A Two-Person Race For Mayor. Who Is Better On Housing Supply?

Plus, more evidence that state housing policy passed in 2024 is failing to meet the moment; and a Trump administration plan that could upend public housing in New York City.

This is your New York Apartment Association weekly update with CEO Kenny Burgos.

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On The Agenda

1:09: State of the mayor’s race: How the candidates plan to solve the housing crisis 

→ Mamdani surges into second behind Cuomo

3:48: NYC housing wins

→ Council OKs 4,600 apartments along Atlantic Ave. in Brooklyn 

4:54: The failure of 485x 

6:28: Trump administration plan could displace 300,000 New Yorkers 

7:34: Jolie Milstein

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Transcript

This week on Housing New York, what will the next mayor do? The New York Times takes a swing at this, and I'll give you my thoughts. Plus, more evidence that the state housing plan passed last year is failing to live up to the billing. And a Trump administration plan could upend public housing in New York City.

Let's start Housing New York. 

[THEME]
“We need 800,000 units to meet the demand today. What we have right now in the United States and what we have right now in New York City is almost a crisis of absurdity.”

[INTRO]

Welcome to the Housing New York podcast, I'm your host, Kenny Burgos. 

We're taping this on Monday, June 2nd. 

I hope you all enjoyed the weekend, despite the Knicks being sent home for good. I hope you spent some time outside as we renew our lease on that perfect window of New York City weather, 'cause if we subscribe to that meme with New York City's 13 Seasons, Hell's Front Porch is slowly approaching.

Okay, on to the news.

[01:09] [State of the mayor’s race]

We wanna start today talking about the mayor's race. Late last week, polls showed the race continuing to form into a two-person race between former Gov. Andrew Cuomo and Queen's Assemblyman Zohran Mamdani. 

Polls from a few weeks ago showed Cuomo winning in the final round by a margin of 2 - 1. Last week, that margin shrunk to only 9 points.

We figured now would be a good time to take a closer look at what the two front runners plan to do about the housing crisis. And over the weekend, The New York Times gave us a helpful breakdown of the candidates’ housing plans. So let's dive in. 

First, let's discuss the front runner, Andrew Cuomo. He has said that 500,000 new homes are needed in the next 10 years, and several of his competitors have also suggested that number.

He wants to focus growth in the dense parts of the city that are already near transit. He has suggested that forcing upzoning on lower-density neighborhoods would not be something he would pursue. 

Considering the difficulty of imposing these changes with the City of Yes, it is clear that a plan to upzone those neighborhoods would be met with resistance.

His main rival, Zohran Mamdani, has also been silent on upzoning low-density neighborhoods. In fact, he's been silent on upzoning at all. His proposal is to find city land and build 200,000 units of social housing. He claims he can do this for less than $500,000 per unit and still require union construction and permanent affordability.

There's no economic data that suggests this is remotely possible. In New York City, the cost is easily double what he suggests and likely outside the city's bond limits. 

Mamdani has also led the charge on a rent freeze for rent-stabilized buildings, which sounds good to this section of renters, but there is ample evidence and in-depth reporting on the financial distress these buildings are facing.

Our estimates are that roughly 5,000 rent-stabilized buildings, housing more than a quarter of rent-stabilized tenants, are functionally bankrupt. A rent freeze would all but guarantee the demise of this housing stock. 

In arguably New York City's most acute moment of housing crisis, the stakes could not be higher. No other city in this country has led their way out of a crisis without dramatic increases in supply. And right now New York City is in need of 1920s level of supply growth. 

A hundred years ago, we built over 700,000 units of housing in less than a decade. I'll be damned if we can't exceed those levels a century later.

So if you care about increasing housing supply, which is the only way to lower rent and make the city more affordable, it's clear that Cuomo's a better candidate. Mamdani’s proposals would set New York City back a decade on creating housing. 

There are other candidates with good housing policy ideas, which is great, but this late in the race, it's coming down to a two-person decision.

[03:48] [NYC housing wins]

Okay, some good housing news now. Last week, the City Council approved a massive upzoning of Atlantic Avenue, making way for 4,600 new apartments – many of them designated as affordable. And it passed without much opposition. 

