Zohran Mamdani Vs. the Real Estate State

As Zohran Mamdani prepares to take office on January 1st, the enemies of New York’s mayor-elect are already maneuvering to thwart his historically ambitious agenda. Outgoing Mayor Eric Adams is leading the charge, taking last-minute action aimed at “Mamdani-proofing” city government and preventing or forestalling the sweeping housing reforms that helped propel the young socialist to victory.

In his final weeks in office, Adams and his first deputy mayor, Randy Mastro, are on a mission to stack the city’s Rent Guidelines Board with appointees who will refuse to freeze rents for millions of tenants in rent-controlled apartments—one of Mamdani’s most popular campaign pledges. While this is a perfectly legal function of mayoral power, Adams waited until after Mamdani’s victory to replace seven members whose terms had long expired, laying bare his motivations. If this comes to pass, the promised rent freeze will be delayed for at least one year, leaving millions of tenants—not to mention Mamdani voters—feeling betrayed.

Adams isn’t stopping there. Mamdani vowed to deliver new, affordable housing early in his term by completing a long-planned development for low-income seniors on a government-owned lot that is currently used as a sculpture garden in gentrified downtown Manhattan and is beloved by a very vocal group of preservationists and celebrities. But on November 3rd, the day before Mamdani’s runaway victory, Adams’s appointees in the Department of Citywide Administrative Services converted the site to state parkland. Mamdani and the project’s developers may sue, or the state legislature may undo the city’s action, but either course would take time and political capital that are both in short supply. For now, the project is dead. If Mamdani manages to resurrect it, he will also revive the controversy surrounding it and incur the ire of its opponents.

If Adams succeeds in thwarting two major planks of Mamdani’s housing platform, it could derail the new mayor’s considerable momentum as he begins to govern. Expectations for his mayoralty are high by design. Mamdani ran a campaign that promised far deeper reforms than New York City mayors have delivered—or even deigned to support—in generations. Although most of these reforms promote “affordability” in one way or another, including universal childcare and fast and free buses, housing affordability galvanized his campaign and mobilized thousands of campaign volunteers. His call for a four-year rent freeze for rent-stabilized tenants was something no serious candidate had ever promised, let alone attempted; Mamdani also pledged that under his leadership, the city would set a course to build 200,000 affordable homes.

Mamdani’s victory demonstrated that housing can be a winning campaign issue—and not just in New York. The United States has constructed a housing system that is as complex as it is limited, and as expensive as it is stingy—truly the worst of all worlds. While it imposes all sorts of means testing and regulatory hurdles on both tenants and builders, the system delivers remarkably little housing that’s actually affordable.

This is no accident. It is, instead, the logical result of a system that’s primarily designed to raise property values, with affordability only a secondary or tertiary goal. As the sociologist Melinda Cooper argues in her latest book, Counterrevolution, the idea is to produce wealth without raising wages, creating a basis for prosperity without challenging American businesses’ bottom lines. Declining property values and home prices are understood as a sign of impending doom, rather than a cause for celebration, and so the system aims to keep prices on an upward slope.

This has conditioned elected officials to lower their housing horizons, and it has conditioned residents to expect disappointment. The easiest housing reforms for American politicians to achieve tend to be those that benefit landlords and developers alongside tenants and homebuyers, such as rezonings (which allow developers to build more housing) and vouchers (which pay landlords the portion of the rent their tenant cannot afford). Programs to build social housing and expand rent regulation get sidelined because they attack the private real estate system directly and challenge the logic of ever-rising rents.

Soon, however, New York will have a mayoral administration that aims to turn that logic on its head, continuing the important work of zoning reform and rental assistance while prioritizing rent control and social housing. Doing so will not be easy, and Adams is hardly the only powerful foe working to block reform. Indeed, Mamdani’s entry into the halls of power calls to mind the words of Spanish political scientist Juan Carlos Monedero, whose New Left Review essay “Snipers in the Kitchen”—published one year after Pedro Sanchez and a socialist coalition government took power in Spain—speaks directly to New York’s current moment. “Even when popular parties with redistributive agendas have won electoral majorities and gained, in principle, access to the governmental levers of power . . . they do not enter into full possession of the state, as if it were a new home,” he writes. “The rooms may be booby-trapped, the stairs barricaded; there may be snipers in the kitchen—shooters who are unseen because they are taken for granted, and all the more effective because unseen.” The obstructionists have crucial advantages, Monedero writes: “money, property, superior education, knowledge of the ‘secrets’ of rule, norms of organization, close connections with higher officialdom, and so forth.” And the obstacles they sow take many forms: “scandals whipped up out of trifles, judicial harassment, dirty tricks or political maneuvers—and this even before market pressures are taken into account.” He concludes, “If we are not to become trapped in a permanent state of melancholy, we need a careful analysis of the state’s enormous capacity for reaction in defense of capital’s interests.”

Already, the first set of traps is being laid by Adams in broad daylight. How else is New York’s City Hall booby-trapped to prevent progress on housing? What forces barricade the staircase, and what snipers lie in wait for a mayor who dares challenge the real estate state?

