2026 Rent Guidelines Board Updates: How to Apply the New 3% and 4.5% Increases

For landlords operating in New York City, balancing the rising costs of property taxes, insurance, and mandatory building upgrades against heavily regulated rental income is a constant high-wire act. If you own rent-stabilized multi-family properties in Brooklyn or Queens, every single percentage point on a lease renewal matters to your bottom line.

Recently, the New York City Rent Guidelines Board (RGB) finalized the allowable rent adjustments for the current leasing cycle. Applying these increases incorrectly can lead to tenant disputes, housing court delays, and severe financial penalties from the state.

Here is your definitive guide to understanding the 2026 RGB updates, how to legally apply them to your upcoming lease renewals, and what to do if these increases still don’t cover your rising operational costs.

The Official 2026 Rent Stabilized Increases

The Rent Guidelines Board has established clear, legally binding caps on how much you can raise the rent for stabilized apartments.

For all rent-stabilized leases commencing on or after October 1, 2025, and on or before September 30, 2026, the allowable adjustments are as follows:

• One-Year Leases: You are legally permitted to apply a maximum rent increase of 3% over the current base rent.
• Two-Year Leases: You are legally permitted to apply a maximum rent increase of 4.5% over the current base rent.

Note for Loft Owners: If you own units that fall into the category of buildings covered by Article 7-C of the Multiple Dwelling Law, these exact same percentages (3% for a one-year period and 4.5% for a two-year period) apply to your “base rent” as well.

The “Good Cause” Crossover

If you have free-market apartments (meaning they are not rent-stabilized), you might think the RGB rules don’t apply to you. However, with the recent implementation of the Good Cause Eviction law, the RGB numbers serve as a critical benchmark.

Under Good Cause, you cannot evict a tenant or refuse to renew their lease simply because they refuse to pay an “unreasonable” rent increase. The law defines an unreasonable increase as anything exceeding the local inflation rate plus 5%, capped at a maximum of 10%. While the 3% and 4.5% RGB caps specifically apply to rent-stabilized units, all NYC landlords must heavily document and justify any rent increases to avoid triggering a Good Cause defense in housing court.

How to Legally Apply the Increases

You cannot simply text your tenant to tell them the rent is going up 3%. New York State requires strict adherence to notification timelines.

To legally implement these increases, you must offer the tenant a choice between a one-year or two-year lease renewal. You must send this renewal offer via mail or personal delivery between 90 and 150 days before their current lease expires.

The renewal form must clearly state the current rent, the proposed new rent based on the 3% or 4.5% RGB allowance, and any other legal surcharges. If you miss this 90-to-150-day window, you cannot force the tenant to pay the increased amount until the proper legal notice period has elapsed, effectively costing you months of higher revenue.

What to Do When 3% Isn’t Enough

Let’s be realistic. For many mom-and-pop landlords in Brooklyn and Queens, a 3% rent increase does not come close to covering the 10% jump in property insurance, the rising cost of utilities, or the capital required to comply with new Department of Buildings regulations.

When your legal rent bumps are strictly capped, you cannot afford to lose money elsewhere. Your operational efficiency must be flawless. That means:

• Zero Vacancy Time: An apartment sitting empty for just one month wipes out the entire financial benefit of a 3% rent increase for the year.
• Perfect Tenant Placement: You need tenants who pay on time, do not cause property damage, and do not trigger costly legal evictions.

Maximize Your Portfolio’s Efficiency

Navigating the exact math and strict legal timelines of NYC rent regulations is exhausting. At the LJ Realty Team, we help landlords take the guesswork out of property management.

With over 21 years of experience, Sheldon The Realtor and his team provide rigorous, intelligent tenant screening to ensure you place highly qualified renters who treat your property with respect. Furthermore, our Free Expert Rental Audit helps you structure your leases correctly, identify cost-saving “quick fixes,” and maximize the return on your free-market units to balance your portfolio.

Don’t let compliance errors eat into your profits. Visit us at 127-03 Rockaway Blvd in South Ozone Park, or contact us online today to secure your Free Expert Rental Audit and safeguard your rental income.