NEW YORK CITY –  The multifamily market in New York City has been on a downward slope since the announcement and passing of the Housing Stability and Tenant Protection Act of 2019 this past June that enacted landlord restrictions and extended rent regulation guidelines. And since the legislation passed in the New York State Assembly, multifamily sales have continued to slow down across the city, according to a new report from Property Shark, a real estate data provider.

Sales volume city-wide is down 60% year-over-year from $1.4 billion in November of last year to $412 million. Also, multifamily transactional activity slowed, with 893 recorded sales in the first 11 months of 2019 compared to the first 11 months of 2018, which saw 1,209 deals close. And the most significant indicator of all is the number of units sold: 20,124 between January 1 and November 30 of the current year versus the 44,308 that traded hands in the same timeframe last year.

The market is still trying to figure out how it will all work out. Prominent New York City brokerage firm Ariel Property Advisors is watching from the sidelines and is seeing that despite domestic multifamily investors finding their footing in the new normal, international investors are bullish on investments for the asset type, according to Shimon Shkury, founder of Ariel Property Advisors, in a recent GlobeSt.com article.

Meanwhile, it may appear there is a grey cloud over the multifamily asset class, all hope is not lost. Investors still attracted to affordable housing are looking at three subsectors, which include well located free-market units, typically below 96th street, free-market buildings that have a 421-A tax abatement component, or properties with low-income housing tax credits, according to Shkury.

"Not all rent-regulated buildings are impacted the same by the regulations – some will diminish in value, some won't," he said. " It's based on location and how stabilized the units are; building by building, location by location."