This New York Law Was Supposed to Protect Tenants. It’s Hiking Rents Instead

I’ve been a small landlord in New York for over a decade. I know my tenants by name, and until recently I operated the way most small landlords I know operate, with flexibility, discretion, and a reluctance to raise rents on people who have been good neighbors and reliable tenants.

That era is over. And ironically, the law that ended it was designed to help renters.

The Good Cause Eviction law, which took effect in New York State in 2024, was championed as a way to protect tenants against arbitrary evictions and runaway rent increases. Landlords covered under the law cannot evict tenants without a “good cause” reason, and tenants can “use the law to challenge rent increases above a certain level if they are evicted for nonpayment of rent.” The law requires landlords to provide notice before raising rent more than 5 percent and prohibits rent increases above 8.79 percent.

The law’s architects failed to understand how small landlords operate and how dramatically this legislation would change our behavior. Before Good Cause Eviction, many of us did not raise rents every year. We had long-term tenants we trusted and valued stability over squeezing out an extra hundred dollars a month. We had flexibility precisely because we had discretion. There wasn’t a ceiling or any pressure to push toward one.

Good Cause Eviction changed that calculus. The moment you define a “reasonable” increase, you don’t just cap landlord behavior—you standardize it.

Economists have a name for this: Goodhart’s Law. When a measure becomes a target, it ceases to be a good measure. The research on rent regulation bears this out. A landmark 2019 study by Stanford economists Rebecca Diamond, Tim McQuade, and Franklin Qian found that San Francisco’s rent control expansion, while protecting incumbent renters in the short term, caused landlords to reduce rental housing supply by 15 percent, ultimately driving a 5.1 percent citywide rent increase that hurt the very population the law was meant to help.

Under the old system, if I hadn’t raised a tenant’s rent in three years, I could make a larger adjustment when costs demanded it, and my tenant understood that that was fair. Under Good Cause Eviction, any increase above 8.79 percent can be challenged in a housing court, which is no minor inconvenience. New York City housing courts have a standing backlog of 150,000 pending cases. Average disposition times run as long as 15 months. In Brooklyn, landlords wait nearly ten months just to be heard. No small landlord can absorb that kind of uncertainty.

The policymakers also ignored the issue of refinancing. Most small landlords carry mortgages that come due every five to seven years, requiring a full refinancing. When that moment arrives, lenders examine rent rolls. A property generating below-market rents appraises lower, which means worse loan terms, higher rates, or a cash requirement just to close. In a high-interest-rate environment, where borrowing costs have more than doubled from their 2021 lows, this is not an abstraction—it is an existential pressure. A landlord who was generous with a long-term tenant for three years may find, at refinancing, that he cannot qualify for a needed loan without raising rents sharply and immediately. Good Cause Eviction has now made that correction legally risky. The responsible landlord who showed restraint is punished twice: once by the market, and once by the law.

Skeptics will note that small landlords (those owning ten or fewer units) are technically exempt from the Good Cause Eviction law. In practice, however, the distinction is murky. For instance, three partners who own a 12-unit property are each considered to own more than ten units.

Up to half of New York City’s rental units are located in buildings with ten or fewer units. These are not faceless corporations. These are our neighbors, and their behavior is being reshaped by a law they may not even be directly subject to.

Good Cause Eviction did not change the way large institutional landlords operate. They had legal teams, standardized leases, and annual escalation clauses long before 2024. But the law changed my behavior, and the behavior of every small landlord I know.

Good intentions don’t guarantee good outcomes. A law designed to protect renters from arbitrary increases has given landlords every incentive to make those increases automatic, annual, and as large as the law will safely permit.

Whatever you want to call that, it’s certainly not tenant protection.