Welcome to this week’s RentScore Insider. Your go to for the analytics and intelligence powering smarter decisions in the rental housing world. This edition dives into the under-the-radar forces nudging rent levels, influencing landlord margins, and creating new risks and opportunities in the rental ecosystem.
1. Hidden cost inflation: not just rent hikes
You may have seen headlines about average rents ticking up. But what’s less visible are the escalating operating costs behind rental housing.
- In key markets such as New York City, insurance costs for buildings in the rent-stabilized stock have surged approximately 150% since 2019. New York Post
- A broad-based study of U.S. multifamily buildings found average property-insurance costs rose from ~$39 per unit/month in 2019 to ~$68 per unit/month in 2024 (in real terms) — an increase of more than 75%. Federal Reserve
- Meanwhile, other cost categories are also rising. For example, in NYC, maintenance costs rose ~39% and utilities ~31% over the same timeframe. New York Post
What this means:
Landlords and property managers are facing elevated cost pressures even before considering rent growth opportunities. That means tighter net operating incomes (NOIs), higher break‐even thresholds, and fewer margins for upgrades, amenities or flexibility in tenant negotiations.
2. Deferred maintenance & regulatory risk
As costs rise, some operators appear to be shifting spending away from repairs or replacing capital expenditures in order to absorb insurance, tax or utility inflation.
- The NYU Furman Center report flagged a ~47% increase in housing-code violations among rent-stabilized buildings (about 456,000 units) between 2021 and 2025. New York Post
- Historically, rent-stabilized building owners in NYC spent roughly 59 ¢ of every dollar of revenue on operating & maintenance costs (in 2017); meaning less than 41 ¢ remained for NOI, debt service or capital improvements. Rent Guidelines Board
Watch-out for operators and investors:
Deferred maintenance can lead to escalating capital saddles later, regulatory fines, tenant dissatisfaction and reputation risk — all of which can impact occupancies, renewals, insurance rates or resale valuations.
3. Supply-side: zoning, density and the renter/homeowner tension
Beyond cost inflation, the rental market is being shaped by what’s happening on the supply side — specifically development approvals, zoning reform and community push-back.
In cities like NYC:
- Policies introduced by the Zohran Mamdani administration (and others) are proposing zoning changes and affordable-housing mandates that pit renter goals (more units and affordability) against homeowner concerns (density, infrastructure, parking). New York Post
- Despite population dips post-pandemic, median gross rents still rose from ~$1,500 in 2019 to ~$1,680 by 2022 in NYC — a 12% increase. NYC Comptroller
Why this matters:
- Sluggish supply growth + elevated cost burdens = constrained rental-market elasticity.
- As owners face higher cost bases and limited ability to raise rents (in regulated markets), the margin squeeze gets amplified.
- For investors and managers, that calls for proactive scenario planning around cost structures, regulatory change and supply risk.
4. How RentScore helps you stay ahead
At RentScore, we don’t just look at rent levels; we track the drivers of rental-market shifts. Here’s how we support your decision-making:
- Cost-pressure analytics: Track insurance, maintenance and utilities inflation by region or property size.
- Vacancy & absorption signals: Spot markets where supply is outpacing demand or where cost hikes may lead to turnover.
- Policy & zoning monitoring: Map key regulatory changes (zoning, rent-regulation, affordable-housing mandates) that impact rental supply.
- Benchmarking dashboards: Compare your property’s cost base, rental growth and NOI against peer cohorts.
- Scenario modelling: Simulate cost-shock or supply-disruption events and their impact on rents/returns.
If you’re managing a portfolio (or advising one), now is the time to validate your assumptions: “What do my cost-drivers look like?” “Is my supply-risk factored in?” “How resilient is my NOI if cost inflation continues?”
5. Your action checklist
Here are three immediate actions you can take this week:
- Audit your cost base – segment by insurance, maintenance, utilities and taxes. Compare to last-year and pre-pandemic figures.
- Review your cap-ex backlog – deferred projects = latent liabilities. Prioritise critical maintenance before it becomes an integrity risk.
- Scan your local zoning/regulation landscape – are new supply waves coming? Are local regulations tightening? Factor into 12-36 month planning.
Thanks for reading this edition of RentScore Insights. We’ll be back next week with fresh data, emerging trends and strategic take-aways you can put into action.
Until then, stay ahead of the curve.
Cheers to profits, lower expenses, and happy tenants!
The RentScore Team