Zohran Mamdani and Housing Policy: A Developing Story …

Zohran Mamdani’s four-year tango with the commercial real estate sector has the makings of a classic love-hate relationship.

The Democratic Socialist state lawmaker swept into power by centering his campaign on the city’s affordability crisis and promising to freeze rents while investing $100 billion to build 200,000 new homes. 

But his proposals have deeply divided property owners. Affordable housing developers have hailed Mamdani’s goal to triple the number of subsidized homes constructed annually and his pledge to cut red tape within city agencies.

The city’s real estate titans, many of whom backed Mamdani’s mayoral opponent Andrew Cuomo, have bristled at his plans to push for higher corporate and income taxes, and worry about his approach to public safety. Residential landlords warned that a lengthy rent freeze on their rent-regulated units would tip their multifamily properties into bankruptcy.

“The industry is pragmatic, not ideological, and is quantitatively based,” Jordan Barowitz, a principal at Barowitz Advisory and a former executive at The Durst Organization, said. “So, when numbers pencil out they’re happy, and when they don’t they’re sad.”

Mamdani knows that winning over one of the city’s top industries will accomplish some of his affordability goals. Over the past few months, he has met with prominent real estate CEOs and attended roundtables with developers to hear their concerns. His recognition of the private market’s role in solving the city’s housing shortage, and early appointment of Dean Fuleihan as first deputy mayor while retaining Jessica Tisch as police commissioner, may soothe their anxieties. 

But the challenges Mamdani faces are immense. He will need cooperation from Albany, N.Y., for any changes to city tax rates. Plenty of other barriers prevent the construction of subsidized housing at the scale that Mamdani wants. And President Donald Trump has threatened to withhold federal funding if he is unhappy with the new mayor, which could cripple the city’s budget.

“We’re still dealing with a fragile COVID recovery and lots of economic uncertainty from Washington, so it’s far from an ideal time to raise taxes,” one real estate executive told Commercial Observer. “Appointments and execution are the biggest steps [Mamdani] can make, but the taxation side of the equation will keep business and real estate appropriately paranoid.”

One of Mamdani’s most enduring campaign slogans was to pause rents on the city’s 1 million rent-regulated apartments. 

He can’t ice rents directly, but Mamdani will have the power to appoint like-minded members to the city’s Rent Guidelines Board. This year, the board voted to increase rents by 3 percent on one-year leases and by 4.5 percent for two-year leases. It’s the fourth straight year the Rent Guidelines Board has approved a rent increase.

Mayor Eric Adams is considering appointing as many as five new members to the nine-member board before his term expires on Dec. 31. But tenant groups are pressuring candidates to refuse the position, while Mamdani could seek to remove them next year.

Beyond the political machinations, multifamily landlords warned that the new mayor must also address the rising costs of maintaining their properties. Insurance for rent-stabilized buildings skyrocketed 150 percent between 2019 and 2025, while maintenance costs jumped 39 percent and utility bills rose 31 percent over the same period, according to a New York University Furman Center report.

“The rent-stabilized housing stock is in a precarious position,” Barowitz said. “If there is going to be a rent freeze, we need to think about providing relief to owners for expenses.”

Mamdani has promised to help landlords lower their operating costs through city subsidies and to tackle property tax reform to lower their tax burdens. But property owners have not utilized existing programs that offer cash subsidies to lease out their vacant apartments because they are unworkable.

“What [the Mamdani team] doesn’t understand is that this housing is struggling, but cash infusion will not save it,” Kenny Burgos, CEO of the New York Apartment Association, which represents city landlords, said. “You can’t ask property owners to put money into an apartment that won’t see a return and then operate that very apartment at a monthly loss. It fundamentally doesn’t work.”

Carlina Rivera, who left the New York City Council this summer to lead the New York State Association for Affordable Housing, said that the city must set up the right infrastructure to help distressed buildings where operational costs are outpacing rental incomes. 

“There are plenty of people in the industry who want to come together to bring costs down,” she said. “Construction costs are high, and we want to make sure some of the legislation and ideas are really considered by his team as they put forward their plans.”

Building new homes in a city as heavily regulated as New York is complicated, but Mamdani will assess ways to simplify the process.

On the campaign trail, the Queens Assemblyman frequently spoke about cutting bloat at government agencies and speeding up bureaucratic processes for securing permits, completing safety inspections and issuing approvals. 

The Adams administration tried to improve these processes, allegedly hastening building approvals for well-connected developers to their detriment. One instance drew the FBI’s attention when a whistleblower said Adams pressured the Fire Department to allow the Turkish government to open its Manhattan consulate before resolving the building’s safety issues. 

But many residential developers continue to grapple with long waits to obtain permits that can disrupt construction schedules and increase project costs. 

Camber Property Group founding principal Rick Gropper, who prepared a policy memo on affordable housing for the Mamdani transition team, said the new mayor must improve coordination between agencies that conduct safety and environmental reviews.

“Removing some of the barriers to getting buildings online as quickly as possible has the potential to save hundreds of millions of dollars in carry costs, which ultimately results in the creation of additional housing units that take pressure off the housing stock,” he said.

Rivera has urged the incoming administration to streamline the permitting process by creating a public dashboard for people to see when approvals happen.

“Transparency is something the campaign has been very clear about, and this will help get projects off the ground more quickly, reduce costs and maintain their timelines,” she said.

Mamdani may also look to expedite the housing voucher process, a topic that came up during a roundtable discussion with affordable housing developers before Mamdani’s election. In 2023, the city eliminated a 90-day waiting period for homeless New Yorkers to obtain rental assistance vouchers, but tenants have experienced lengthy waits to move into their new homes due to delays in reviewing applications, inspecting buildings and receiving payments. 

“He was very interested in trying to understand how the government can move people into apartments more quickly,” David Schwartz, co-founder of Slate Property Group, said. “He wasn’t just meeting with us to check a box. He wanted to learn.”

Mayor Adams did leave his successor with a nice parting gift.

In November, voters approved several ballot measures written by Adams’s Charter Revision Commission that will shift power from the City Council to the City Planning Commission to  approve some affordable housing projects, and create an appeals process for proposed affordable developments the City Council rejected.

Mamdani waited until Election Day to support five of the ballot proposals, but it remains unclear how he will use them.

Regardless, he will be busy in the coming months.

“We know they will want to have wins in the first 100 days,” Rivera said. “They’ve been clear about those goals.”