Mamdani’s Rent Freeze Would Sink New York Landlords
By Howard Husock
It began as a New Year’s Day campaign stunt. A New York mayoral candidate wearing a suit and tie jumped into icy water off Brooklyn’s Coney Island. His goal was to call attention to his proposal to freeze the city’s rents. But now that Zohran Mamdani is the Democratic nominee and a national political celebrity, his plan has Sharon Cohen terrified.
“It would make me lose my building. It would destroy me,” says Ms. Cohen, 64. She owns a 99-year-old, 35-unit, five-floor walk-up brick apartment building in the Highbridge section of the western part of the Bronx. The building is on a block with a storefront Pentecostal church at one end and two bodegas on the other. It is Ms. Cohen’s sole financial asset. She is an African-American widow (her late husband’s father had Jewish ancestry) who, before retirement, supervised a sheltered workshop for the developmentally disabled.
The city puts the building’s market value at $1.1 million. Burdened with a $417,000 mortgage used to buy out a sibling’s share of the property, Ms. Cohen is afraid of losing it “back to the bank.” A freeze, she says, “would mean that still you have to make repairs—but you can’t raise the rent.” Repairs—done by her elder brother Gerald, the building supervisor—are constant. Tenants need new refrigerators. Damaged emergency exit doors must be replaced. The building’s residents “all have my cellphone number, and they call,” she says.
Even without a freeze on her rents—which average $1,300 for a mix of one- and two-bedroom apartments—the city is already making it so difficult for Ms. Cohen to keep her building that she is effectively under water. “She essentially gets no income. She’s just trying to hold on to the building,” says Valentina Gojcak of Onesource Property Management, which has helped Ms. Cohen and other Bronx property owners in similar situations.
Under New York’s rent-stabilization regime, a board appointed by the mayor sets rent levels – and must approve any increase – for 960,000 rent-stabilized apartments, nearly a third of all the city’s housing units. In 2017 and 2018, under Mayor Bill de Blasio, the board granted no increase for one-year leases—in other words, a rent freeze. This year, under Eric Adams, the board granted a 3% increase for a one-year lease, and 4.5% for two years. That came after New York University’s Mark Willis testified that owners of rent-stabilized properties in the Bronx are, on average, losing $120 a month on every apartment.
“Any rent increases,” Ms. Gojcak says, “have just been reducing the losses.” Banks, she says, are “terrified” they will have to take over distressed properties. Mr. Mamdani would have limited power to implement many of his tax proposals—but he could stack the Rent Guidelines Board with appointees willing to implement his freeze.
Even as Ms. Cohen’s rents have been “stabilized”—and in some years frozen—her property taxes haven’t. Over the past 10 years, her tax bill has risen from $35,202 to $59,106. During the rent freeze of 2017-18 alone, her tax bill rose by $8,000.
Ms. Cohen could conceivably scrape by if tenants all paid in full and on time on the first of the month. But few do. In the first half of July, she received $14,000 of an expected $46,000. She sees this as a holdover from the pandemic, when an eviction ban took effect and most of her tenants stopped paying. Post-Covid, city tenant-protection laws limit any concern of eviction. In the past 18 months, five tenants owing total back rent of $130,000 simply left. “She’ll never get that money,” Ms. Gojcak says. Nonpayment is “the rule, not the exception”: Current tenants owe uncollected rent of $158,000.
Ms. Gojcak says it takes two years to evict a tenant of a rent-stabilized apartment in the Bronx for nonpayment of rent. For an eviction to be approved, landlords must first correct any housing violation—even if they aren’t getting the rental income they need to pay for such repairs. What’s more, nonpaying tenants can apply to the city for “one-shot deals”—an emergency rent-assistance payment to cover large amounts owed. Payments may not cover the full amount, says Ann Korchak of the Small Property Owners Organization of New York, and they come with a one-year no-eviction clause. Even without such bailouts, almost all Ms. Cohen’s tenants receive government assistance of some kind—either a federal housing voucher or city-provided public assistance. She values her handful of “working tenants,” who “pay on time.”
Mr. Mamdani isn’t wrong that rents are high in much of New York. By one estimate, the median city rent is $4,700. But regulation, not greed, is to blame. A great deal of the city’s housing stock is price-controlled, including the rent-stabilized stock and an additional 177,000 public housing units. Still more is income-restricted – including 50 city and federally-subsidized developments with “affordable units” set aside for those with 60%, 80%, or even 120% of median income. All this creates incentives for tenants to stay put in their apartments – even if they no longer need as large a place as they once did.
According to the U.S. Department of Housing and Urban Development, 30% of New York City Housing Authority tenants are “over-housed,” meaning they have empty bedrooms. Low turnover in regulated units drives up prices on market-rate units. New York’s renter turnover rate since 2021 is 19% lower than the national average. That’s one reason rents for available units keep rising even as the city has been losing population.
Caught in the crossfire is Sharon Cohen, just one property owner in the Bronx, trying to hang on. “I see people in the neighborhood handing out flyers to freeze rents for senior citizens. I ask them what will you do to help me, I’m a landlord—and they keep on walking.”
Howard Husock is a senior fellow in Domestic Policy Studies at the American Enterprise Institute (AEI), where he focuses on municipal government, urban housing policy, civil society, and philanthropy. This article was reprinted with permission. Learn more at www.aei.org.
