When 33-year-old Assemblyman Zohran Mamdani secured the Democratic nomination for mayor, he did so on a platform laser-focused on housing affordability. His signature campaign proposal - a citywide freeze on rent increases for approximately one million rent-regulated apartments - has drawn significant support from tenants and progressive voters. However, the implications of such a policy are far-reaching and have generated considerable concern among real estate professionals, economists, and business leaders.

While a rent freeze would offer immediate financial relief to tenants in stabilized units, critics argue that it could exacerbate the city’s already tight rental market. Limiting revenue potential in rent-regulated buildings may reduce landlords’ incentives to maintain or invest in their properties, potentially accelerating physical decline. Furthermore, by locking up existing inventory, the policy could shift more demand onto the unregulated, market-rate rental sector - where pricing is already strained - driving up rents for newer residents and younger renters.

High-income earners, particularly those making over $1 million annually, could also be affected by Mamdani’s broader fiscal platform, which includes a proposed 2% city income tax surcharge on earnings above that threshold. These individuals currently contribute nearly half of the city’s income tax revenue. A meaningful departure of this tax base could destabilize funding for vital services, including housing development and infrastructure.

Pressure on Market-Rate Rents and Supply Distortion

Mamdani’s freeze would apply only to rent-stabilized and rent-controlled units, leaving market-rate apartments unaffected by regulation. Yet, because rent regulation is based on tenancy history - not financial need - the benefits would be skewed toward long-term incumbent tenants.

With rent-stabilized tenants likely to remain in place longer, turnover in those units would decline, pushing more demand into the market-rate segment. In neighborhoods like Manhattan, where market rents average around $4,300 per month, prices have already risen by an estimated 25% since 2021. Contributing factors include not just constrained supply and stricter regulation, but also the city’s post-COVID economic recovery and rising maintenance costs.

Meanwhile, rent-stabilized units have seen comparatively modest increases - roughly 9% under Mayor Adams - reflecting the growing gap between regulated and market rents. Real estate valuation data underscores the shift: buildings primarily composed of stabilized units have seen their values decline by 30% to 50% since the 2019 Tenant Protection Act, eroding equity and making refinancing or capital improvements increasingly difficult. These dynamics risk long-term underinvestment in regulated housing stock.

Ambitious Housing Construction Plans

To offset pressures on the housing supply, Mamdani is advocating for an ambitious public investment of $100 billion over ten years to develop 200,000 permanently affordable, union-built units. He proposes funding this initiative through the issuance of municipal bonds, an increase in the corporate tax rate from 8.85% to 11.5%, and the aforementioned income surcharge on million-dollar earners.

While the scope of the plan signals a bold policy vision, experts caution that execution will require overcoming major administrative and financial hurdles: streamlining permitting, coordinating across agencies, and sustaining investor and lender confidence in the face of increased regulatory burdens.

Bottom Line

Mamdani’s rent freeze could yield tangible savings for regulated tenants - potentially between $212 and $590 per month. But those savings come with trade-offs: increased strain on the market-rate segment, revenue risks for the city, and diminished property values in an already pressured rent stabilized real estate sector. The broader plan hinges on the city's ability to finance and build a vast quantity of affordable housing at scale - something that has historically proven difficult in New York.

As the campaign shifts toward a general election, New Yorkers - especially those involved in housing, development, and policy - will be watching closely to see whether Mamdani’s vision evolves into a viable blueprint.

If you’re thinking about your own housing goals -whether buying, selling, or exploring your next move - don’t hesitate to reach out. I’m always happy to chat about the market and how these shifts may affect your plans.

Best,

Corey Cohen

Founder

The Roebling Group

ccohen@roeblinggroup.com

646.939.7375

@mrcoreycohen