Regulatory Reckoning: NYC Puts Self-Storage In Its Crosshairs

It began with a handful of consumer complaints and quickly snowballed, as the city’s Department of Consumer and Worker Protection (DCWP) became inundated with grievances against self-storage facilities’ pricing practices. In several cases cited by the city, initial rates around $150 reportedly jumped to $300 or more, forcing tenants to pay higher prices or incur the cost and burden of moving their stored belongings elsewhere; additional complaints followed, citing flooded and vermin-infested units.

The DCWP, under the administration of Mayor Zohran Mamdani, zeroed in on Extra Space Storage, arguably the largest provider of self-storage in the metro area with approximately 60 locations. The city filed a lawsuit seeking approximately $5 million in civil penalties. Despite disagreement with the allegations, Extra Space settled for $1.7 million to “best serve the interests of its customers, team members, and stakeholders.” But the story was far from over.

New York City then proposed a broad range of self-storage regulations, which ignited one of the industry’s biggest regulatory battles in years. City officials claimed the laws are intended to strengthen consumer protections, while many operators argued that they go far beyond what lawmakers intended.

Now, the dust has settled. The DCWP announced its decisions Aug. 25. While the industry now has answers to questions it’s been asking for months, understanding the outcome requires looking back at where the battle began—with a unified industry response that went mostly ignored. And what happened behind the scenes may be nearly as interesting as what comes next.

An Industry Presents Its Case

In May 2026, during a public comment period, numerous self-storage companies and associations submitted their opinions of the laws to the DCWP. In a coordinated industry response, virtually every submission stated the department went beyond what Laws 162 and 171 initially authorized, adding a much broader regime covering advertising, facility standards, cancellation procedures, access during default, recordkeeping requirements, and other operational mandates.

“[We have] identified numerous provisions that exceed the Department’s statutory authority or impose compliance burdens disproportionate to their intended benefits,” wrote Brett Nelson, senior vice president of general counsel at Extra Space Storage. “The rules will require operators to undertake costly operational challenges. This is particularly true for smaller, independent operators.”

One of the recurring arguments was that the DCWP misunderstood how self-storage works. For example, operators objected to a “simple cancellation mechanism” that essentially compared a storage unit to a streaming service that could be canceled with the click of a button, which would allow them to exit the agreement and leave their belongings behind; there was no need for that, they countered, when leases were already month to month.

Likening self-storage to living space was also a point of contention. “The Department should remove or revise provisions that apply residential housing concepts to self-storage, impose warehousing-style operational standards, require specialized staffing or certifications, or create unclear compliance obligations,” said Stanley Bonilla, senior vice president of asset management and development for Safeguard.

Operators also found the schedule-of-rates requirements vague, while arguing self-storage pricing is always in flux based on inventory, promotions, market demand, and operating costs. “A static public schedule of rates may not accurately reflect what a specific customer will be offered,” wrote Joe Doherty, executive vice president and chief legal officer for the Self Storage Association (SSA). “As a result, public posting may create more confusion, not less.”

Committing to a maximum occupancy fee 12 months into the future was another issue for operators, who said it could result in inflated rent maximums to provide a buffer against unforeseen cost increases; Extra Space further added that transparency among competitors could lead to effects similar to price-fixing agreements.

The extensive electronic recordkeeping requirements being proposed were also deemed problematic. Tanya Oberoi with Storage Plus wrote, “The cumulative burden of these requirements may require significant investments, particularly for independent and mid-sized operators like us.”

Lastly, numerous operators felt the proposed regulations overlapped with or contradicted existing state lien law, in particular giving tenants in default access to “essential goods” such as medications and important documents. Manhattan Mini Storage summed things up by saying its occupancy agreement already prohibited storing these items: “Self-storage units are not safe deposit boxes.”

NYSSA Vs. DCWP

Before Aug. 25 put things into perspective, MSM called and emailed the DCWP and Mayor Mamdani’s press office, but those inquiries went unanswered. Two representatives from NYSSA, Board Chair Adam Steckler (COO of StorageMart) and Immediate Past Chairman Joe Coakley (President of Cayre Equities), had much more to say.

“Licensing wasn’t an issue—you need a license for everything in New York, even dog walkers,” said Coakley. “Otherwise, these were calls for pricing transparency, 60-day notices for rent increases, and a few other basic things that really weren’t onerous at all. Not that we’re thrilled self-storage is being targeted, but again, [it’s] pretty straightforward stuff.”

Steckler and Coakley then provided a little more context around their issues with the proposed schedule of rates. Their legal argument was that the lease already has that information; if a potential tenant didn’t like it, they didn’t need to sign it. But the DCWP wanted this schedule published before reviewing the lease and hadn’t clearly defined what would be provided. They also elaborated on the idea of comparing self-storage to living space. “Once one rule makes a correlation to livable space, such as applying residential allergen hazard concepts to self-storage, other rules may do the same,” said Steckler. “Then what comes next, rent control? It’s a slippery slope, so we need to make sure self-storage continues to be characterized properly.”