That's due to the great work by Councilmember Crystal Hudson. Mayor Adams’ administration also deserves some props here. 

Over the weekend, City Planning Commissioner Dan Garodnick was on NY1 talking about it, but this didn't happen overnight. A few years ago, there was a single redevelopment proposal for a lot in this area, and Councilmember Hudson stopped it. That gave a lot of people concern at the time, but the goal was to get away from the individual lot approvals by the Council, so a more holistic upzoning could be approved.

Many were skeptical of this as well, since there is a history of council members opposing development by promising better development in the future. 

The city and the council member delivered on their promise. 

And when it comes to developing housing or implementing any policy, keeping your promises is important. It builds trust and it helps build a better city. So, kudos to all involved in getting this done, it's a big step forward for the city. 

[04:54] [The failure of 485x]

Okay, back to the bad news about housing now. Sorry. It's been more than a year since the State Legislature put into place a new tax abatement program for new housing developments.

It's called 485x. It replaces the old 421a. 

For all the normal people who don't follow this stuff closely, these tax breaks are necessary because the city has an unjust and inequitable property tax system where renters pay significantly more than one and two-family homeowners. Because property taxes are outrageously high on apartment buildings, nobody would build any apartments in the city. 

Politicians have known this for more than 40 years now, which is why they created these tax abatements. They are incentives for developers to keep building housing with some of it affordable because the math doesn't make any sense to build without the tax breaks.

Anyway, early signs are that the 485x tax break is an utter failure. 

It had a carveout for higher labor costs that makes any building project over 99 units financially impossible in most parts of the city. So what we've seen is mostly just 99 unit proposals put forth, even if the zoning allows for larger projects.

It seems like all the politicians agree that we have a housing crisis, and they all seem to understand that more housing makes rents go down and makes the city more affordable. But when it comes to executing, they have passed a plan that is clearly failing to solve the problem they all admit we have. 

Unfortunately, this data is coming out too late for this legislative session to do anything about it. But Albany needs to make housing their top priority next year. 

[06:28] [Trump administration plan could displace 300,000 New Yorkers]

Turning our attention to what's happening at a federal level, more than 300,000 people who live in public housing or receive Section-8 vouchers could be displaced based on a proposal put forth by the Trump administration. 

Here's the gist: The proposal would cut off federal housing subsidies for people considered “able-bodied” after a certain period of time.

Congressman Ritchie Torres's office crunched the numbers and found that about 316,000 renters under the age of 62 without a disability, who either live in public housing or rely on Section-8 vouchers, could be affected. 

We cannot stress enough how chaotic and disruptive this could be. A lot of these voucher holders live in rent-stabilized buildings, and those vouchers are absolutely essential for keeping those buildings afloat – especially as costs like property taxes and insurance continue to climb.

This proposed cut would significantly defund these buildings, which have already been defunded for a decade by the Rent Guidelines Board. We sincerely hope this proposal doesn't get passed, but if it does, we need to work with the state and city government on solutions. 

[07:34] [Jolie Milstein]

We're gonna end the podcast with a quick note about the retirement of Jolie Milstein.

For the past decade, she has led the New York State Association for Affordable Housing or NYSAFAH. This group is made up of nonprofit housing providers who are a vital part of the city's housing infrastructure. They deal with many of the same problems our members face, from high interest rates to declining net operating incomes, that makes securing financing for repairs and upgrades impossible.

In the past few years, they were also the most vocal group about the impact of non-paying tenants on maintaining buildings, as rent arrears skyrocketed during Covid and afterwards. And their members have been crushed by insane insurance hikes, just like our members.

We appreciate her work advocating for better housing policy, and we wish her well in her retirement.

[OUTRO]

That's the podcast for this week. With the state legislative session entering its final week and the mayoral race heating up, you'll wanna tune in over the next few weeks to hear our takes and to give you some more insight into all things housing here in New York City. 

We hope you'll keep following us on X, Instagram and TikTok. You can find us @housingny. 

We love hearing from you. You can post in the comment section of where you are listening or engage on social media platforms. 

You've been listening to Housing New York with Kenny Burgos and I'll see you all next week. 

And remember, good housing policy starts with good conversation.