constitutional terrain than a decision by an independent body legally required to evaluate operating-cost increases in setting annual adjustments.

Regulatory Takings. The freeze will likely be assessed under the multi-factor framework of Penn Central which considers: (1) the economic impact of the regulation on the claimant; (2) the extent of interference with distinct investment-backed expectations; and (3) the character of the governmental action.

On the first factor, the economic impact may be objectively substantial. A zero-percent adjustment against documented cost increases compels landlords to absorb rising overhead and material costs with no offsetting revenue.

Over multiple years, the cumulative shortfall could render certain properties economically unviable—precisely the condition that McCaughey warns will cause “buildings to rapidly fall into disrepair.”

Indeed, public reporting after the HSTPA illustrates this investment concern: Blackstone, owner of the 11,000-plus-unit Stuyvesant Town–Peter Cooper Village complex, reportedly paused non-urgent apartment renovations and other planned work after the 2019 rent-law changes limited rent increases tied to renovations and repairs.

The risk is concentrated on the older, highly stabilized stock. Roughly 456,000 “legacy 90%+” units—close to half of the stabilized stock—lack market-rate units to absorb cost increases; the Community Preservation Corporation (“CPC”) estimates that older multifamily buildings cost about $1,250 per month to operate, while RGB data put median collected rent in pre-1974, fully stabilized buildings at $1,343 citywide and $1,212 in the Bronx.

Parallel metrics identify similar debt-service pressure, citing CPC’s estimate that roughly one-third of its rent-stabilized mortgages do not generate enough income to cover mortgage payments.

According to New York State’s Division of Housing and Community Renewal, rent-stabilized units registered as vacant rose from about 49,000 in April 2024 to more than 57,000 in April 2025, supporting the concern that some units may remain offline where renovation costs exceed legally recoverable rents.

On the second factor, investment-backed expectations must be evaluated against New York’s heavily regulated housing market. Courts have recognized that landlords in New York’s rent-stabilized sector cannot reasonably expect wholly unencumbered returns. See Community Housing Improvement Program, 59 F.4th at 555 (“Given the RSL’s ever-changing requirements, no property owner could reasonably expect the continuation of any particular combination of RSL provisions. As the New York Court of Appeals has noted, ‘no party doing business in a regulated environment like the New York City rental market can expect the RSL to remain static.’”) (citing Matter of Regina Metro. Co., LLC v. New York State Div. of Hous. & Cmty. Renewal, 35 N.Y.3d 332, 369 [2020]).

Still, the RGB may not disregard the statutory facts it must consider. Its framework, mandating consideration of data and metrics, creates an expectation that rent adjustments will bear some rational relationship to documented costs. If the freeze ignored such data, it would defeat the expectations that the statutory framework was designed to protect.

On the third factor, the character of governmental action weighs against the freeze. As the Court of Appeals explained in Seawall Associates v. City of New York, 74 N.Y.2d 92 (1989), where a regulation forces “some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,” a taking occurs. The freeze places the cost of the City’s affordability crisis on a defined class of property owners without compensation.

The Supreme Court’s decision in Kelo v. City of New London, 545 U.S. 469 (2005), further illuminates the constitutional quagmire. In Kelo, the Court upheld eminent domain to include the transfer an owner’s private property to another private party for purposes of economic development, holding that the underlying anticipated public benefits satisfied the Fifth Amendment’s “public use” requirement.

Critically, however, the Kelo majority emphasized that the government’s power remains constrained by the just compensation requirement—a safeguard absent from the RGB freeze. The freeze effectively commandeers landlords’ economic interest in their properties for a public purpose—housing affordability—without compensation.

If Kelo permits the redirection of private property interests to serve broader public objectives, it also reinforces that such redirection requires just compensation; the RGB freeze satisfies neither the procedural safeguards nor the compensatory requirements that even Kelo’s expansive reading of the Takings Clause demands.

The Supreme Court’s Evolving Posture. SCOTUS previously declined to hear HSTPA challenges, but Supreme Court Justice Clarence Thomas stated that “the constitutionality of regimes like New York’s [rent regulations] is an important and pressing question.” See 74 Pinehurst LLC v. New York, 146 S.Ct. 540, 540 (2024).

Although SCOTUS denied certiorari in cases presenting “generalized allegations about [litigants’] circumstances and injuries,” Justice Thomas noted that “in an appropriate future case, we should grant certiorari to address this important question” [“of how New York City regulations” may “coordinate to completely bar landlords from evicting tenants.”]. See id. at 540–41.

Justice Thomas’s vigorous Kelo dissent argued that the majority’s broad reading of “public use” strayed from the Fifth Amendment’s original meaning and enabled government appropriation of private property for favored private interests.

Read alongside his statement on New York’s rent regulation regime, that dissent suggests a commitment to constraining governmental interference with property rights that the freeze may squarely implicate. A multi-year freeze imposed by a politically reconstituted RGB that ignores operating-cost data may present the factual predicate SCOTUS has been awaiting.

Substantive Due Process. Under substantive due process, New York courts have long held that “the State may not, under the guise of regulation…deprive the owner of the reasonable income productive or other private use of [their] property,” and that “such an exercise of the police power would be void as violative of the due process clauses of the State and Federal Constitutions.” Fred F. French Inv. Co. v. City of New York, 39 N.Y.2d 587, 91 (1976). Drawing on this principle, the Court of Appeals held that regulatory action becomes constitutionally infirm when it effectively eliminates the productive use of property. See id.

