NYC’s Next Mayor: What’s Ahead for Housing

There’s at least one thing that all three major candidates for mayor of New York City agree on: the city has an affordable housing crisis. But there are key differences in how they plan to boost the number of affordable apartments and address other important housing-related issues in the nation’s largest metropolis.

Democrat Zohran Mamdani, independent candidate and former Gov. Andrew Cuomo and Republican Curtis Sliwa are running in the Nov. 4 election to succeed Mayor Eric Adams, who dropped out of the race.

“One thing that stands out to me is that all three of the candidates recognize the importance of affordable housing and have housing plans,” Brendan Cheney, director of policy and operations at the New York Housing Conference, an affordable housing advocacy organization, told Multi-Housing News. “We’ve seen in the polls that affordability and housing affordability are leading issues with voters.”

Mamdani, a state assemblyman who has based much of his campaign on making the city more affordable, has received lots of attention for his proposal to freeze rents at approximately 1 million rent-stabilized apartments for four years. He also wants to build more than 200,000 units of rent-stabilized housing over 10 years, including 20,000 in the first year of his term.

Mamdani and Cuomo say that staffing levels at city agencies like the Department of Housing Preservation and Development must be boosted to deal with backlogs and move projects along faster.

Cuomo proposes building more housing across all income levels to increase supply and wants to build or preserve 500,000 new units over 10 years. A proposed $5 billion state-city program of capital subsidies would pay for the new housing. He wants to identify city assets for development, encourage faith-based organizations to develop housing, use rezoning to accelerate development and promote office-to-residential conversions.

Last week, Cuomo released a plan for his first 100 days in office stating that he aims to develop or return to the market 80,000 units of affordable housing. He also called for expanding pension fund investments and getting as many as 50,000 units of vacant rent-stabilized apartments back on the market with incentives.

Sliwa also wants to provide incentives to renovate vacant rent-controlled and rent-subsidized apartments. He proposes repealing zoning changes approved last year under the City of Yes program to return more local control over zoning. Sliwa is also calling for changes to the property tax and assessment systems to make them fairer for smaller multifamily landlords.

Rent freeze, renovation incentives questioned

A four-year rent freeze that’s implemented without a data review by the Rent Guidelines Board is “illegal and irresponsible in many ways,” contends Kenny Burgos, CEO of the New York Apartment Association, which advocates for rent-stabilized landlords.

Such a policy move, he said, “would be catastrophic for the rent-stabilized industry, which has been seeing increasing levels of distress for the past several years, mostly due to the Housing Stability and Tenant Protection Act,” a 2019 state law enacted in 2019. However, he also cited adjustments made over the past 10 years by the city’s Rent Guidelines Board, which have “led to the defunding of this (type of) housing.”

Burgos cited increases in property taxes, insurance, water bills, maintenance and labor costs that have been documented to the nine-member Rent Guidelines Board. In June the board approved a 3 percent rent increase for one-year leases and a 4.5 percent increase for two-year leases. However, Mamdani and others note that the board approved increases totaling 9 percent during Adams’ term.

Mamdani’s rent-freeze proposal may provide short-term assistance but could have unintended consequences for landlords, which may struggle to cover growing expenses, particularly in older buildings, according to Elena Novak, lead real estate researcher & analyst with PropertyChecker.com. That could lead to lower-quality housing if repairs and upgrades are not made.

Brock Emmetsberger, a broker & executive vice president at Matthews Real Estate Investment Services in Manhattan, said Mamdani is proposing tax incentives to compensate for the rent freeze but has provided no details. Those incentives would not account for operating expense increases, he added.

Emmetsberger cited a five-building portfolio he sold in Manhattan’s Chelsea neighborhood where the operating expenses plus taxes totaled about $30 per square foot for the vacant rent-stabilized units, but the highest legal rent the landlord could charge was $10 per foot.

Emmetsberger and Burgos both point to the 2019 HSTPA legislation as contributing to the large number of vacant rent-controlled and rent-stabilized units because it has significantly limited rent increases for renovations. Most estimates put the number at about 28,000 vacant apartments; Burgos says it’s probably at least 50,000.

While incentives for apartment repairs proposed by Sliwa and Cuomo would be welcomed, Burgos said they may not be enough, noting that renovations often run between $70,000 and $100,000 when a unit is turned over.

