Smiling young man holding keys while wearing a beige ringer t-shirt with bold red lips graphic and the phrase “Living the Rent-Stabilized Dream.”

The Myth That Condominiums Don’t Have Stabilized Units, and Other Fairy Tales

Unpacking the legal battles, bureaucratic snoozes, and $3,000 “affordable” studios behind New York’s most persistent housing myth

There are certain myths in New York City that refuse to die. They’re like the pigeons in Union Square or the rumors about what’s really in the hot dogs at Nathan’s. They persist because they sound believable, they fit the city’s cynical character, and nobody bothers to check. One of the best of these is the myth that condominiums do not, cannot, never have rent stabilized apartments. You can almost hear someone declaring it over drinks at a birthday dinner in Astoria, with the same smug certainty as a man insisting that the subway is haunted by mole people. And yet, the truth is the exact opposite. Not only do condos have stabilized units, but some of the fiercest fights over rent stabilization have taken place inside those shiny buildings with marble lobbies and doormen who pretend not to notice the Amazon boxes piling up.

Let us go back to the days of conversion fever, when landlords realized they could squeeze more out of a building by turning it into condominiums. It sounded simple: take an old rental, file a plan with the Attorney General, slap some marketing gloss on it, and sell the apartments like candy bars at a school fundraiser. There were two main ways to do this. One was the eviction plan, the landlord’s fantasy, where if enough tenants bought into the scheme, the rest could be shown the door. The other was the non-eviction plan, which was essentially a polite invitation: stay if you want, leave if you want, just don’t stand in the way of sales.

But here is where reality threw a wrench in the dream machine. Rent stabilized tenants did not magically vanish when the conversion papers were filed. They remained. They remained under eviction plans. They remained under non-eviction plans. They remained under both, because stabilization is a stubborn law, the kind of law that does not care whether your building is rental or condo, decrepit or gleaming. The rule is as old as the disco era and as firm as the subway’s steel beams: a stabilized unit remains stabilized until the tenant voluntarily vacates. Voluntarily, as in the tenant decides to leave. Not because the landlord whispered scary threats through the mail slot. Not because someone “forgot” to fix the heat for three winters in a row. Only when the tenant, of their own accord, packs up and goes.

Of course, the landlords didn’t like this. Some of them tried harassment. Harassment is a word that in housing law covers everything from relentless buyout offers to the creative art of neglect. A leaking ceiling? Suddenly it’s a permanent fixture. A broken boiler? Who needs heat anyway, it builds character. But the law says, quite clearly, harassment is illegal. And tenants, armed with patience and a stubborn streak, fought back. Many still do.

Meanwhile, DHCR, the Division of Housing and Community Renewal, was meant to be the referee. Landlords must file annual registrations for every stabilized unit. Fail to register, and guess what? You can’t raise the rent. Not a dime. The rent gets frozen, stuck in amber like a prehistoric mosquito. Yet landlords still tried to bluff. They assumed tenants wouldn’t notice, or that DHCR was too overwhelmed to care. And too often, they were right. Because the problem isn’t always the bad landlord. The problem is the sleepy agency. DHCR, in theory, is the watchdog. In practice, it’s the dog asleep on the porch, tail twitching in a dream, while the burglars cart off the furniture.

This is where the ROC, the Rent Overcharge Complaint, comes in. A tenant who suspects foul play can file one, and DHCR has to investigate. Landlords are required to hand over records, and tenants must be allowed to review and rebut those records. If DHCR cuts corners, if they issue a determination without letting the tenant see the evidence, then the tenant can escalate to a Petition for Administrative Review, the mighty PAR. Filing a PAR is like hitting the pause button. The original decision is frozen until the appeal is decided. Tenants cling to this like a lifeline, because too often DHCR rulings come down like thunderbolts, sudden and unexplained, leaving tenants blinking in the rubble.

But the real hammer is the Article 78 proceeding. This is the lawsuit that says, in effect, “Your agency is asleep at the wheel, and I’m dragging you into Supreme Court.” Article 78 is the last refuge of the desperate tenant, the moment when patience is exhausted and the bureaucracy has failed. The Civil Practice Law and Rules, the CPLR, lays out how to do it. It’s a formal dance, with deadlines and filings and motions, but the essence is simple. If an agency acts arbitrarily, if it ignores the law or bends it to favor landlords, a tenant can haul them before a judge and demand accountability. Sometimes, this works. Sometimes, the agency gets a slap on the wrist. And sometimes, nothing changes, because in New York housing, justice is often just another broken radiator waiting for repair.