Steckler also questioned how the complaints that sparked the Extra Space lawsuit had been handled. “Much of that lawsuit was based on unvalidated 3-1-1 complaints [non-emergency complaints that, among other things, may include landlord maintenance issues, mold, and pest infestations]. I would say these were not properly investigated, the complaint was extremely vague, and in most cases the operator wasn’t properly notified. From what I saw, they read more like someone had a bad cup of coffee at a diner versus a legitimate complaint.”

Coakley agreed, stating many of the allegations likely could have been rectified with a simple conversation had any type of outreach been done. “We wish they would open a case, contact you, and the operator could resolve it. That’s not what happens, but it would certainly save us all a lot of headache.”

Giving Coakley some cause for optimism was the outcome the NYSSA achieved when previously fighting local laws drafted by the city council. As originally written, they were much more burdensome and potentially damaging to the industry. The NYSSA was able to work with both the council and bill sponsors to reframe and redraft the laws into something much closer to something the industry could live with. In fact, the council even created a separate section in the general obligation law redefining self-storage so that it wasn’t lumped in with storage warehouses and other unsimilar entities. “If we can do that again, we may not have to take this to court,” said Coakley. “Of course, I think the City Council was a little more business friendly. The challenges we have are with the DCWP, which issues and governs the licenses themselves, and our concern lies in the language of those rules.”

Without knowing what the outcome would be, Steckler’s recommendation that NYC operators apply for their business license as soon as possible would prove prescient. “I don’t believe there’s any expectation that if the rules are adopted on August 25^th, operators must be in full compliance on the 26^th, but it doesn’t hurt to prepare. We’re also recommending they start looking at pricing transparency—how they present things to the customer, how they communicate the deal, and when the deal expires.”

Ultimately, Coakley felt there should be accountability on both sides. “The consumer must be held accountable for entering into an agreement, and the operator must be accountable for the way it was drafted. In this current administration, the balance has shifted, with too much onus falling on the operator side.”

“There’s a contractual relationship with tenants, but it’s month to month,” added Steckler. “The customer can always pack up and leave without a moment’s notice, so there needs to be more education on that, which is a goal of the NYSSA.”

Before signing off the call, Steckler and Coakley made it clear that if things went sideways the NYSSA was prepared to take legal action against the city. “We’ve already sought legal counsel,” said Steckler. “We’re not looking to pick a fight if we don’t have to; a lawsuit is the least desirable action. We’d rather sit at the table, negotiate, and come to an agreement. But if there’s no compromise, we will have to challenge regulations that we believe are simply not appropriate for the industry.”

The Calm Before The Storm

As Aug. 25 loomed, MSM wanted to take the pulse of the industry. While CubeSmart declined to comment and Public Storage did not respond, Extra Space, which turned in one of the most detailed submissions during the comment period, provided the following statement. “In regards to the licensing and registration requirements in New York City, we are monitoring developments, we have started to file the paperwork for licensing, and we remain fully committed to being in regulatory compliance,” said McKall Morris, director of communications. “But, as a leader in the industry, we will continue advocating for fair, practical, and balanced policies for self-storage operators.”

Maurice Pogoda, president and founder of National Storage Management, zeroed in on the pricing transparency aspect of the rules. He had been very vocal about this in the past and his position hadn’t changed. “I’ve been saying for years that some of the industry’s increasingly aggressive ECRI practices would eventually attract unwanted attention from regulators.”

While Pogoda said he believed dynamic pricing was a legitimate business tool, and New York perhaps an extreme example, there comes a point where customers begin to feel they’re being treated unfairly. “Look, the vast majority of self-storage operators are responsible business owners that provide a valuable service and treat their customers fairly. My hope is that this situation encourages our industry to strike a better balance between maximizing revenue and maintaining transparency, fairness, and customer goodwill.”

John Lindsey, co-founder and president of Lindsey Self Storage Group, said the $1.7 million message Mayor Mamdani and the DCWP sent the industry should be a wake-up call to some operators. “Self-storage has become essential infrastructure for people navigating moves, downsizing, divorce, and disaster recovery,” he said. “That role comes with a level of trust that has to be earned, and this settlement is a reminder that cities are increasingly willing to step in when it isn’t.”

ECRIs have now become a regulatory and reputational liability, Lindsey added, not just a source of customer complaints. He also speculated that, regardless of the NYC outcome, facility and unit maintenance could increasingly transform what was a purely operational issue into a potential source of litigation. “Operators across the country should get ahead of this now. NYC won’t be the last city looking to license this industry.”

