THE CLASS B AND C LANDSCAPE
Here's something the broader market data tends to obscure. The vacancy pressure hitting small landlords right now is not evenly distributed. Some indicators suggest small Class B and C properties can feel more vacancy pressure in this cycle, especially where Class A lease-ups are using concessions to pull renters up-market. The good news: according to Arbor Realty Trust and Chandan Economics, the small multifamily sector entered 2026 on steady footing, with the long-term outlook remaining decisively positive, and occupancy is beginning to recover.
THE CASE AGAINST SWINGING FOR FULL MARKET
Here’s where a lot of landlords overcorrect. Having frozen rents for too long, they decide to reset everything at the next renewal at full market rate, all at once. In a tight market that might work. In this market, it’s a gamble. If your building is in a submarket where rents have recently dropped and you push hard at renewal, your tenant can find concession-heavy competition nearby. You may win the rent increase and lose the tenant. And then you’re doing the math: one month of vacancy, turnover cleaning, touch-up repairs, and re-leasing costs. In most scenarios, that’s $3,000 to $5,000 out the door, which easily exceeds whatever you gained. The better play is deliberate and incremental. Move rents up in steps over two or three renewal cycles, and land intentionally just below market, not at it. That gap is not a failure to maximize income. It’s a retention tool. A good tenant who knows they’re getting a fair deal is worth more than full market rent on a vacant unit.
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