And while all this legal theater plays out, something else has been happening in the skyline. Across gentrified neighborhoods, from Jamaica to Yonkers, shiny new “affordable” buildings rise like alien monoliths. They are marketed as the solution to the housing crisis, gleaming with rooftop decks and fitness centers. But step inside and you’ll find studios renting for $3,000, apartments that would once have been reserved for investment bankers or tech transplants. The developers promise affordability, but the numbers tell another story. The so-called affordable units are pegged to Area Median Income calculations that make no sense to the actual residents of the neighborhood. Working-class families look at these prices and laugh, or cry, depending on the day.

Even here, stabilization sneaks in. Some of those units are rent stabilized, the crumbs left from the feast. But stabilization in these towers doesn’t mean integration. It means a handful of tenants are grandfathered into buildings designed to price out the rest of the neighborhood. The program that was supposed to weave working-class New Yorkers into the housing fabric has been hijacked into a machine for gentrification. The result is a two-tiered city, where one tenant in a stabilized unit struggles to hang on while the rest of the building fills with people who see New York as a temporary stop before graduate school in London.

The irony is painful. Rent stabilization, once meant to provide a bulwark for working-class New Yorkers, now survives as a relic scattered across luxury towers, aging rentals, and converted condos. Each stabilized apartment is like a holdout in a war of attrition, a single candle in a storm. Landlords circle, agencies falter, and the myth persists. Condos don’t have stabilized units, people say. But they do. They always have. And as long as tenants understand the laws, file their ROCs, fight their PARs, and, when necessary, haul the agencies into court under Article 78, those stabilized apartments will continue to exist.

The larger tragedy is not that landlords are clever or greedy; it is that the very institutions meant to keep them honest often fail. The housing crisis in New York is not just a story of landlords against tenants. It is the story of agencies too timid or too overworked to enforce the rules. It is the story of tenants forced to become their own lawyers, investigators, and activists. And it is the story of a city that calls $3,000 studios “affordable” with a straight face, while the people who built the neighborhoods are slowly pushed out.

So the next time someone insists, over coffee or cocktails, that condos don’t have stabilized units, you can shake your head and laugh. The truth is much more absurd, much more tragic, and much more New York. The stabilized tenant lives on, defying conversion plans, outlasting landlords, and reminding us all that myths may be comforting, but reality, in this city, is always stranger.

But the real hammer is the Article 78 proceeding. This is the lawsuit that says, in effect, ‘Your agency is asleep at the wheel, and I’m dragging you into Supreme Court.’ Article 78 is the last refuge of the desperate tenant, the moment when patience is exhausted and the bureaucracy has failed. The Civil Practice Law and Rules, the CPLR, lays out how to do it. It’s a formal dance, with deadlines and filings and motions, but the essence is simple. If an agency acts arbitrarily, if it ignores the law or bends it to favor landlords, a tenant can haul them before a judge and demand accountability. Sometimes, this works. Sometimes, the agency gets a slap on the wrist. And sometimes, nothing changes, because in New York housing, justice is often just another broken radiator waiting for repair.

Article 78 stands as one of the strangest and most vital safety valves in New York housing law. Buried in the Civil Practice Law and Rules, it gives ordinary tenants the extraordinary ability to haul a state agency into Supreme Court when that agency refuses to do its job. A tenant who has battled through DHCR’s byzantine process, filed a Rent Overcharge Complaint, waited months or even years for a decision, and then discovered that the determination makes no sense, has one last resort. Article 78 says you can challenge the decision if it is arbitrary, capricious, an abuse of discretion, or made without following lawful procedure. In other words, if the agency cuts corners, ignores evidence, or rubber-stamps a landlord’s claims, the courts can intervene.

The brilliance of Article 78 is in its scope. It does not re-litigate the entire case; it does not ask the judge to decide what the correct rent should be. Instead, it forces the agency to answer a simpler, sharper question: did you follow the law when you made this decision? If the answer is no, the case is sent back, and DHCR has to try again—this time under the glare of judicial oversight. The tenant is not just fighting a landlord at this point; the tenant is fighting the inertia of government itself.