Economic and social welfare regulations are typically reviewed under rational-basis scrutiny, asking whether the regulation is reasonably related to legitimate goals such as preventing displacement, preserving affordable housing, and stabilizing distressed assets. But, rational-basis review, while deferential, is not a rubber stamp.

The Ralls Corp. v. CFIUS decision (758 F.3d 296 [2014]), while arising in the distinct context of direct foreign investment in real property, is instructive on procedural due process: the D.C. Circuit Court of Appeals held that the government’s deprivation of property interests without adequate notice and opportunity to be heard violated due process. In the RGB context, the parallel argument is not that the RGB lacked discretion, but that discretion must be exercised through the process the statute requires.

If the RGB’s deliberative process was, as Smyth alleged, mere “theater” predetermined by a campaign promise, property owners could argue that the RGB failed to meaningfully consider statutory factors embedded in its own framework.

Article 78 Review and State-Law Challenges

Notwithstanding the federal constitutional issues, a New York Article 78 proceeding may be the most immediate avenue to challenge the RGB freeze and must be brought within 120 days of the vote. In fact, on July 22, 2026, a group of owners owing rent regulated apartments filed an Article 78 petition challenging the rent freeze in the State Supreme Court of New York, Richmond County, which is presently returnable before the court on August 21, 2026. 

Under New York’s statutory scheme, the RGB must consider specific cost-related data before setting rent adjustments. A petitioner could argue that imposing a zero-percent increase despite documented operating-cost data was arbitrary and capricious, because the determination disregarded statutory factors that the RGB was legally obligated to weigh.

A similar Article 78 challenge was filed (and dismissed) in 2017 following the de Blasio-era one-year freeze, largely because tenant affordability and economic conditions were prominent evaluation factors. Nonetheless, the factual record here is unique given the magnitude of documented cost increases, the length of the freeze, and open political predetermination.

 Counterarguments and Governmental Interest

 The government’s interest in housing affordability is undeniably compelling. New York City is one of the world’s most expensive places to live and has among the lowest home-ownership percentages of any metropolitan city in the United States.

Approximately 2.4 million New Yorkers live in rent-stabilized apartments, and tenant advocates have consistently warned that even modest rent increases threaten to displace longtime residents from their neighborhoods.

Courts have historically afforded state and local governments wide latitude in regulating the landlord-tenant relationship. In Yee, the Supreme Court acknowledged the state’s power to impose rent ceilings.

The Second Circuit’s affirmance of the HSTPA in Community Housing Improvement Program likewise demonstrates judicial deference to legislative judgments in this area. Supporters will argue that the freeze represents a permissible exercise of the police power—a targeted, potentially time-bounded intervention designed to prevent displacement and stabilize the housing market during a period of acute affordability pressure.

However, the constitutional calculus shifts when a regulation eliminates any economic return rather than merely constraining it, particularly if a court finds that the RGB did not consider the objectively verifiable evidence on which it was mandated to rely.

Even where a regulation serves laudable public purposes, including an acute housing crisis, it must satisfy doctrinal requirements governing proportionality between the burden imposed and the social problem addressed.

The Seawall principle—that the government may not force “some people alone to bear public burdens” that should be shared broadly—applies with full force here; if the freeze is a regulatory taking, owners are legally entitled to compensation, potentially through government subsidies or tax exemptions.

Consequently, supporters of the freeze will likely point to landlord-profit data: the RGB’s 2026 Income and Expense Study found that net operating income for buildings containing rent-stabilized units rose 6.2% from 2023 to 2024 (or 2.2% for inflation), that average net operating income was $688 per unit per month in 2024, and that inflation-adjusted net operating income has increased 56.6% citywide since 1990.

These figures, however, do not eliminate the narrower economic-impact argument: the RGB chair’s final-vote statement recognized that outcomes varied by location, with stronger net operating income growth in Manhattan (but a 0.1% decline in the Bronx), while distinguishable metrics exist for mixed buildings compared with older, highly stabilized buildings without market-rate offsets.

 Conclusion

The RGB freeze occupies an uneasy position in takings jurisprudence. It is neither traditional rent regulation, which calibrates adjustments to documented costs, nor a complete physical appropriation of property. According to the RGB’s own departing member’s account, it is a regulatory intervention that denies landlords any adjustment to counter rising operating costs, imposed by a politically reconstituted board whose outcome was predetermined on the campaign trail.

Under Penn Central, the freeze’s economic impact, interference with the investment-backed expectations created by the RGB’s statutory framework, and character of the governmental action—concentrating the cost of a citywide affordability crisis on a defined class of property owners—could collectively support a regulatory-taking finding. The procedural infirmities—a board stacked to deliver a preordained outcome and deliberations that ignored statutorily mandated cost data—may also independently support both an Article 78 challenge and due process claim.

Justice Thomas has signaled that SCOTUS should be prepared to examine rent regulation with new constitutional rigor. The freeze may provide the vehicle for precisely the takings adjudication Thomas has been awaiting.

Any challenge will likely to take two or three years to reach the high court, but when it does, the justices could strike down the freeze—or, more consequentially, part of the City’s rent regulatory scheme—as an unconstitutional taking.

The freeze’s constitutional durability is, at best, uncertain. At worst, it is a litigation invitation that may imperil not only the freeze but also the broader edifice of New York rent regulation that tenant advocates have long fought to preserve.

"Can the Rent Freeze Be Unfrozen?" by Massimo F. D’Angelo and William M. Pekarsky was published in the New York Law Journal on July 29, 2026. Reprinted with permission.