Mamdani Momentum Sets up Landlord, Homeowner Fights

20 minutes read

In the first six months of Mayor Zohran Mamdani’s administration, the new mayor has ridden a “green wave,” the moniker the Department of Transportation chose for a string of carefully timed green lights that cyclists can hit when pedaling down certain Manhattan avenues.

Mamdani’s early about-face on the role of private developers bolstered his ambitious agenda to build 200,000 affordable homes and preserve another 200,000 over the next decade. That early pivot also marked a key first step in a a series of opportunities for the mayor to claim progress toward his lofty housing goals.

“We are leaving no stone unturned in developing and implementing our housing plan, Block by Block, delivering the all-of-the-above approach that is necessary to create a fairer, more affordable city,” a City Hall spokesperson said in a statement. “We have already laid the foundation for meaningful progress on housing relief, including making historic investments as part of Mayor Mamdani’s first budget in building and preserving affordable housing and in NYCHA.”

But the question remains how long the mayor can sustain momentum as the difficult task of implementation ramps up, with challenges ahead rolling out his hallmark pied-a-terre tax, rent freeze, voucher expansion and other controversial policies with outsized impact on real estate.

The past month offered a snapshot of the mayor’s fortuitous timing during his half-year in office.

At first, a fight with City Council threatened to derail budget negotiations, but after a euphoric mid-month celebration of the Knicks’ first NBA championship win in 53 years, Mamdani claimed three rapid-fire victories: a primary endorsement sweep, the Rent Guidelines Board’s rent freeze vote and a buzzer-beating voucher expansion deal to deliver a nearly abandoned campaign promise.

One day after Mamdani and Menin’s last-minute dealmaking flourish at City Hall, the surcharge on second homes over $5 million quietly went live on July 1, with major compliance questions still unanswered for co-op boards and condo owners who may be subject to the new tax regime. The administration is also likely to face enforcement challenges as it takes on the task of notifying homeowners, collecting payments and extracting penalties for inaccurate reporting.

Even with backing from powerful tenant groups and a likely doubled leftist bloc of state lawmakers shipping up to Albany aligned with his agenda, Mamdani is going to need buy-in from the developers, homeowners and landlords who perceive him as an unproven ideologue aiming to seismically shift New York’s built environment.

Orange and blue skies?

The mayor was quick to stand up affordable housing initiatives, starting on his first day in office with the Streamlining Procedures to Expedite Equitable Development Task Force targeting zoning and permitting, then in March launching the Land Inventory Fast Track Task Force aimed at building faster on city-owned land.

“We are also staffing up key teams, from housing finance to tenant protections to streamlining permitting, to ensure that we are delivering the public excellence that will ensure New Yorkers can actually benefit from our ambitious vision and investments,” the City Hall spokesperson said.

The task forces are aspirational models for a development blitz still in the making, but the administration’s early accomplishments indicate that any sustained success will require close cooperation with real estate, a dynamic fraught with political and financial hazards.

The housing plan from Mamdani and Deputy Mayor for Housing and Planning Leila Bozorg lays out a broad swath of goals to tackle a housing crisis, complete with a five-year $22 billion commitment, which the administration has only begun implementing over the month since its release.

A $1 billion investment in supportive housing from HPD, partially aimed at preserving the existing stock of 30,000 affordable rental units providing services to tenants, debuted alongside plans for the largest “transfer of assistance” senior affordable development on NYCHA property in the Bronx, as well as a major rezoning approval for a megadevelopment with 50 percent affordable units on an MTA-owned site in Brooklyn. In each case, the Mamdani administration claimed early progress on its housing agenda, but the honeymoon phase of this rollout may prove difficult to sustain.

“Given the fiscal situation, I think they’re doing the best they can, and a lot of the housing plan is really going to depend on a strong market response,” said Rachel Fee, executive director of the New York Housing Conference. “Our tax incentives have to work, the new zoning opportunities created under this administration will matter a lot as well.”

The Low-Income Housing Tax Credit expansion passed last year at the federal level, combined with key zoning changes made possible under Mayor Eric Adams’ City of Yes for Housing Opportunity legislation, are already benefiting the Mamdani administration’s ability to address affordable housing gaps.

‘Perfect storm’

As rising costs for maintenance, insurance and utilities are weakening the financial picture for affordable housing across the city, rent-stabilized landlords have been vocal about how a freeze on increases for one- and two-year leases will impact an already narrow bottom line.