The process is no small undertaking. Article 78 petitions come with strict deadlines and precise filing rules. The tenant, or their attorney, must move quickly once DHCR issues its determination. The CPLR sets the stage with unforgiving clarity: four months to file, affidavits that must be sworn, service requirements that must be met to the letter. But despite these hurdles, Article 78 has long been a lifeline for tenants who would otherwise be trapped in bureaucratic purgatory.

The Petition for Administrative Review, or PAR, is often the step right before this legal escalation. A tenant who believes DHCR made the wrong call has the right to file a PAR, which stays the original determination until the appeal is decided. This is not just a procedural quirk. It is the only thing preventing landlords from enforcing rent increases or evictions while a tenant waits for the appeal to be heard. The PAR process, like everything else at DHCR, moves slowly. Decisions can take months, sometimes years. But the delay is not wasted time. It is breathing room, a pause in which the tenant remains protected while the agency grinds forward.

When PARs are denied without explanation, when rent histories are incomplete, or when DHCR issues determinations without giving tenants access to the landlord’s records, Article 78 becomes essential. Courts have long recognized that tenants must be allowed to see and rebut the evidence against them. Anything less is not just unfair; it is unlawful. A determination made without this transparency is vulnerable to being struck down as arbitrary or capricious. The words may sound like legal jargon, but they are powerful. “Arbitrary and capricious” is the language courts use to condemn decisions that defy logic, that show no rational basis, that reek of haste or bias. It is the judicial way of saying: this decision is nonsense, go back and do it properly.

All of this—the ROC, the PAR, the Article 78—exists against a backdrop that has only grown darker in recent years. Across New York, new developments rise in neighborhoods once considered safe havens for working-class families. Shiny glass towers line the avenues of Jamaica, creep across the South Bronx, loom over Bushwick, and even stretch up into Yonkers. They are marketed as “affordable housing” developments, but the numbers betray the truth. A studio rents for three thousand dollars, labeled affordable only because it is pegged to an Area Median Income that includes not just the city, but affluent suburbs in Westchester and beyond. For the families who built these neighborhoods, affordability is a cruel joke.

The stabilized units in these towers are tokens, crumbs designed to unlock tax breaks like the infamous 421-a program. Once, stabilization was a shield for the working class, a promise that New York would not push out the very people who made it function. Now, in many of these buildings, stabilization is used as window dressing, a technical compliance to secure subsidies. The real purpose is to open neighborhoods to waves of gentrification, to invite tenants who can afford three thousand dollars for a one-room apartment while the original residents are told, politely or not, that their time is up.

The myth that condos contain no stabilized units thrives in this environment because it is convenient. Landlords prefer tenants to believe it. Agencies do little to correct it. Developers benefit when people assume stabilization is a relic, something that no longer applies in their gleaming new towers. But the reality is far more tangled. Stabilized units do exist in condominiums, and they remain stabilized until the tenant voluntarily vacates. Landlords must still register them, still file annual reports, still respect the limits on rent increases. If they fail to register, they cannot legally raise rents. If their rent history is incomplete, tenants can force the issue with a ROC. If DHCR mishandles the complaint, tenants can appeal with a PAR. And if the agency acts arbitrarily, Article 78 is waiting in the courthouse, a reminder that bureaucracies are not above the law.

The housing crisis is not simply a story of greedy landlords. It is also a story of weak enforcement, of agencies that forget their mandate, of a system that allows three thousand dollar shoebox studios to be called affordable while the working class is pushed to the margins. Stabilized tenants inside condominiums are living proof that the myth is false. Their apartments remain protected, not because landlords want it so, but because decades of law and litigation have carved these protections into stone.

The obligations of landlords are not a matter of courtesy, they are hardwired into law. The Rent Stabilization Law of 1969 (RSL) and the Rent Stabilization Code (RSC) are explicit. Owners must register their stabilized units annually with DHCR, and they must keep complete, accurate records of rents charged, leases signed, and any changes in status. Section 26-517 of the RSL requires registration, and 9 NYCRR § 2528 of the RSC spells out the penalties for failing to do so. Without proper registration, no rent increases can be collected. The rent becomes frozen, stuck at the last legal amount until compliance is restored.

Beyond registration, landlords are required to maintain documentary proof of every claim they make about deregulation or vacancy. If they say an apartment was legally deregulated because of high rent vacancy decontrol, they must provide the actual leases, rent ledgers, and DHCR filings showing that the threshold was crossed lawfully. If they claim a vacancy, they must produce the old lease and the new one, with rent histories that reconcile. If they claim Individual Apartment Improvements (IAIs) or Major Capital Improvements (MCIs) to justify higher rents, they must provide invoices, contracts, canceled checks, and permits. The RSC, particularly § 2526.1, gives tenants the right to challenge these claims and obligates landlords to produce evidence. A landlord who cannot produce a clear paper trail loses the argument, and often faces overcharge penalties.