U-Haul CEO Joe Shoen, who implemented a one-year rate-lock guarantee in March to separate his business from those he believes engage in deceptive pricing practices, felt the city’s regulatory response up to that point had been proportional to the problem. “We did this to ourselves, and now we’re paying the price because of the REITs’ aggressive pricing strategies,” said Shoen. “This is a customer service business, and we all understood that in the early days of self-storage. But then Wall Street players came in, and now the big guys treat self-storage like a real estate business—a cash cow to be milked.”

Shoen said it was time to deal with the consequences rather than blaming customers or government; he used the recent tainted lettuce outbreak as an analogy. “After hundreds of cases of intestinal illness, the FDA set its sights on Taco Bell. What did Taco Bell do, sue the FDA? No; they issued apologies to the public and implemented new standards of quality control. But when government agencies focus on our largest players, what do they do? They lobby and consider suing the city. I say, clean the lettuce instead!”

Once legislators had taken a bite of the Big Apple, Shoen also predicted other cities would follow suit. “I’m 77 years old and I’m so proud to be part of this industry—I saw it get started. But I can also foresee a time when it’s no longer around if we continue down this path, so I regret not speaking out sooner. These operators who’re digging themselves into a hole: Stop crying about being picked on and put down the shovel.”

A final perspective came from RK Kleibenstein, who told MSM in a March interview that customers complaining about ECRIs could have chosen an operator that was going to give them a one-year price guarantee, but they wanted the discount. “We learn in exit interviews that most people don’t think they’re going to stay very long. When they do and the price goes up, they look for someone to blame. Publicly traded companies are beholden to analysts and shareholders, so they execute accordingly. They’ve been able to convert a good majority of customers into higher-paying tenants with introductory pricing, so the proof is in the pudding.”

The Verdict Is In

As expected, the DCWP released its Notice of Adoption on Aug. 25. However, implementation is staggered, with some provisions taking effect 30 days after publication in the City Record and others delayed until Nov. 1 to give operators additional time to comply.

In the end, a handful of concerns were addressed and others resulted in compromise. However, several of the industry’s most central objections were rejected outright.

Unsurprisingly, the fundamental licensing and pricing-transparency requirements remained fully intact. This includes giving tenants at least 60 days’ notice prior to a rate hike and prohibiting the collection of fees not included in the schedule of rates without prior notice. These provisions had been established by the underlying laws and were never seriously in dispute.

The department did, however, make 11 changes following the public comment period. A few were clear victories, for example, eliminating the simple cancellation mechanism and removing targeted promotions from the master schedule of rates.

Other concerns resulted in compromise. Rather than broadly allowing delinquent tenants access to retrieve “essential goods,” the final rules were defined and limited to prescription medications and government identification, with facility staff having the ability to retrieve the items rather than providing access to the unit.

Cleanliness requirements were similarly softened but survived. Certifications that had been required weekly must instead be performed monthly, and remediation may be completed by a third party. But the industry’s larger objection to applying residential allergen standards to self-storage went nowhere. “The Department disagrees,” the DCWP stated, reasoning that because household goods travel between storage facilities and residences, the same policy should apply.

Operators didn’t fare much better on pricing. The DCWP clarified the previously vague schedule-of-rates requirement by creating separate consumer and master schedules, but retained the requirement that operators disclose the maximum occupancy fee a tenant could face during the following 12 months. It also rejected concerns that pricing disclosures could have anticompetitive effects, stating that transparency promotes competition and allows consumers to compare operators’ histories of price increases.

Recordkeeping requirements remain extensive, with the caveat that operators no longer must produce records “immediately” upon request. And while the DCWP narrowed the retrieval provision for tenants in default, it rejected arguments that the final rule conflicts with New York’s Lien Law.

Perhaps the biggest blow was the department’s rejection of the industry’s assertion that many of the regulations exceeded the authority granted to it under Laws 162 and 171. The DCWP maintained that the licensing laws gave it broader regulatory authority under the city’s Administrative Code and that existing consumer-protection law provided additional authority to prohibit unfair trade practices.

In short, the industry was able to change how several regulations will work, but it was unable to change what the DCWP intends to regulate.

What Comes Next?

When this story was drafted in early August, the conclusion asked the question, “What comes next?” with the knowledge that the answer would arrive just three weeks later. Now that there’s been a resolution, why end on that same question? Because it still feels relevant. Prior to Aug. 25, the NYSSA said it had already sought legal counsel. Is the association ready to get back into the ring?

“Given that DCWP did not take into account the bulk of our concerns, we prefer not to comment further at this point, except to say we are considering our options to ensure we are protecting the best interests of our industry,” Coakley responded via email.

It’s a pivotal moment for self-storage, and operators across the country will be watching closely to see what happens next. From the sounds of it, the dust may not be settled after all.

—Brad Hadfield is MSM’s lead writer and web manager.

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