The Democratic primary candidates for mayor all agree: the city faces a housing cost crisis. Brad Lander says it requires declaring a “state of emergency.”
Andrew Cuomo fears losing the “soul of our city.” Scott Stringer insists “the housing system is broken.” Unfortunately, the solutions which they — and especially Queens Assembly member Zohran Mamdani — offer will only make matters worse.
They’re ignoring the financial distress of private residential property owners, many operating at a loss, which could lead them simply to walk away from their buildings and bring New York back to the 1970s days of “the Bronx is burning.”
What’s more, they overlook the damage and high costs of their preferred solution: still more subsidized, rent-regulated “affordable housing.”
By far the most potentially dangerous idea is the centerpiece of the Mamdani campaign: a freeze on all rent-stabilized rents.
A rent freeze would be a quick way to drive those struggling small landlords out of business altogether. That’s what the city’s Rent Guidelines Board, which sets the rents for nearly a million rent-stabilized buildings, heard at its April 10 meeting.
They were told by Mark Willis of the Furman Center on Real Estate at NYU that owners of rent-stabilized properties in The Bronx are, on average, losing a stunning $120 per month on every apartment, such that 200,000 units, concentrated in that borough, are under “severe distress.”
Their income has simply not kept up with rising costs — property taxes and utilities, whose prices are definitely not frozen.
They’ve been hit hard, too, by the 2019 state Housing Stability and Tenant Protection Act, which limited any rent increases even for building improvements. Yet Mamdani asserts that “our government works for the landlords.”
Ann Korchak, who heads the Small Property Owners of New York, disagrees. “The costs of everything are rising. We’re not in a vacuum. A freeze would crush us. You’d see foreclosures and abandonment.”
A squeeze on operating income also decreases the value of a building, and makes banks unwilling to make loans for repairs.
It’s a vicious downward spiral — that’s already left rent-stabilized buildings in bad shape.
In its 2023 New York Housing and Vacancy Survey, the Census Bureau found that rent-regulated buildings had higher rates of rodents, leaks, mold, and heating breakdowns than market-rate units.
These are the real housing emergencies.
Eric Adams has at least acknowledged the tension between tenants’ costs and building maintenance.
He’s defended a potential 1.75 to 4.75% rent increase approved by the RGB as “protecting the quality of rent stabilized homes as costs continue to rise without overburdening tenants with unreasonable rent increases.”
Instead, Democratic Socialist Mamdani proposes to “unleash the public sector” and build 200,000 new units of public housing — despite the fact that NYCHA has struggled to maintain its existing 177 properties and faces a multi-billion-dollar repair backlog.
Nationwide, public housing authorities, including NYCHA, are turning to the private sector to renovate and manage their buildings, not returning to Mamdani’s Stalinist housing socialism.
The debt financing he’d use would drain city funds from schools, parks, and police.
Even less extreme Democrat proposals threaten to perpetuate housing problems.
Cuomo, Lander, and Stringer all advocate building hundreds of thousands of costly new “affordable” units, which, in exchange for property tax abatements, will be rent-stabilized.
As those units age, they’ll face the same revenue problems as older buildings in The Bronx. And they’ll distort the city’s housing market in a way that locks out talented newcomers the city needs.
The proposed units are also costly, at least $500,000 a piece.
Per Census data, turnover in rent-regulated units is half that of market-rate units, one of the reasons the city’s overall turnover is 46% lower than the national average.
That helps explain why the city’s vacancy rate is so low and young adults must double and triple up in small apartments while Boomers age in place with empty bedrooms.
Then there’s “inclusionary zoning” — a centerpiece of Council Speaker Adrienne Adams’ housing policy. It actually drives up rents.
Requiring that 20% of units be “affordable” means that rents must be higher for the market-rate units for construction to make financial sense.
MediaPunch / BACKGRID
Smart Democrats are backing what’s been dubbed the “abundance” agenda, which emphasizes the importance of building, not just redistribution. They should realize we need to encourage the construction of any and all housing.
More supply will bring down the price of new housing and old, and help to meet demand. That would actually solve the housing crisis.
Howard Husock is a senior fellow at the American Enterprise Institute.
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