He has limited tools to make good on his central promise, but can make a dent using the ones he has.
New York City Mayor Zohran Mamdani is being roundly, and appropriately, praised for the affordability focus of his campaign. Household budgets across the country are being squeezed as rents, home prices and the cost of other critical consumption goods rise faster than incomes. These affordability pressures are particularly acute in high-cost cities like New York. But what can Mamdani actually do to make the city more affordable?
There’s good news and bad news. The bad news is that many of the drivers of affordability are largely beyond the scope of any mayor’s power, from rising insurance and utility costs to increased tariffs and a weakening labor market. Meanwhile, mayors have limited ability to raise revenues, and volatile federal funding streams undermine policy responses.
It’s fundamentally difficult for policymakers at any level of government to make housing — the largest component of household spending — more affordable in the short- or medium-run. Markets typically address affordability through increased supply. If the demand for bagels increases, and prices start to rise, producers can quickly make more bagels, which should lower prices. But it’s not so easy to increase the supply of homes. Most obviously, there is a limited supply of land within a city, and zoning limits the amount of new housing that can be created on each site. Even when land is available, regulations make it extremely difficult and time-consuming to secure appropriate permits.
Further, even the most aggressive supply policies can only increase the supply of housing by a few percentage points. Austin, Texas, which now leads the nation in the rate of new construction, is on track to build about 15,000 units in 2025. That’s a stunning accomplishment, but it only amounts to about 3% of the city’s existing housing stock. In New York, the number of new units completed reached 34,000 in 2024, the highest annual total in decades, but this was less than 1% of the existing housing stock. And of course, some units fall out of the stock too, so the total housing stock in Austin and New York grew by even less than these amounts. At this pace, it’s difficult to make visible progress in increasing supply during a mayor’s term.
A second challenge is the rising costs of construction. While this increase is happening throughout the country, it’s happening off of a higher base in New York City. Mamdani’s housing plan assumes the creation of new affordable housing at a cost of $500,000 per unit, with union labor. This is an admirable goal, but it won’t be easy. Affordable housing developers say that per unit costs in the city now run considerably higher than this. The lengthy, complex and risky process of securing approvals to build housing, along with the significant regulatory requirements, design requirements and approval processes all add significantly to construction costs in New York.
The costs of construction labor and materials — so-called “hard costs” — are also higher in New York City than in other cities. According to an annual survey conducted by the construction management company Turner and Towsend, the hard costs of high-rise construction in New York are higher than in any other city in the world, and the hard costs for low-rise construction are among the highest in the world. High labor costs are a key reason, as are strict licensing rules and building code requirements that call for more expensive materials, which are even more expensive today given the Trump Administration’s tariffs. Liability and workers’ compensation insurance also tend to be higher in New York City, partly due to the state’s unique scaffolding law, which holds contractors and building owners strictly liable for any injury occurring on the job. Any reduction in construction costs will involve some difficult trade-offs.
Another obstacle to creating more affordable housing is the limited supply of funding to create dedicated affordable units. The City relies heavily on federal funds to support its affordable housing initiatives, but that funding is now uncertain. Tax credits for the construction of new affordable homes are also limited in number. The tax-exempt bonds that are needed to use most tax credits are also limited, and housing must compete with other priorities for their use. Furthermore, these funds cover only a fraction of the total development costs. Moreover, federal funding for rental assistance is limited, with only about one in four eligible households across the country receiving assistance. Cities are constrained in their ability to raise these additional dollars through local taxes by both legal and political limits. They must balance their budgets, and spending a lot more than other cities on redistributive programs like affordable housing can be risky as affluent households may seek to avoid the taxes by moving to other states and localities.
Even if the City could build housing more cheaply, another challenge is the rising cost of operating and maintaining that housing, especially given New York’s very old stock of housing. Close to 40% of housing units in New York City were built before 1940, and as buildings age, they inevitably need more repairs.
Some owners, perhaps especially owners of rent-stabilized buildings, have deferred maintenance due to thin operating margins, which makes the costs of upkeep all the more challenging. Meanwhile, utility costs are rising, and property insurance costs continue to escalate, driven by climate threats, liability lawsuits, and higher construction costs. Even landlords just trying to break even may need to increase rents to cover these rising costs. Mamdani has limited tools to address these macro challenges.
Finally, the mayor is also limited in what he can do to limit demand pressures. Much of housing demand is driven by macro factors like interest rates, demographic shifts, rising income inequality and the postpandemic increase in demand for space and privacy. Of course, the ultimate Catch-22 for any mayor is that making a city more livable also generally means making it more desirable and expensive.
All that said, the good news is that there are some things that Mamdani can do to help drive down the cost of living.