This is why the Rent Overcharge Complaint (ROC) is so powerful. When a tenant files one under RSC § 2526, the burden shifts to the landlord to prove that every rent increase and every claim of deregulation was lawful. If their records are sloppy or missing, the law presumes against them. And if DHCR ignores the tenant’s right to see and rebut this evidence, then the tenant has solid grounds for a PAR under RSC § 2529, and if necessary, for an Article 78 proceeding under CPLR Article 78, which allows the courts to annul an agency determination made arbitrarily or without a rational basis.


Then, when you segue into the Article 78 part, you can enrich it like this:


The courts have been clear that DHCR determinations must have a rational basis. In cases where landlords fail to produce adequate records—rent rolls, leases, or proof of deregulation—the agency cannot simply take the landlord’s word for it. Under CPLR § 7803, a tenant can challenge a DHCR order on the grounds that it was “made in violation of lawful procedure,” or was “arbitrary and capricious,” or was “an abuse of discretion.” These are not abstract phrases. “Arbitrary and capricious” means the decision ignored the facts or law, or was made without reasoned analysis. “Violation of lawful procedure” means the agency skipped steps required by statute, like failing to provide tenants with the landlord’s records before issuing a decision.

When courts find that DHCR rubber-stamped a landlord’s claim without the necessary documentation, they have no problem sending the matter back. Judges have repeatedly reminded the agency that landlords carry the legal burden to keep and produce records going back years, especially when the regulatory status of a unit is in question. Without those records, deregulation cannot be sustained.


Finally, tie it back to your section on $3,000 “affordable” studios with this added punch:


The irony is that while landlords in older converted condos scramble to prove deregulation with invoices and rent rolls, entire new towers rise under programs like 421-a and Affordable New York, showering developers with tax abatements in exchange for “affordable” units that are anything but. These laws were supposed to integrate working-class New Yorkers into new developments, but instead they have produced buildings where the so-called affordable units are pegged to Area Median Incomes that far exceed the earnings of the surrounding community. What should have been a mechanism for fairness has become a mechanism for gentrification, one that pushes long-time residents out while developers smile for ribbon-cutting ceremonies.


And so we arrive at the bitter comedy of it all. New York calls three thousand dollar studios affordable, developers parade in hard hats at groundbreakings, and agencies drown tenants in forms and delays, while the simple truth remains hidden under piles of paperwork. Stabilization is not gone. It is not extinct. It lives in converted condos, in apartments landlords would rather you forget about, in buildings where glossy brochures disguise the fact that a stubborn tenant in 2B still pays a legal regulated rent because the law says so. The Rent Stabilization Law, the Rent Stabilization Code, the CPLR, the General Business Law—all of it written down, all of it binding, all of it ignored until some tenant, armed with a stack of dog-eared leases, demands it be enforced. What we call the housing crisis is not only the story of developers charging obscene prices or landlords bending rules; it is also the story of regulators who nap through the alarms, who allow gentrification to be dressed up as progress, who reward noncompliance with silence. Yet against all odds, stabilization persists, stubborn as a radiator that clangs through the night. Tenants still file their ROCs, still chase down missing registrations, still march into court with Article 78 petitions tucked under their arms, still remind judges and bureaucrats alike that laws are not suggestions. In this city, myths last forever, but so do the fights that prove them false. And until the day the last stabilized tenant hands over their keys, the truth will continue to hum beneath the marble lobbies and polished brass of condominiums: stabilization lives, and it will outlast the myths, the markets, and maybe even the city itself.


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Disclaimer
The information contained in this blog is provided for general informational and educational purposes only and is not intended, and should not be construed, as legal advice. The application of rent stabilization laws, codes, and regulations is fact-specific and may vary depending on the circumstances of each individual case. Tenants, owners, and other interested parties who are uncertain about the regulatory status of a particular unit, or who require guidance concerning their rights or obligations, should consult directly with the appropriate housing authority having jurisdiction in their locality, or seek advice from a qualified attorney. Reliance upon the content of this blog without obtaining individualized legal counsel may result in a misunderstanding of applicable rights and remedies.

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