The Journal. - Is NYC’s Mayoral Race All About Rent?

Episode Date: June 27, 2025

NYC mayoral candidate Zohran Mamdani has won over legions of rent-strapped young voters with a platform focused on making housing more affordable — including by freezing rents. This week he cleared ...an important hurdle, winning the Democratic primary in an upset of former New York Governor Andrew Cuomo. But his success has panicked the New York real estate industry, which is now in a mad scramble to assess its options. WSJ’s Rebecca Picciotto explains how the city’s housing crisis is driving the election. Annie Minoff hosts. Further Listening: -How Eric Adams Became New York City’s First Indicted Mayor  -The Rise of the Yimbys  -The Downfall of a Real Estate Empire  Sign up for WSJ’s free What’s News newsletter . Learn more about your ad choices. Visit megaphone.fm/adchoices

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Starting point is 00:00:00 Every year, on January 1st, a gaggle of cold-hearty New Yorkers rings in the New Year by plunging into the ice-cold ocean at Coney Island. This year, they had a politician jumping in with them—a then little-known mayoral candidate and Democratic socialist named Zahran Mamdani. He belly flopped into the frigid water, suit and tie and all, and made a promise. I'm freezing your rent as the next mayor of New York City. Let's plunge into the details.
Starting point is 00:00:41 Mamdani was campaigning on a platform of affordability across many sectors, but at the top of his list, it was a promise to bring down housing costs for renters. That's our colleague, Rebecca Pichotto. She covers real estate. New York is a majority renter city, so railing against high rent cost has been a campaign formula for decades of New York City mayors. And this was no different except that the affordability problem in New York has grown even more dire and renters are feeling it quite viscerally.
Starting point is 00:01:13 Tapping into that frustration helped Mamdani pull off a surprise victory in this week's Democratic mayoral primary. We have won because New Yorkers have stood up for a city they can afford. A city where they can do more than just struggle. Mamdani's strong showing puts him in a good position to win the general election in November. And that's energized many young voters, struggling to make it in one of the most expensive cities in the world. But there's one powerful group that's not so thrilled with Momdani's success. Developers and landlords are in panic mode
Starting point is 00:01:52 in the days since Momdani's primary victory. They're basically freaking out. Welcome to The Journal, our show about money, business, and power. I'm Andi Minowth. It's Friday, June 27th. Coming up on the show, how New York City's housing crisis is shaping its race for May Housing affordability has become a crisis in cities across the country. But the problem is especially acute in New York City.
Starting point is 00:02:45 Housing costs in New York City have notoriously been some of the highest in the country. More than half of the city's renters are considered rent burdened, which means they pay more than the recommended 30 percent of their income on housing. Rising rents contribute to that. In the past five years, rents in the city have risen by 20 percent, according to RealPage, to the point where New York's median rent is out of reach for many. At least for the monthly prices of a two-bedroom rental in New York, a recent estimate found that's now standing at about $5,500, which is pretty exorbitant price. Wow. $5,500 for a two-bedroom.
Starting point is 00:03:25 Correct. And, you know, a for a two-bedroom. Correct. And, you know, a lot of these two bedrooms are being hunted out by 20-somethings with entry-level wages. And you know, you're only lucky enough to pay that rent if you actually get the place, right? What does the apartment search look like here in New York? It's sort of cutthroat. Cutthroat. Cutthroat, because as in many big cities, there are a lot of people who want apartments
Starting point is 00:03:50 and not much supply. In New York City, vacancy rates dropped to a record 1.4% in recent years, the lowest since 1968. That's turned apartment hunting into a full-contact sport. It is wild out here. It is like the Hunger Games trying to find an apartment. Everyone and their mom tells me that apartment hunting in New York is super competitive and yeah, they're right.
Starting point is 00:04:12 I have exhausted every single platform, Facebook marketplace, spare room listings project, Craigslist, Trulia. Renters spend hours browsing online housing marketplaces, and if they find a listing they like, they'll often attend an open house. That's right, an open house for a rental. Lines for these open houses can snake around the block. I'm definitely not going to see it
Starting point is 00:04:35 because this is the line for the open house. Nah, no thank you. And often it's, you go to the open house and you think the picture on Street Easy looks good and you go and the two bedroom apartment actually one of the bedrooms is a closet. So yeah, I mean, I think it's like this looked so spacious online. What magic did they work to make this shoe box look like an actual livable apartment? Yeah. Those lucky enough to find a place
Starting point is 00:05:06 often have to sell themselves to landlords and potential roommates to actually land it. People write letters and share photographs to stand out in their rental applications. I am in the process of apartment hunting. And tell me why this application is asking for a cover letter. This is not a job.