First, he can and should do more to facilitate the creation of housing. City of Yes and the recent ballot proposals are welcome steps forward, but there is more that the new administration can do to reduce regulatory barriers to new housing. The mayor can use targeted neighborhood rezonings to upzone near transit stations, where new homes will not bring as many cars. There is also room for new homes in the city’s low-density neighborhoods through adding “gentle density” — duplexes, triplexes and small apartment buildings that would not fundamentally change the look and feel of the neighborhoods. Housing added near transit should not be subject to minimum parking requirements. In other parts of the city, developers are required to provide off-street parking when they create new housing, which adds significantly to the cost of construction.
Relatedly, the mayor can also help to boost the number of new, affordable housing units created by working to make the large number of acres in the city owned by the city, state or federal government; faith-based institutions and other nonprofits easier to develop. And Mamdani’s administration can help to reduce construction costs by scrutinizing the building code to identify opportunities for reforms that would lower costs without sacrificing much safety, such as allowing plastic water pipes, moving the city’s building code requirements closer to those of other large cities in the U.S. The city might also look for ways to harness AI to improve coordination and avoid duplication over the myriad inspections and approvals required.
Facilitating the creation of different types of housing is valuable too. The City of Yes rezoning made it possible to convert buildings to single-room occupancy housing, and to allow accessory dwelling units in some areas. Both those types of housing could help provide housing for smaller, low-income households, but it will require creativity and determination to bring the finance, insurance, construction, utility and other industries together, along with the permitting agencies, to actually spur significant construction, conversion and operation of these housing types.
The mayor can also do more to preserve the existing stock of affordable housing. Every administration must balance the need for preservation against the need for new supply. Preservation can be both cheaper and more climate-friendly than demolition and new construction. This includes the critical task of preserving the city’s public housing units, which need about $80 billion in capital repairs, according to New York City Housing Authority (NYCHA) estimates. The mayor should ask his deputy mayor of housing and planning to focus on improving the capacity of the housing agencies to monitor the conditions and management of subsidized buildings, and reviewing the balance between requiring adequate reserves and avoiding unnecessary financing costs. The mayor should also firmly support NYCHA’s plans to renovate its buildings using a variety of different approaches and reassure residents that they will still be protected from higher rents and arbitrary evictions. Given the dilapidated condition of many of NYCHA’s buildings, the alternative is simply not tenable.
The high cost of housing is driven not just by construction costs but also by the cost of maintaining and operating housing. The mayor can prioritize in his Albany agenda legislation and budget appropriations to enact reforms and provide subsidies to help stabilize finances for the subset of rent-stabilized buildings for which operating costs exceed rental revenues while at the same time maintaining the affordability of the rents for existing tenants. That would require reimagining the hardship exception process, which promises to give relief (but rarely, if ever, does) to building owners facing particular challenges. The Mayor should work with both the state legislature and the state Division of Housing and Community Renewal to make the process less time-consuming and costly, less rigid and more attuned to the different challenges that various types of rent-regulated buildings face.
Even buildings that require exceptions, however, must remain affordable to existing tenants, so adopting a government subsidy, especially for low-income tenants, may be necessary. Mamdani will need to work with the governor and his former colleagues in the state legislature to make those reforms and to reconsider some of the most restrictive features of the 2019 Housing Stability and Tenant Protection Act in order to allow for modest increases in rents when a tenant moves out, and when owners make investments in their buildings, without incentivizing harassment of existing tenants.
As for reducing operating costs, the mayor could advocate for some of the sensible property tax reforms that have been proposed over the years to reduce the disproportionate burden on rental buildings (such as ending the under-valuation of high-end co-ops and condos by valuing them in the same way as 1-3 family homes and small rental buildings and adjusting the share of total taxes paid by rental buildings). But the mayor would have to spend political capital to make such reform a priority in Albany. The mayor also could work with his former state colleagues to create a property insurance fund specific to affordable housing. As for utility costs, the mayor could support energy retrofits and critical home repairs and modifications, including for moderate- and middle-income homeowners, to allow them to reduce their utility bills, keep their homes and age in their communities.
Finally, the mayor could push to reform the systems and processes to place people into affordable homes. It takes far too long for families in need to work their way through the City’s Housing Connect matching system — over the past four fiscal years, the median time it took to approve an applicant for an income-restricted apartment ranged from 142 to 192 days. Unfortunately, affordable homes may sit empty while the eligibility and matching processes drag on. The City should scrutinize eligibility rules and documentation requirements to find ways to reduce administrative burden and streamline approvals. For households that are lucky enough to receive a housing voucher, it can take months to find a suitable unit and a willing landlord. Many fail and have to return their voucher to the city. Some of this reflects the tough housing market in New York, but the city could do more to experiment with different approaches to landlord outreach and inspections. It’s not enough to design new tools to promote affordability; the City must do everything it can to ensure that residents can actually take advantage of the resources the city has to offer and can access them during their most acute times of need.
None of this is easy, and none of this is quick. It may take years to accomplish these reforms, and it may take more years for them to visibly improve affordability. But to live up to the promise of his campaign, Mamdani needs to continue to stay focused on affordability — not just while campaigning, but also while governing.
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