REBNY estimates that, within five years, more than a quarter of the city's 1 million rent-regulated units will be "under significant financial duress," Whelan said. "The math is untenable."

Owner-occupied apartments will to have to pick up the slack, he added. "The next mayor, whoever he or she is, it's unlikely politically they're going to decide not to collect that billion dollars. You can essentially see it as an increase in taxes on co-ops and condos."

Louise Carroll, commissioner of the city's Department of Housing Preservation and Development, countered that the city would extend assistance to struggling landlords—and even hinted that the mayor's Rent Guidelines Board could grant bigger yearly lease hikes going forward. Manhattan state Sen. Brian Kavanagh, chairman of the Committee on Housing, pushed back on Whelan's concerns by saying that the only landlords who can't afford to operate under the new regulations are likely those who bought regulated buildings with the "pernicious" intention of raising the rents to market rate and exiting the regulatory system.

"To the extent that landlords are underwater now is because they purchased buildings at a price that was greater than justified by the rent haul along with reasonable increases," Kavanagh said. "They were speculating on their ability to remove the current tenants and get different tenants in those units that would pay more."

Whelan countered that some companies had simply made investments based on the regulatory environment at the time, and he suggested the mayorally appointed and often politicized Rent Guidelines Board be replaced with a data-driven formula based on market factors.

"We need to have these conversations moving forward based on actual data," Whelan said. "Folks can figure out how much property taxes go up each year—and trust me, they go up each year—how much utilities go up each year. We should be looking at the idea of replacing the Rent Guidelines Board with a formula that ensures that expenses are covered, and that it's in the interest of property owners to keep their properties in good shape for their tenants."