Zohran Mamdani, a state assemblyman whose policies unsettled the real estate industry and were criticized as risking harm to New York’s status as a global financial hub, has been elected mayor of the nation’s largest city.
The 34-year-old democratic socialist, whose affordability-focused platform fueled a rapid political ascent, will take office as New Yorkers grapple with concerns over public safety, quality of life, and rising living costs. Market-rate apartment rents have hit record highs, while the city has said rental vacancy is at an unprecedented low of 1.4%, underscoring a housing shortage.
Mamdani defeated former New York Gov. Andrew Cuomo, who ran as an independent after losing the Democratic primary, and longshot Republican candidate Curtis Sliwa, according to projections from the Associated Press. With 89% of the votes counted late Tuesday, Mamdani won 50.4% of the votes, followed by Cuomo at 41.6%, and Sliwa at 7.2%.
The high-stakes contest brought out more than 2 million voters, a record-setting number said to not be seen since 1969.
"You’ve delivered a mandate for change," Mamdani said late Tuesday at a rally celebrating his victory. "We have breathed in the air of the city that’s reborn."
Also Tuesday, a majority of New York voters said yes to three affordable housing-related proposals on this year’s ballot that aim to fast track or simplify review of affordable housing and other projects, setting up a shift in power on land-use decisions. For instance, one of the proposals would pave the way for the creation of an affordable housing appeals board that could reverse City Council decisions.
New mayoral administration
Mamdani replaces outgoing Mayor Eric Adams, the former police captain who decided to end his bid in September after a federal corruption case and financing issues weighed on his chances for reelection.
Mamdani, the front-runner for months, has sparked what some describe as deep concern among real estate investors, business leaders, and a number of New Yorkers. There is fear the city could lose residents to other markets, while its reputation as a safe haven for investment may erode under what critics view as heightened risks in a Mamdani administration.
Spencer Levine, president of New York-based developer RAL Cos., told CoStar News in an email Tuesday that he expects there'll be "an immediate negative knee jerk reaction" from both commercial and residential property owners while "adjacent suburban regions will benefit from an immediate flight."
Levin added that "until the administration officials are identified I expect a bit of panic in the city, but I suspect there will need to be a moment of understanding where Mamdani nominates some career professionals, which depending on the appointments, should stabilize the reaction. He needs 'adults in the room' to help drive programs to deliver results for lofty aspirations."
He said New York may "see an immediate pivot" to "satellite offices" for major companies, but said "in the long run no one is leaving" the city and "it's still the center of the commercial world."
The industry's top lobbying group, the Real Estate Board of New York, said in a statement it's "prepared to work with the next mayor to address the issue of housing affordability and other challenges facing our city.”
Policies bring some concern
Some 9% of New Yorkers said they would “definitely” leave if Mamdani became mayor, while another 25% said they would “consider leaving,” the Daily Mail reported Monday, citing an exclusive survey conducted by polling firm JL Partners for the publication.
Among some of Mamdani’s criticized proposals, he’s vowed to freeze rent on about 1 million rent-stabilized apartments at a time when studies have found landlords of those units face rising delinquent loans as expenses have risen at double the rent growth rate.
Mamdani, who also promises free buses, universal childcare, city-owned grocery stores, and a minimum wage hike to $30 an hour by 2030, wants to fund his agenda by raising the top state corporate tax to 11.5% from 7.25% while levying a 2% income tax on people earning over $1 million. He's said he wants to “require the wealthiest New Yorkers to pay their fair share.”
Million-dollar earners — less than 1% of New York’s tax filers — contribute about 40% of both state and city tax revenues, according to the Citizens Budget Commission. The nonprofit think tank warned that raising taxes on the wealthy could undermine “New York’s value proposition” and accelerate the city’s shrinking share of millionaires.
“This is a major blow to New York City and could be the final nail in the coffin," Greg Kraut, co-founder and CEO of New York real estate firm KPG Funds, told CoStar News after the results. "He offered a lot of free stuff. Let's see how he'll pay for it."
It doesn't take that many billionaires to leave the city to see a meaningful impact on the city, he previously told CoStar.
Still, the real estate industry is betting on several checks and balances against what Mamdani campaigned on. For instance, a number of his proposals would require approvals from state and city bodies.
Economy first
Worries about Mamdani aside, some economic analysis concluded market forces are stronger than politics.
A recent study from the real estate services firm JLL found New York’s multifamily market performance in the past 25 years was primarily affected by “broader economic conditions rather than any mayor's political affiliation or policies.”
The report found that “market liquidity thrives independent of political rhetoric,” adding that capital flows into the city’s real estate “correlate more strongly with broader economic indicators.”
New York also has “unmatched” market advantages and led the United States in effective rent growth thanks to factors including a supply shortage and the fact it remains a top destination for where college graduates want to live, JLL said.
"If Mamdani wins, I don’t believe four years in City Hall will derail New York’s extraordinary momentum," Michael Rudder, principal of his namesake commercial real estate services firm that specializes exclusively in the sale of office condominiums in the New York metropolitan area, told CoStar News ahead of the election. "The city’s trajectory is driven by forces far bigger than one mayor, a once-in-a-generation recovery in the office market, an estimated 40 million square feet of office-to-residential conversions, and massive new office and housing construction,” he said.
Still, if capital is being pushed away from New York and less people are investing in the city, that “will lower property values and liquidity,” Rudder said. Demand for top-tier office in the city also hasn't shown any slowing signs even with the prospect of a Mamdani win, Vornado Chief Executive Steven Roth said on the company's third-quarter earnings call Tuesday.
“We have not seen any pullback or hesitancy in space demand from our customers,” Roth said on the call, adding the stock market also hasn’t given “any canary in the coal mine indication.”
Industry executives also said any drastic change in how developers and investors pursue their strategy is also not likely to occur in the short term.
“I think people will give him a chance,” said Jeff Gural, chairman of GFP Real Estate, a major New York real estate firm with a portfolio that includes the iconic Flatiron Building. “I don't think people are going to wake up on Jan. 1 and say, ‘Let's relocate to someplace else.’”