Zohran Mamdani, a 33-year-old New York State assemblyman, staged an upset victory in the city’s Democratic mayoral primary with a campaign platform that could have big effects across the real estate community if he's elected mayor this fall of the largest U.S. city.
Mamdani, a Democratic socialist, placed first in Tuesday's election with 43.5% of the vote, beating former New York Gov. Andrew Cuomo with 36.4%, according to reports. That sets up Mamdani to be the likely New York mayor in a predominantly Democratic city. Once results are official, Mamdani likely would face candidates Nov. 4 including Curtis Sliwa, who had no rivals in the Republican primary, and current New York Mayor Eric Adams, running as an independent.
If Mamdani wins the mayoral race, his call for tougher rent control and landlord regulations, an aggressive push for more residential construction and support for city-owned food stores are set to lead to policy decisions that could affect development and business sentiment across New York, according to industry professionals.
As New York contends with what CoStar data shows as record-high market apartment rents and near record-low vacancy rates, housing and affordability surfaced as a central part of Mamdani’s platform in the primary campaign. He has said he seeks to freeze rent for the city’s nearly 1 million rent-stabilized apartments and triple the city’s production of “permanently affordable, union-built, rent-stabilized homes” by building 200,000 new such units over the next 10 years as part of a $100 billion investment he promised to come from the city, according to his campaign platform.
He also said the city will step in to make housing repairs and bill a landlord if an owner refuses to perform the necessary work. The city will take control of an owner’s property if “an owner demonstrates consistent neglect for their tenants,” according to his platform.
Mamdani's positions have been formed from his more than four years as a state assemblyman based in Queens and representing the 36th Assembly District that includes the Astoria, Ditmars-Steinway and Astoria Heights neighborhoods. He was born in Kampala, Uganda, and moved to New York City with his family when he was 7. Mamdani attended public schools in New York City including the Bronx High School of Science and earned a Bachelor’s Degree in Africana Studies from Bowdoin College. He became a naturalized U.S. citizen in 2018.
Before he entered politics, Mamdani served as a foreclosure prevention housing counselor and helped low-income residents fend off evictions. "It was this job that led him to run for office," according to his online Assembly biography. He also dabbled in what his biography describes as "detours in film, rap and writing." He is married to Rama Duwaji, an artist from Damascus, Syria.
Freezing rents
Mamdani's stance on freezing rents comes as the city’s nine-member Rent Guidelines Board is scheduled to have a final vote that will determine the range of a rent increase for the city’s rent-stabilized stock as inflation and other economic pressures affect both landlords and tenants in one of the world’s most expensive cities.
It also comes as developers and other industry professionals have said the city’s 485X tax abatement program, an initiative centered on a tax incentive to encourage new development in exchange for a portion of the units being set aside for affordable housing, is discouraging construction of new apartment buildings with at least 100 units because of related wage and other requirements.
“Nowhere in the law does it say the mayor has the power to force the 9-member, independent Rent Guidelines Board into premeditated rent freezes,” New York Apartment Association CEO Kenny Burgos said in a statement issued ahead of the primary results. The association represents owners and operators at the city’s rent-stabilized apartments.
Burgos also said of the Rent Guidelines Board that “promising to force the board to freeze rents before reviewing a shred of evidence isn’t leadership, it’s blatant abuse of process and the law. … It would be a dangerous precedent if a mayor blatantly ignored the law and abused their power to destroy the independence."
The potential rent freeze comes after the New York Post reported in May that thousands of rent-stabilized apartments in the city were already facing a foreclosure threat as a growing number of landlords stopped paying their mortgages.
To be clear, the idea of a rent freeze isn't new. Former New York City Mayor Bill de Blasio previously froze rent-stabilized apartments rents three times.
"The clear impact would stem from the result of a promised rent freeze for rent-stabilized tenants,” said Victor Rodriguez, a senior director of CoStar Market Analytics, in an interview. “While this has been echoed by real estate backers of Cuomo as a catastrophic event, that might be more perception than reality as three rent freezes have occurred in just the past decade alone."
While a rent freeze is “less ideal for owners,” it would not be “catastrophic,” Rodriguez said.
Public safety critical
Another Mamdani campaign pledge that could have broader ramifications for New York real estate and other businesses is his idea to create a “department of community safety."
The pledge to create the new department comes as New York continues its recovery from the pandemic. Studies have shown public safety remains a major concern for businesses as employers want to get more employees to return to the office.
Mamdani also has said he wants to create city-owned grocery stores, provide free childcare and city bus rides and raise the minimum wage to $30 an hour by 2030. The current minimum wage in the city is $16.50 per hour.
To fund these initiatives, his platform called for an increase in corporate tax rates and the implementation of a flat 2% tax on New Yorkers who earn above $1 million annually.
“In November voters will need to choose between practical or fanciful and extreme ways to continue the drop in crime, build much necessary housing and create good jobs,” James Whelan, president of the trade association the Real Estate Board of New York, said in an emailed statement to CoStar News. "Based on candidates' campaign platforms, REBNY will continue to focus on data-driven policy analyses and proposals and urge candidates to do the same."
New York Gov. Kathy Hochul said recently that she does not support Mamdani’s tax-hike plans.
“I don't want to lose any more people to go to Palm Beach," Hochul told local television network Pix11 on Saturday. “We've lost enough. We had a major outmigration. … Driving them to Florida does not help us. So let's be smart about this.”