New York multifamily investment guide

Every other regulatory finding in this series governs what an owner may charge or what an owner may build. New York does something none of the others do: it charges the building, annually, for what it emits.

Local Law 97 applies through Article 320 of the New York City Administrative Code. The Department of Buildings states the coverage test three ways: "a building that exceeds 25,000 gross square feet," or "two or more buildings on the same tax lot that together exceed 50,000 gross square feet," or "two or more condominium buildings governed by the same board of managers and that together exceed 50,000 gross square feet." Article 320 "requires covered buildings to file a report with the Department by May 1, 2025 detailing their annual GHG emissions and then by May 1 of every year after."³

The penalty schedule is where this becomes an underwriting item rather than a compliance chore. Exceeding the limit costs "((Actual Emissions – Emissions Limit) x $268) per year." That figure is what most discussion of this law fixes on, and it is recurring rather than one-time: a building over its limit pays every year it remains over.⁴

The provision that gets less attention is the other one. Failure to submit the annual emissions report costs "(Floor Area x $0.50) per month." That is fifty cents per square foot per month, or six dollars per square foot per year, and it is assessed on floor area rather than on any overage. On a hundred thousand square foot building it is six hundred thousand dollars a year, on our arithmetic, for a filing that was not made. For most buildings that number is larger than any plausible emissions penalty, which inverts the usual intuition that the engineering is the risk and the paperwork is administrative.⁴

The Department reports a sixty day grace period, so no penalty is issued if the report is filed within sixty days of May 1, and it publishes adjustment routes for hospitals, nonprofits, and buildings with legal or physical constraints or financial hardship. Under Article 321, the alternative pathway described below, a late compliance report or a failure to demonstrate compliance is instead a flat $10,000.⁴

As of an April 22, 2026 release, the Department reported that "approximately 93% of the covered privately owned properties, representing 91% of covered buildings, across the city have filed their Local Law 97 compliance reports," with roughly 28,000 buildings submitting reports requiring audit, and over $1,460,048 raised through the sale of carbon offset certificates. It has not yet published how many of those buildings were over their limits. We note that gap rather than filling it: the filing rate is known, the compliance rate is not.⁶

• Covers buildings over 25,000 gross square feet, and certain groupings over 50,000.
• Exceeding the limit: $268 per metric ton over, every year.
• Failing to file: fifty cents per square foot per month, six dollars a year.
• Reports are due May 1 annually, with a sixty day grace period.

Fifty cents a square foot a month is six hundred thousand dollars a year on a hundred thousand square foot building. The filing penalty is usually larger than the emissions penalty.

The demand picture beneath all of this is the one most often asserted and least often checked, so we checked it county by county.

Every one of the four boroughs we measured has fewer residents than at the 2020 census base. Kings County fell 3.0 percent to 2,653,963, a loss of 82,328. Bronx County fell 4.5 percent to 1,406,332, a loss of 66,308 and the steepest rate of the four. Queens fell 2.0 percent to 2,358,182, a loss of 47,245. New York County fell 1.8 percent to 1,664,862, a loss of 30,122. Together that is 226,003 fewer residents on our arithmetic.²

Supply is not the offsetting story. Kings permitted 6,844 residential units in 2025 against 1,141,824 units of stock, about 0.60 percent. New York County permitted 2,984 against 938,554, about 0.32 percent. Queens permitted 3,395 against 934,750, about 0.36 percent. Only the Bronx is building with any intensity, at 6,032 permits against 583,114 units, about 1.03 percent. These are low rates, comparable to the constrained markets in our coverage rather than to Austin or Phoenix. A shrinking population meeting almost no new supply is a stable rent picture, not a growing one.²

What New York does have, in a degree nothing else in our coverage approaches, is renters. Bronx County is 20.1 percent owner-occupied, meaning 79.9 percent of households rent, deeper than any market we have measured; the previous deepest was Richmond city at 56.5 percent. New York County is 25.1 percent owner-occupied and Kings 29.5 percent. Queens, at 44.9 percent, is the outlier and looks like a normal American county.²

The reason the renter share is that high is visible in the price data. Median home value is $1,090,500 in New York County, the highest we have recorded, and $905,000 in Kings against a median household income of $80,263, a ratio of about 11.3 times income on our arithmetic. Monthly ownership with a mortgage in Kings costs $3,542 against a median rent of $1,833, a gap of $1,709 a month, wider than the $1,206 we measured in Los Angeles. In New York County the Census figure for monthly owner cost is reported only as "$4,000 or more," a capped value, so we do not compute a gap there rather than treat a ceiling as a number.²

That gap is the structural support for this rental market. Where owning costs $1,709 a month more than renting, a rent increase does not push a tenant toward a purchase, because the purchase is not reachable. It is the opposite of the position we described in Phoenix, where a $223 gap caps rent growth without any regulator involved.²

The Bronx is the exception that limits the thesis. Median rent there is $1,458 against a median household income of $48,676, which is about 35.9 percent of income on our arithmetic. That is above the thirty percent line at the median household, not at the margin, and it sits alongside a 28.7 percent poverty rate. A rental market can be deep and still have no headroom, and the borough with the most renters in our entire coverage is the one with the least room to raise what it charges them.²

• All four boroughs lost population, 226,003 residents in total.
• Permitting runs 0.32 to 1.03 percent of stock, low by the standards of our coverage.
• Bronx County is 79.9 percent renters, the deepest base we have measured.
• Kings County ownership costs $1,709 a month more than renting.

The Bronx has the deepest renter base in our coverage and a median household already spending 35.9 percent of income on rent. Depth is not the same as headroom.

Our position on New York is that the pricing question here is not rent. It is the emissions pathway, and it is knowable before a bid in a way that most risks are not.

We would not acquire in the Bronx at present, despite it having the deepest renter base in our coverage. Rent already takes about 35.9 percent of median household income, poverty is 28.7 percent, the borough lost 4.5 percent of its population, and it is permitting more heavily than the other three. A deep renter base with no room to raise rents is a yield trap, and the concentration of rent regulated stock there means many of those buildings also sit close to the 35 percent Article 321 line.²⁵

We would underwrite Queens. It is the most owner-occupied of the four boroughs at 44.9 percent, which cuts both ways, but it carries a median household income of $86,136, a poverty rate of 13.4 percent, rent at about 27.2 percent of income on our arithmetic, and the lightest permit intensity of the four at about 0.36 percent of stock. It is the borough whose numbers most resemble a market we would ordinarily buy in.²

On Manhattan we are cautious for a simple reason: the county lost 30,122 residents, records the highest median home value we have measured at $1,090,500, and reports monthly ownership cost only as a capped figure. When the published data stops resolving at the top of the range, our ability to underwrite the rent-versus-own decision stops with it, and we would rather say so than estimate around it.²

Three diligence items we would treat as mandatory in this city, and they are all answerable from documents. First, the gross square footage, because 25,000 feet decides whether Local Law 97 applies at all. Second, the exact percentage of dwelling units under rent regulation, because more than 35 percent puts the building on the thirteen-measure checklist and 35 percent or less puts it on a perpetual carbon cap. Third, the filing history, because the penalty for a missed report is six dollars per square foot per year and it accrues whether or not the building was ever over its emissions limit.⁵⁴

Investors comparing this with markets where the binding constraint runs the other way should read our Phoenix guide, where the purchase option caps rents, and our Minneapolis-St. Paul guide, where the constraint is a rent stabilization ordinance rather than a carbon limit.

Three documents settle most of the risk here: the square footage, the regulated share of the rent roll, and the filing history. All three are answerable before you bid.