New York survived the 1970s fiscal crisis, Black Monday of 1987, the Crown Heights riots of 1991, the terrorist attacks of 9/11, the Financial Crisis of 2008 and eight years of Bill de Blasio.
It will also survive Zohran Mamdani, who likely clinched a four-year term as mayor Tuesday night. The question is, how painful will it be?
Let’s take it one issue at a time, starting with the biggest loser of all.
Rent-stabilized buildings: Mamdani’s No. 1 campaign promise was to freeze rents. He meant only rent-stabilized units, but they are half of the rental market and were already in trouble after 10 years of below-inflation rent increases and the virtual end of deregulation in 2019.
Most apartments in pre-1974 multiple dwellings are rent-stabilized, as are tens of thousands of units in affordable housing and 421a buildings.
Mamdani cannot directly control rents. But will his Rent Guidelines Board appointees, who will ultimately fill all nine seats, follow the mayor’s instructions or the law?
They are supposed to make decisions based on data, but as de Blasio pointed out a few days ago, they don’t. The mayor gives five members his decision and they make it happen. A lawsuit to stop them would be a long shot.
Landlords were better positioned to survive de Blasio’s three rent freezes in eight years than four consecutive years of freezes now, as Mamdani has pledged.
The next mayor insists that rent-stabilized buildings’ profits increased last year and that if owners were struggling, more would have applied for city and state programs. But he is aware, or soon will be, that those programs are often useless. Fixing them might not be a priority for Mamdani, whose base is opposed to anything that helps landlords.
Look for the industry to turn to Albany, where some newer legislators and Gov. Kathy Hochul are sympathetic to their plight. But 2026 is an election year for them, and given Mamdani’s victory, they will not likely assist landlords for fear of losing their seats.
In the interim, expect more rent-stabilized distress. Over the past two years, the distress rate for securitized New York multifamily loans has more than doubled to 14.4 percent, per Kroll Bond Rating Agency data. And 90 percent of New York multifamily debt (totalling $1.8 billion) is tied to properties subject to some kind of rent restriction, according to Trepp. These statistics are from March, and figure to only get worse.
485x: The state-authorized property tax break for New York City apartment projects has underproduced, thanks to a union-backed wage scale that kicks in when developments reach 100 units.
Mamdani, a fan of construction unions (even though most endorsed Andrew Cuomo), seems unlikely to ask Albany to weaken the 485x wage scale next year or ever.
One promising sign is that Mamdani said he had changed his mind about private development and now believes it is essential to easing the housing shortage.
However, he is likely to advocate for affordability mandates that keep production well below the 50,000 units per year that the city needs. His housing agenda, which one developer called an “unmitigated disaster,” had a numerical goal only for union-built social housing.
J-51, Article XI, rental vouchers, etc: Like any socialist, Mamdani loves government programs. So does the real estate industry, but only if they work for property owners. Many of them don’t.
Mamdani is certain to smash the voucher limits erected by Mayor Eric Adams, to the delight of landlords and the City Council. But it is far from certain that he will find enough money in the city budget — which by law must be balanced — to fund all the vouchers promised by the Council.
A crucial question is whether Mamdani will push to allow rent-stabilized owners to accept the full value of vouchers. His tenant-advocate base opposes this, but these activists would not fight their new hero on such a change. Tenants themselves would support it, because it would let them outbid non-voucher-holders for rent-stabilized apartments.
Rezoning: Mamdani wants to upzone to allow for more housing, especially in wealthy neighborhoods, and to end parking mandates for projects.
Developers and land owners would be thrilled to see him do that, but many upscale areas have historic districts, where the Landmarks Preservation Commission limits building heights and increases construction costs. That is one reason why the Soho/Noho rezoning has yet to yield much new housing.
All 11 landmarks commissioners are mayoral appointees, but it would be shocking if Mamdani stacks the agency with YIMBYs who allow towers in places like Greenwich Village and Park Slope. Even if he did, preservationists would challenge every decision in court.
Still, lots of non-landmarked areas could be upzoned and rid of parking requirements, including Mamdani strongholds such as Bushwick and western Queens. Mamdani could conceivably join pro-housing groups in pushing the City Council to do that. He could get a boost if voters in November approve land-use reforms recommended by the City Charter Revision Commission.
Israel, crime and socialism: The real estate community is very supportive of Israel, the NYPD and capitalism, all of which rub Mamdani the wrong way.
But to govern effectively, he will have to ensure Jewish New Yorkers that he is not anti-Semitic or soft on crime, and to tolerate capitalism — the generator of the tax revenue that Mamdani is so eager to spend.
He signaled as much during the campaign, but very quietly. He toned down his rhetoric about “genocide” in Gaza and said he would not defund the police.
To be sure, he did not want to upset his base and dilute his message, which focused on free buses and child care, a rent freeze, city-run supermarkets and $100 billion worth of social housing.
The industry also hates taxes, which Mamdani wants to raise, but Albany controls taxation and will not raise taxes in an election year. Gov. Kathy Hochul and her Republican opponent will also promise to hold the line on taxes.
Real estate people who despised de Blasio will not likely warm up to Mamdani, who has called de Blasio his favorite mayor. But the industry made money during the de Blasio years, at least until Covid. Except for rent-stabilized owners, real estate will likely do well enough under Mamdani, albeit in a constant state of discontent.
Read more
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“Unmitigated disaster”: Socialist’s $100B housing plan
