Multifamily Returns to the Fundamentals

The Comptroller's September newsletter cites August citywide market-rent growth of 5.6% year over year. Separately, RGB's April 2025–March 2026 operating-cost basket rose 5.3%, including 10.5% for insurance. Different periods and populations prevent subtracting these rates to estimate a property's NOI growth.

RGB Order 58 sets a 0% guideline for covered one- and two-year apartment leases commencing October 1, 2026–September 30, 2027, subject to the full order and other lawful adjustments. Preferential-rent rules also matter. Do not apply market-rent growth automatically to stabilized renewals.

Review actual taxes, insurance, repairs, payroll and utilities. NYC tax assessment is not simply purchase price multiplied by a generic rate. For Queens comparables, reconcile unit mix, condition, transit, concessions and regulatory exposure before comparing basis per unit.

In this invented example, expenses rise faster in dollars than income. NOI falls, and cash after debt and capital expenditures (CapEx) declines from $130,000 to $98,000. DSCR here means NOI divided by debt service; lenders may use adjusted cash flow. Debt Yield is NOI divided by loan principal. Neither ratio guarantees approval.

Track collections, lawful renewals, insurance quotes, tax bills, CapEx and maturity funding gaps.