Nearly one quarter of rent-regulated apartments in New York City are being rented for less than their maximum allowable rent. What is going on here?

It's called the "preferential rate," and it allows landlords of rent-regulated units to charge an amount that is lower than what they could legally get.

According to the city's Independent Budget Office, roughly 175,000 of the city's 765,354 rent-regulated units are rented at preferential rates.

"Preferential rent" sounds magnanimous, and for nearly 75% of the rent-regulated housing stock, it would be.

But say you're getting the preferential rate of $1200/month in a rent-regulated apartment in Flushing, a neighborhood with a large number of rent-regulated units, 38% of which are being offered at the preferential rate, according to the report.

Things are swell until the money creeps out along the 7 line, and Roberta's opens it's 14th cheesy bread pop-up automat, and come lease renewal time your sweet, preferential landlord tells you that next year your rent is going to increase by 20%, plus whatever the Rent Guidelines Board allows for that year. Just like that, you're paying $1450.

"I will admit it was a number that surprised me at first blush," Doug Turetsky, the IBO's chief of staff, said of the 23% of rent-regulated apartments that are offered at "preferential" rates.

"In some cases there might be the kind of thing you're suggesting," he continued, referring to our scenario above. "In other cases, it may be as simple as mom and pop landlords having tenants they want to hold on to. We haven't really delved into what may be underlying the numbers here."

Is it likely that a fifth of these landlords genuinely care about their tenants more than they care about money, and view housing in New York City as an inalienable right trapped in a capitalist death spiral, where we greedily click through onanistically aspirational brownstone rehab slideshows, and where home prices are limited not by reality itself but by the unflinching, unquenchable power of wealth?

Or is there something else afoot?

Tenants rights advocates and some State Assembly Democrats wanted to eliminate the 20% vacancy increase, and tie preferential rent increases to the Rent Guidelines Board. We have, after all, lost 50,000 affordable apartments in the last eight years alone; countless more over the decades.

Instead, Governor Cuomo, who takes most of his money from the real estate industry, deemed those concessions impossible. His agreement included none of those things.

"This is a great agreement—great,” he later said. After all, Cuomo had given New Yorkers his preferential rate.