NYC Mayoral Candidate Zohran Mamdani’s Housing Plan

Mayoral candidate Zohran Mamdani is clear about his positions on real estate. But that doesn’t mean he is being honest.

The Assembly member is transparent in one way: He is never going to pose as a friend of developers and landlords, hit them up for millions of dollars and then abandon them — as a certain governor did by giving construction unions veto power over 421a and letting the tenant lobby write the 2019 rent reform.

Instead, Mamdani is wielding his dagger openly, vowing to freeze the rent on every rent-stabilized unit in the city — even though the Rent Guidelines Board has already been reducing their inflation-adjusted rents for years.

“That’s an easy answer if you’re running for mayor and you want to suck up to tenants,” one active developer said. “But it tells me on Day 1 that he’s a joker.”

Another prolific builder called Mamdani “an unmitigated disaster.”

Mamdani’s supporters in the industry can be counted not just on one hand, but on one fist. He’ll sit down with developers but is so sanctimonious that he won’t even accept a cup of coffee, let alone facts about the business.

The show of purity is deceiving. If he were truly being forthright, he would not spin unrealistic narratives that make it even harder to solve the housing crisis. For instance, he pledges to have union workers build 20,000 affordable apartments per year for $500,000 per unit.

But let’s start with his promise to freeze rents. Although all members of the Rent Guidelines Board are mayoral appointees, a mayor cannot guarantee RGB votes as he can for other boards and commissions.

The rent board is required to consider landlords’ expenses. If it froze stabilized rents every year while expenses soared, the city’s housing stock would crater and rent regulation would be at risk. Tenants have already dodged several bullets on the legal front.

Mamdani’s promise perpetuates the myth that the mayor has this power. That does New Yorkers a disservice. It’s impossible to have a productive discussion when one side clings to talking points that are simply untrue. Perhaps that is why activists storm the stage at rent board meetings.

What about the socialist candidate’s primary real estate proposal, to fund and fast-track construction of 200,000 affordable, union-built apartments? He says this would be done in 10 years and cost $100 billion, funded in three ways:

Issue $70 billion in bonds, to add to the $30 billion in affordable housing commitments the city has already made.
Use city-owned land and buildings
Finance construction with currently unused rent vouchers

No. 1: Bonding is borrowing, not funding. Where would Mamdani find $70 billion, plus interest, to repay bondholders? Even if he could defund the NYPD entirely, he would still be short.

Idea No. 2 is so hackneyed, it doesn’t even qualify as an idea. At this point, the city has precious little unused, developable land not already earmarked for affordable housing. Its office buildings are filled with city employees, and converting them to housing would be costly. Plus he’d have to rent office space for the relocated employees. No mention of that in the plan.

What about No. 3? “It’s not a bad idea. It’s being done now all over the Bronx with the old 421a, Option C,” one developer said, referring to units affordable to households earning 130 percent of the area median income.

Using the expired 421a tax break, private firms are putting up bare-bones buildings on cheap land and filling them with voucher holders. “It does pencil,” the developer said — but not with union construction, which adds about 30 percent to labor costs, or where land costs more.

Mamdani would, of course, only use unionized laborers. And 421a has been replaced by a stricter tax abatement called 485x, which developers have shunned. New 421a projects are no longer possible.

Privately built, nonunion affordable housing costs about $700,000 per unit in New York City, not including land costs. That figure will only rise in the future. Yet Mamdani is budgeting $500,000 per unit for union construction over 10 years.

His plan is, in a word, fiction.

Could this get any worse? It can. And it does.

Mamdani told amNY that CityPHEPS vouchers — which often go unused because vacant, eligible apartments are exceedingly rare — would provide more than $3,000 in monthly rent to finance construction. While that has penciled out for some cheap, nonunion, Bronx, 421a projects — in high-opportunity neighborhoods it doesn’t come even close.

Even Bronx land is getting too expensive for projects geared toward voucher holders, one developer said. Another detail Mamdani glosses over is that most of the city is not zoned for large apartment projects and hasn’t identified the billions of dollars all these vouchers would cost.

Mamdani’s plan is for capital expenditures. It is anyone’s guess how Mamdani would subsidize operating costs for his permanently affordable units. The New York City Housing Authority has certainly struggled with that.

On a sociological level, concentrating poverty in Soviet-style housing is not likely to produce good outcomes. Fortunately, Mamdani won’t get to find out. In the unlikely event that he becomes mayor, he would be unable to implement his housing plan. The math simply doesn’t work.