A group of small New York City landlords has sued the city’s Rent Guidelines Board, arguing its decision to freeze rents on roughly one million rent-stabilized apartments was a politically predetermined outcome dressed up as an independent vote. The suit, filed in July by five small property owners operating as Kenilworth Holdings with backing from the Small Property Owners of New York (SPONY) and the New York Apartment Association, lays out in plain terms what a freeze does to the math behind owning a small rent-stabilized building.
Rent-stabilized units make up close to 40 percent of the city’s rental housing stock, according to Commercial Observer. The board voted in June 2026 to freeze rents on both one- and two-year leases, the first time it has frozen both lease terms at once.
What the lawsuit actually argues
The plaintiffs aren’t just objecting to the outcome. Their complaint says the process itself was compromised, that members appointed under Mayor Zohran Mamdani were “predisposed to delivering a freeze” regardless of what the underlying cost data showed. Attorney Randy Mastro called the vote “a perversion of the process,” according to Commercial Observer’s coverage of the filing.
Ann Korchak, president of SPONY, put it more bluntly in a statement announcing the suit: “The rent freeze was illegal. The process was illegal and stacked against small owners,” according to Commercial Observer. Co-counsel Deborah Riegel framed the freeze as “a politically engineered decision to have owners bear campaign costs” — a reference to Mamdani’s campaign promise to freeze rents before the board ever reviewed the financial data owners submitted.
Why a freeze hits small owners differently than big ones
A rent freeze sounds simple from a tenant’s side: the number on the renewal doesn’t move. But for an owner of a six- or twelve-unit building, the other side of the ledger — property taxes, insurance, water and sewer charges, heating fuel, routine repairs — keeps climbing whether rent does or not. According to the lawsuit and Patch’s reporting, the board’s own record showed landlord expenses rising across insurance, repairs, taxes, utilities and operations, yet the board froze revenue anyway.
That gap doesn’t hit a large institutional landlord with refinancing leverage the same way it hits an individual owner with one or two buildings and a mortgage payment due regardless of what rent comes in. Sharon Redhorn, an East Flatbush building owner named in coverage of the case, put the arithmetic in personal terms: every dollar that goes into repairs is a dollar she loses somewhere else in the budget, according to Patch’s report on the lawsuit.
What comes next
The suit asks a judge to void the freeze and to release internal communications between city agencies and board members ahead of the vote, an attempt to show whether the outcome was decided before public hearings even took place. Tenant groups and ownership groups alike are watching the case as a test of how far a mayoral administration can shape an ostensibly independent board.
Whatever the court decides, the tension isn’t going anywhere. New York’s rent-stabilized stock depends on a mix of small owners and larger portfolios, and a freeze that reads as sound citywide affordability policy can still leave the smallest owners further underwater than the numbers used to justify it account for. That mismatch, more than any single court date, is what this lawsuit is really about.
Sources: Commercial Observer, Patch, NY1
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