Can Zohran Mamdani’s rent freeze in NYC actually work?

Photo above - Steinway tower, one of the newest apartment buildings in NYC. It's so tall and skinny because there's not much land left. 2 bedroom rents start at $5,000 a month. Electricity, water, gas and other amenities cost extra. Hey . . . was that thing engineered to withstand hurricanes?

Whew – that WASN’T a close one. Mamdani wins in a landslide. Your new mayor is a 34 year old socialist with a millionaire daddy. Mamdani won on the strength of his signature policy “rent freeze”. How many apartments will this apply to? Guess. Go ahead - I dare you.

Okay it’s 2 MILLION apartments. Now guess how many people live in the 5 boroughs of NYC. In the meantime, I will get back to my rant.

I totally get the allure of voting for a rent freeze. Even though it probably won’t happen, and if they tried it could never work. But as election promises go, it’s a winner. Right up there building a wall and making Mexicans pay for it, and saving planet Earth with massive subsidies to Elon Musk and Tesla.

But I understand the attraction. NYC is soooo expensive. Even if a Mamdani voter only get a 2 or 3 years of frozen rents before their building falls into disrepair and becomes a complete shithole, they will have personally saved thousands. Ka-ching! Now get ready to vote in 2028 for whoever promises to wipe out all your student loans, and freeze grocery prices. Campaign promises don’t have to be rational. Just irresistible, and fit on a bumper sticker.

There’s a link to Fortune magazine below. Since Fortune is automatically dissed as a tool of capitalism, any socialists and communists may want to stop reading now and spare themselves cognitive dissonance. Long story short – there has not been any time or place in history where freezing rents led to more construction, safer communities, and modern amenities like electricity, indoor plumbing, and central heat. If you find such a place, please post it below in your reply. My advice is to avoid wasting time googling the USSR, Cuba, North Korea, the Peoples Republic of China (during the great leap forward), Venezuela, Zimbabwe . . .

Mamdani has a backup plan just in case he never achieves a rent freeze on those 2 million existing apartments. He plans to build 200,000 new affordable apartments. The price tag for city built/subsidized apartments varies depending which Mamdani speech you read. Since the average cost to construct a 2 bedroom apartment in NYC is $400,000, building 200,000 new units could cost $80 billion. The entire budget for NYC in 2024 was only $100 billion or so, so this would require an 80% jump in things like taxes, fees, bridge tolls, red light cams, etc.

Mamdani has not said where the new 200,000 units could be built. However, I’m confident some of the 2 million rent controlled units will eventually be abandoned, or burn down, or collapse from leaky roofs. So those sites are a real possibility in the near future.

I’m just sayin’ . . .

Zohran Mamdani’s signature housing policy is widely loathed by economists. Here’s why | Fortune

NYC Housing Market: Mamdani Proposes Rent Freeze and 200K Affordable Units

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lasergraph · 70-79, M Best Comment

Price freezes is not new, Nixon did that in the 70s when inflation was getting out of hand, it failed and Carter had inflation even worse. I hand a bank CD that paid 11.5% but couldn't keep up with inflation.

SusanInFlorida · 31-35, F

@lasergraph i marked this as best comment.. price freezes - in addition to being bizarrely used by nixon - are a favorite tactic of banana republic dictators to stop rioting in the streets as the local currency circles the drain.

mamdani can't control the US dollar, and apparently believes he cannot create NYC jobs at wages appropriate for the city's lofty rents.

so he is pursuing the path of 3rd world dictators?

wildland

@SusanInFlorida We in Europe recognise Mamdani's policies as fairly standard. It's not our fault that Americans are told that rent freezes, free buses and universal childcare are impossible.

PicturesOfABetterTomorrow · 41-45, M

@lasergraph Riiiiight and a global oil crisis totally had nothing to do with that. 😂

PicturesOfABetterTomorrow · 41-45, M

@wildland Americans are told single payer healthcare makes you a Marxist country.

SusanInFlorida · 31-35, F

@wildland they aren't impossible. we just don't believe there is a plan to pay for them affordably. mamdani's campaign proves that. his spending plans are $80 billion a year. the city already spends $100 billion, and it's one of the most expensive places to live in america.

PicturesOfABetterTomorrow · 41-45, M

@SusanInFlorida That is the problem. On the right it is all about beliefs and feelings. Not about facts. And your claims about his spending come from opposition sources that have a vested interest in wildly exaggerating things.

It is the most expensive place in America because it has catered exclusively to billionaire Row for 40 years.

Avectoijesuismoi · 36-40

@PicturesOfABetterTomorrow rent freeze can only be implemented on city owned properties, it cannot be implemented on private sector property they simply get rid of the current tenant and hike for the incoming new tenant, all good leases have a clause in the renewal part that can be activated usually 60 days before the renewal is due. They also have clauses that state the annual increase at a set amount of say 10 % so of they want to stay they have to abide by the terms of the agreement they signed a third party like a Mayor cannot alter the terms of a signed agreement between the parties of that agreement.
In short private landlords are not charitable organisations they are in it to make money. They are people that had the intelligence as resources to buy that extra property to generate income from it.
I have been there and as soon as a similar trick was pulled I got rid of the tenant and sold the properties off. Which actually shrinks rental availability because the person you have sold it to often buys it to live in themselves.

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lasergraph · 70-79, M

@PicturesOfABetterTomorrow While you are freezing rent are you going to freeze the taxes, insurance and maintenance cost the landlord pays. My insurance cost doubled on my house in one year and I hadn't made any claims.

PicturesOfABetterTomorrow · 41-45, M

@lasergraph Riiight because we should protect property management corporations first and foremost. Sure. Oh and those property management corps are already getting tax breaks and special perks.

lasergraph · 70-79, M

@PicturesOfABetterTomorrow Yes they get to deduct their expenses off their taxes, so do you. I have had a rent house, the happiest day of my life is when I sold it.

PicturesOfABetterTomorrow · 41-45, M

@lasergraph Lol. Are you seriously going to pretend the tax benefits for a fortune 500 company is the same as an average Joe. That is just deliberately dishonest.

lasergraph · 70-79, M

@PicturesOfABetterTomorrow The tax code doesn't stipulate fortune 500 companies. Corporations pay a corporate income tax, the stockholders who actually own the corporation pay capital gains tax on the SAME money
They match their employees social security. They pay property taxes on the buildings and equipment in the city/county where it is located and they pay inventory taxes on their products. This doesn't include various licenses depending on what kind of business it is.

PicturesOfABetterTomorrow · 41-45, M

@lasergraph Wow. You really really love pandering to and giving free PR to the Robber Barons.

All of this is just pro oligarch nonsense.

lasergraph · 70-79, M

@PicturesOfABetterTomorrow Hitler told his people the Jewish Money Barrons were the reason for their plight. Income jealousy has been around for decades.

PicturesOfABetterTomorrow · 41-45, M

@lasergraph The GOP is using the exact tactics of the NSDAP so spare me. And the NSDAP was also backed and bankrolled by the oligarch class of Germany and the same in Fascist Italy.

So stop trying to rewrite history.

And pretending it is just income jealousy is just childish.

Wake up. You are far closer to be homeless than ever being a billionaire so you don't need to be their free PR department.

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PicturesOfABetterTomorrow · 41-45, M

@lasergraph I would have thought that was obvious. A fascist basket case in the USA is a very obvious national security problem.