Starting point is 00:05:26 Renters are in, you know, these Facebook groups where they're basically branding themselves and, you know, campaigning to be the roommate of a complete stranger who happens to have an open bedroom in Bed-Stuy. And so they're, you know, carefully curating their Facebook posts, you know, message themselves as the perfect roommate and have friendly looking selfies. And it's become a little bit more of a, as one renter described, a pageant contest than an apartment hunt.
Starting point is 00:05:52 Meanwhile, landlords' profits for buildings with rent stabilized units were up 12% between 2022 and 2023, according to the city's most recent report. So how did Mamdani tap into this widespread frustration over housing in his campaign? So he put cost and affordability at the center of his messaging, and he was on TikTok and Instagram, like specifically targeting young voters with fuzzy proposals, like rent freezes.
Starting point is 00:06:23 The number one cost in New Yorkers' life when they're thinking about that is housing. About two and a half million New Yorkers live in rent-stabilized housing across New York City. Their rent increases are set by the mayor. This mayor has jacked their rent up nine percent. I would freeze their rent. A rent freeze would make it illegal for landlords to raise rents on stabilized units. It would apply to about a million apartments in New York City.
Starting point is 00:06:45 That's about half of the city's rental stock. Mamdani also has other proposals to try to make housing more affordable. For example, by building more units. — He's promising to build 200,000 new publicly-subsidized housing units, invest $70 billion in new capital for affordable housing. $70 billion in new capital for affordable housing. The rent freeze in particular seemed to resonate with people, especially young rent strapped voters. I want Zeran Mondani to be the next mayor.
Starting point is 00:07:16 He wants to make it more affordable to live in New York City. I like that he cares about affordability, which honestly, I think for me is the biggest issue in the city right now. Ultimately, these voters want to feel relief as soon as possible. And so that's why something like a rent freeze, you know, that's gotten a lot more attention than some of his other kind of longer term proposals. The sort of appeal to young voters propelled him to the front of the race and kind of turned him from an unknown name into
Starting point is 00:07:45 potentially the city's next mayor. But talk of a rent freeze sent a chill through the real estate industry, which had largely backed Mumdani's top competitor, former New York governor Andrew Cuomo. New York landlords are especially upset. Rebecca's been on the phone with a number of them. The rent freeze does scare them. Landlords say that this is something that will suffocate their operating revenue, make it harder to keep up these rent stabilized units, which are already dealing with some
Starting point is 00:08:12 of the fallout of a 2019 rent law that capped rent increases on these units. In 2019, New York State passed legislation that imposed stronger limits on how much landlords can increase rents and made it easier for tenants to sue landlords for overcharging them. So landlords are still reeling from all the rent regulation they have to deal with. So, you know, campaigning on a rent freeze as your top line housing proposal, it scared a lot of people away for those reasons. Because it sounds like the landlords are saying, you can freeze the rent. But what about our costs? Who's going to freeze those?
Starting point is 00:08:48 Exactly. And, you know, with tariffs and deportations, putting strain on material costs and labor, their costs are primed to increase even more. And if they can't raise their rents in kind, that's what's scaring a lot of them. And since Momdani's win, that fear has led the real estate industry to mobilize. What their options are is coming up. In the days since Mamdani's primary victory, Rebecca says the real estate industry's big players have been plotting their next moves.
Starting point is 00:09:41 What are their options? Yeah, I mean, in the course of the past few days, you know, it's early, so there's not a five-point plan just yet. That said, a lot of developers are, some are threatening to exit the New York market and expand in places they see as more business-friendly like Miami, Dallas. But relocating your business is an expensive thing to do. So a lot of people are committed to staying in the market and instead they're shopping around for new candidates.
Starting point is 00:10:11 One option is backing the current mayor of New York, Eric Adams, who's running as an independent candidate. I've spoken to developers who are, you know, setting up meetings with Mayor Adams on Wednesday afternoon, more than a dozen real estate and tech leaders met to kind of discuss the path forward. They didn't come to a decision ultimately, but phones are ringing off the hook and people are figuring out,
Starting point is 00:10:37 how do we strengthen the lobbying machine for November? What about the idea of trying to work with Mom Donnie to cut some deals? Yeah, there are certainly people who, you know, if the momentum behind Mom Donnie stays at the pace that it's at, and if he kind of stays on a glide path to win the November general election, they are coming to terms with the fact
Starting point is 00:10:59 that they will want to strike some deals. And as they're setting up meetings with Mayor Adams, they're also setting up meetings with Mamdani's team to say, you know, like make your pitch. I see, so they're weighing fight, flight or deal. Perfect way to put it. It's possible that Mamdani could find some common ground with the industry, especially developers.
