Approximately $2 billion in uncollected rent annually is attributed to rent-stabilized apartments in Manhattan, as wealthy tenants benefit from deeply discounted rates. For instance, roughly 2,200 New York City households with incomes exceeding $1 million annually live in rent-stabilized units, with about 15,000 households earning over $500,000 living in such apartments. Many of these units are in prime Manhattan locations. While the exact number of Manhattan rent-stabilized apartments is around 1 million, these units are often mistakenly believed to be primarily for low-income individuals, similar to rent-controlled units.
Some tenants have found ways to transfer rent-stabilized leases to family members, maintaining below-market rents for generations. A notable example is a Park Avenue apartment in a luxury building where a tenant pays $1,250 a month for a three-bedroom apartment, while similar units in the building rent for $11,000 to $17,000. Another instance highlights an Upper West Side resident paying $1,850 for a two-bedroom apartment that could fetch $8,000 on the market. This disparity results in a substantial financial advantage for these tenants.
In New York City, the median rent for a typical place in Manhattan is $4,489 as of July 2026, though it has seen a 2% year-over-year decrease. To afford this comfortably, a household needs a gross income of approximately $179,560 annually, or $14,963 per month, dedicating no more than 30% of income to housing and utilities. For contrast, the U.S. median household income was $74,580 in 2022. While market rents in Queens, the Bronx, and Brooklyn have increased, Manhattan rents have fallen for 13 consecutive months year-over-year, and are $171 below pre-pandemic levels, suggesting lower demand in the most expensive market.
Rent stabilization limits annual rent increases for tenants, providing security of tenure. For leases beginning October 1, 2025, through September 30, 2026, the maximum increase is 2.75% for one-year leases and 5.25% for two-year leases. This ensures that even if market rents soar, tenants in stabilized units face only regulated, modest increases. This system, though intended to support renters, particularly those with modest incomes, also benefits high-income individuals who secure these units, leading to significant savings over time compared to market-rate alternatives.