Providing incentives for repairs may not get those vacant apartments back online, agreed Alex Brito, a Manhattan-based architect with RKTB Architects who has worked on numerous city-sponsored housing developments,

“You do have land and property owners that are kind of stockpiling, because it’s probably just cheaper to write these apartments off in some ways than to renovate them and get something like a 60 percent AMI tenant,” he said.

‘Ambitious affordable housing plans’

Cheney said his group supports “ambitious affordable housing plans” such as those suggested by Cuomo and Mamdani. Other than supporting office conversions, he didn’t see too much regarding expanding affordable housing production in Sliwa’s platform.

“Mamdani gets a lot of coverage and talk about his rent freeze proposal, but for us, maybe more important is his plan to build 20,000 units of affordable housing each year by spending $10 billion a year,” he said.

Cheney notes that about 6,000 units of new affordable housing are constructed each year.

“To go up to 20,000 units, it’s a huge increase in affordable housing production. It’s far more in resources than the other two candidates are planning to put in,” Cheney said.

By comparison, he noted that Cuomo proposes spending $5 billion over five years, or about $1 billion a year in additional funds. Mamdani’s plan would increase annual spending on affordable housing production from $3 billion to $10 billion.

Cheney pointed out that Cuomo’s plan would require the state government to fund $2.5 billion over five years. He questioned whether the state would commit to additional funding.

Brito called Cuomo’s proposal too modest to meet the crisis and Mamdani’s probably unrealistic.

“It would be fantastic if we go to half of those (units Mamdani is proposing). That would be super successful,” he said.

Both plans have challenges, according to Novak.

“Mamdani’s plan focuses on public control and affordability, but managing the finances carefully will be important,” she said. “Cuomo’s plan relies heavily on private developers, which might speed up construction, but it could reduce affordability for low-income residents.”

Early in his campaign, Mamdani said his affordable housing goals could be accomplished without private developers, but Emmetsberger observed that he has recently been talking about having “healthy public-private partnerships.” However, he added, Mamdani has not provided details on what those partnerships would look like.

Sliwa and Cuomo both back increasing the number of office-to-residential conversions. Cheney said it’s a good policy but not enough to solve the housing problem.

Mamdani and Cuomo propose that more city-owned land and properties should be made available for affordable development or redevelopment. Cuomo pointed to the completion last year of a 14-story Manhattan building with a library and pre-kindergarten facility on the first two floors and 174 units of affordable housing.

Those kinds of sites as well as unused space on New York City Housing Authority campuses could yield more housing, Brito suggested. He also noted that the City of Yes legislation provides incentives for faith-based organizations to build affordable housing, an idea Cuomo backs.

Encouraging more faith-based groups to develop housing on their sites would expand the city’s inventory and provide services to the community, said Robert J. Bolton, Jr., president & executive director of The Interchurch Center. The New York City-based organization rents office and meeting space at reduced rates to nonprofits. The step would “bring the needed resources and assistance to a lot of these faith-based organizations that are struggling right now,” he added.

Brito is working with a Bronx church group that owns three properties and plans to tear down the church and rebuild it with senior housing units above. Additional affordable housing would be built on the two other sites.

“That’s gaining ground, mostly through the changes in the City of Yes that encourages (it),” he said.

Sliwa targets City of Yes

However, Sliwa would seek to repeal the City of Yes legislation and restore local zoning control to the boroughs.

Emmetsberger rejected that idea, noting the legislation “went through extensive community review before it was approved.” An extra layer of community review would encumber developers’ efforts to deliver affordable housing, he added.

The biggest pushback to the City of Yes was in residentially zoned areas that don’t want multifamily development, according to Brito. He said Sliwa is appealing to his base in parts of Queens and Staten Island where there is a stigma about affordable housing.

Cuomo supports building in high-density areas but takes a cautious stance on changes for low-density neighborhoods until impacts of higher-density zoning are assessed.

However, Bolton loves the idea of giving control back to the community and local officeholders.

“They have more boots on the ground where they understand what’s needed,” he stated. “We don’t want to open it up wide to where we have this influx of just anything coming in because the zoning has been sort of dismantled.”

But Novak contends that without broader zoning reforms, New York City will continue to have challenges with high housing costs and limited affordable housing.

“The future mayor should focus on rezoning that allows for more flexible, smarter development in both high-demand and lower-density areas, while balancing community concerns,” she said.

The post NYC’s Next Mayor: What’s Ahead for Housing appeared first on Multi-Housing News.

---

Gillian Executive Search is a leader in Affordable Housing Development, Financing, Design and Construction recruiting. www.gessearch.com