Starting point is 00:11:25 That's because they all agree on at least one thing. New York City needs more apartments. And right now, they're too hard to build. There's a couple sort of unique features of the New York development market. One is there's just limited land and desirable spots, you know, near transit and downtown hubs and things like that. But there's also this complex network of zoning policies that further limit the amount of housing units you can build. So even if you find the land you want, you might not be able to build the, you know,
Starting point is 00:11:54 200 unit apartment building that you want. Then there's a lot of sort of high construction costs that go along with very particular building codes and regulations that New York has. Tariffs and deportations could exacerbate those further. And then when you maybe get your apartment built, the operational costs can be pretty heavy, and property taxes in New York are also pretty high. So all of those factors make it difficult for some of these projects to pencil out, and that has
Starting point is 00:12:25 ultimately stifled supply in the market. Developers have been talking about these challenges for years, and some of Mamdani's less talked about proposals do aim to make development easier. He wants to open up government-owned land for housing development, fast-track these land use reviews that are so burdensome to developers. He wants to streamline zoning rules, eliminate parking minimums, which means that developers wouldn't have to build parking spaces to get their projects approved by the city. So he has a lot of less sexy supply side solutions that are actually some of the long held wishes
Starting point is 00:13:01 of the development community. The zoning reform, faster land use reviews, reduced parking spaces for project approvals, freeing up public land for housing. These are all things that developers would likely get on board with. You know, I think they could work out some deals here. Has Mom Donnie said anything about kind of his willingness to work with the industry? Yeah, I mean, he's said that he's willing, he sees the value of and the need for kind of private sector development To you know fill this housing gap that the public sector just might not have the capacity to do on its own So he's absolutely
Starting point is 00:13:38 Looking at the private sector as a partner here whether they want to partner back. That's up to up to the coming months here. Whether they want to partner back, that's up to the coming months. So there is some nuance to Mom Donnie's actual policies and positions on housing. Nevertheless, there's this very real image problem in the eyes of the real estate industry, and that's that New York has just voted for a socialist who wants to freeze rents. has just voted for a socialist who wants to freeze rents. Yeah, in the months ahead of the November election, Mamdani is going to have an uphill battle to win over some of the city's most important power players. And it's mainly because of this political brand that actually won him young voters in the primary.
Starting point is 00:14:18 So in the months ahead, as far as Mamdani's platform, the challenge is going to be balancing this political brand, not necessarily overhauling his policies. You know, again, the democratic socialist messaging that won him this crucial young voter base in the primary, that's what's scaring away the real estate community that he's likely going to need for the general. So that's the balance here. That's the challenge that he has in the coming months.
Starting point is 00:14:45 I would imagine there are many lessons that one could take from this primary election, but it certainly seems like one of them is housing affordability is really, really important to people. And is that just in New York City? No. I mean, we saw this in the presidential campaign that on the national level as housing costs were skyrocketing and becoming an even larger portion of voters' budgets, politicians put it at the front of their platforms. Like housing has always been a high cost for people, but it's become sort of a visceral,
Starting point is 00:15:16 emotional thing for voters. You know, you feel it in your monthly budget. And as a result, politicians are looking for ways to speak to those affordability issues. The cost of living has become a national political conversation. And the biggest part of those costs are often housing. ["The Last Supper"] That's all for today, Friday, June 27th. The Journal is a co-production of Spotify and The Wall Street Journal.
Starting point is 00:15:56 Additional reporting by Redmond Bernhold, Peter Grant, Maggie Grether, and Greg Ip. The show is made by Catherine Brewer, Pia Gadkari, Carlos Garcia, Rachel Humphreys, Sophie Codner, Ryan Knudsen, Matt Kwong, Colin McNulty, Jessica Mendoza, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez-Espinoza, Heather Rogers, Pierce Singie, Jeeva Goverma, Lisa Wang, Catherine Whalen, Tatiana Zemmese, and me, Annie Minoff.
Starting point is 00:16:26 Our engineers are Griffin Tanner, Nathan Singapok, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Peter Leonard, Hailey Shaw, Nathan Singapok, Griffin Tanner, and Blue Dot Sessions. Fact-checking this week by Jennifer Gorin, Najwa Jamal, and Mary Mathis. Thanks for listening. See you Monday.

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