“We have a lot of affordable housing organizations with distress in their portfolio, where they’re not bringing enough rent to cover growing expenses,” Fee said. “That’s something the city has to spend more time addressing. If those organizations don’t have a financially sound portfolio, they cannot participate in new construction under the mayor’s housing plan in the way that will be needed.”

Rent arrears and mortgage arrears have both ticked up recently, indicating the cascade of economic issues underpinning binary debates around rising tenant and landlord costs, according to Molly Wasow Park, recently named CEO of the NYC Housing Partnership and former Department of Social Services commissioner.

“Expenses have gone up faster than rents, which have gone up faster than tenant incomes,” Park said. “It’s really a perfect storm, and working on that is going to be my focus as the incoming CEO.”

New supply of both market-rate and affordable units is needed to moderate the growth in rents, working in concert to address demand for households across income levels, according to Hayley Raetz, policy director at the NYU Furman Center.

The city’s Uniform Land Use Review Procedure, which voters approved a ballot measure to expedite and otherwise reform last November, will help developers deliver new units in line with the mayor’s adapted vision of abundance, typically a set of solutions packaged with more centrist politics.

ULURP reform was at the center of another unlikely connection the Democratic Socialist mayor made early in his tenure, which saw him standing in the Oval Office aside a smiling President Donald Trump and a Daily News mockup that read “Trump to City: Let’s Build.” Mamdani’s office announced the meeting as part of advancing a proposal to build affordable housing at Sunnyside Yard in Queens.

Politics vs. math

Affordable developers and nonprofit lenders are facing lower rent collections across their portfolios, with Enterprise Community Partners reporting a decrease from 95 to 90 percent. Meanwhile, insurance costs have been the fastest rising price category for rent-stabilized landlords over the last five years, according to the city’s Rent Guidelines Board.

“I don’t think it’s a politics issue, I think it’s frankly a math problem,” Park said. “This question of who is right, are the landlords suffering or are the tenants suffering, both sides are right.”

One olive branch to landlords from the Mamdani administration takes the form of a publicly-backed insurance option for affordable and rent-stabilized housing. The city is actively soliciting proposals from providers who hope to run the program with premiums estimated at 20 to 30 percent below the existing market rates.

“We believe New York should pursue a balanced approach by protecting tenants while also supporting responsible small property owners through targeted tax relief, expanded access to building improvement financing, and a more efficient Housing Court process that resolves straightforward non-payment cases more quickly while preserving tenants’ due process rights,” Richard St. Paul, president of the New York City Small Homeowners Association, said in a statement. “New York’s housing challenges will not be solved by pitting tenants against small property owners.”

Frozen rents, climbing costs and significant arrears for both sides mean that the friction between tenants and landlords is unlikely to decrease unless further intervention from the Mamdani administration is truly on the horizon to mitigate rising costs like water and sewer rates, which increased 6 percent, effective July 1.

Federal voucher sunset

Tenants and landlords recently found common ground on the issue of housing vouchers, with advocates from both groups and lawmakers across the political spectrum rallying together to call upon the mayor to allow CityFHEPS expansion by dropping litigation leftover from the Adams administration.

Mamdani, who had vowed to drop the contentious appeal during his campaign but changed his tune upon entering office, ultimately reached an 11th-hour compromise with Speaker Julie Menin and the City Council that allocates $300 million to a new housing voucher program administered by HPD as a complement to the existing CityFHEPS footprint, which has ballooned to more than $1.8 billion.

“I am an enormous cheerleader for CityFHEPS, it was under my tenure as commissioner that the program more than doubled,” Park said. “It plays a huge role in the affordable housing space, but it is a very expensive program.”

Despite Mamdani, Menin and some Council members taking the budget deal as an opportunity for a fiscal victory lap this week, the looming sunset of Emergency Housing Voucher funding before year’s end is poised to create a massive rental assistance gap.

“New Yorkers need a government that treats the housing crisis with the scale and urgency that it demands — and that’s what our administration is delivering,” the City Hall spokesperson said.

HPD and NYCHA, which respectively serve 2,000 and 5,200 EHV participant households, have begun efforts to connect them with alternative subsidies to tap into when federal vouchers expire, but meeting the scale of the crisis may prove difficult to pencil out for tenants and landlords.

“Anything that is within a viable dollar number for the city to cover on its own is frankly going to be mismatched with need,” Park said. “Will city government get blamed? Of course, because people blame the person who is right in front of them, but the real responsibility lies with the fact that there was a funding commitment through 2030 that the Trump administration pulled back on.”