In order to navigate the hostile territory of city government, Mamdani will first have to construct an administration of his own. As Mamdani’s transition team works to fill various posts, they are likely facing a common contradiction: Most people with the experience to understand exactly how the housing system works today either outright oppose, or simply cannot fathom, radical changes to it, and most people who support a radical rehauling are too inexperienced to craft a practical path forward. The Mamdani team has already identified several appointees who straddle both camps, but they are by nature few and far between. Instead, Mamdani’s ideological apparatus will have to either inculcate seasoned insiders to new ways of thinking or quickly train a like-minded but untested cohort. Both are easier said than done, which may result in high-level housing appointees who refuse to go much farther than previous mayors have, or in radical housing leaders who are easily stymied by recalcitrant veterans of previous administrations.

Even with all the right people in place, a socialist housing program in a capitalist political economy quickly runs up against one of the most stubborn structural fortifications of all: the tax base. In New York, as in most American cities, by far the largest contributor to the city’s operating budget is the property tax, and the bulk of property tax revenue comes from residential real estate. A strong socialist housing program—one that includes converting for-profit housing into public, tenant, and community-controlled social housing; constructing new models of social housing from the ground up; regulating rents; empowering tenants; and enforcing codes—tends to bring down housing’s exchange value, since it limits the amount of profit landlords can extract from housing. When buildings are worth less on the market, their owners owe less in taxes. Compounding the problem, socialist administrations that decommodify a meaningful amount of a city’s housing stock will produce a growing class of housing that is exempt from taxes but, in most cases, requires ongoing subsidies to remain affordable, leading to lower revenues and higher expenses. In both scenarios, there will be less money coming in to pay for the basics of city governance: schools, hospitals, transportation, and more. The more successful the socialist housing program is, the deeper the tax problem becomes.

To offset the property tax trap, the administration can seek to raise wealth and income taxes. Though popular, this would be a steep challenge—not only because it arouses political opposition from those with the most money to spend on opposition campaigns, but because New York City does not control its own income and corporate taxes. Those systems are controlled at the state level, and the governor, centrist Democrat Kathy Hochul, has the greatest power over the budget. She may not be game to alter them for a socialist’s sake, particularly in a year when she’s running for reelection.

This fact should draw our gaze toward the upper floors of the booby-trapped house of power, the higher orders of government that can make or break a city administration. After property taxes, state and federal funds make the second-largest contribution to the city’s operating budget—including federal funds that pass through the state before arriving in the city’s coffers. Gov. Hochul ultimately endorsed Mamdani in the general election when his victory was all but assured, but made clear that she opposes tax hikes and only supports Mamdani’s affordability agenda in the vaguest terms. Under her leadership, the state government will likely find ways to make some of Mamdani’s campaign promises pencil out, but they are unlikely to be a strong enabling force.

The federal government, meanwhile, will be a formidable foe. Despite their bizarrely cordial first meeting, the President of the United States is a predatory landlord who has already declared his intention to wage a multilevel war against New York City under Mayor Mamdani. While we might expect incursions into New York City with immigration police or the National Guard, the Trump administration will likely also find new and creative ways to screw the city fiscally. They have already cut funding for crucial transit infrastructure projects like the New York-New Jersey Gateway Tunnel and the Second Avenue Subway expansion, but that is likely just the beginning of a punitive federal austerity regime.

In addition to targeted cuts aimed at New York, the Trump administration may also impose new national rules that make life hell for the very New Yorkers who might otherwise benefit most from Mamdani’s affordability initiatives. The administration has stated its intention to evict families with mixed immigration statuses from public and subsidized housing, to remove all working-age and “able-bodied” residents from public and subsidized housing after two years, and to slash funds for housing formerly homeless households, conditioning all future funding on involuntary treatment programs and work requirements. If any of this comes to pass, it will not only limit the amount of money the city has to spend on existing programs—let alone expanded ones—but will also create new crises the mayor will have to contend with, and may well be blamed for.

In the face of federal cuts, the Mamdani administration may increasingly turn toward the bond market to fund a greater share of its capital projects, including its promise to build hundreds of thousands of new affordable homes. This is not a new practice—US infrastructure has long been funded by floating bonds, which bring in capital quickly and are repaid with interest over time using either specific project revenues (like tolls or rents) or the city’s tax dollars. But it is an approach that carries inherent risks.

First, there are the risks of incurring significant debt and owing interest. Bondholders must be repaid according to a schedule, no matter what other priorities the city might otherwise aim to fund. And city revenue must first go toward paying interest and debt before it can be used for anything else. The more debt the city takes on, the more of its annual budget goes toward interest payments to unaccountable bondholders.

Second, there are the credit rating agencies. Three New York-based global firms—Moody’s, Standard & Poor’s, and Fitch—monitor just about every government in the US and around the world, and issue a rating based on their perceived credit-worthiness. These agencies do not tend to look favorably upon municipal socialists or their policy priorities, and could decide that Mamdani’s New York is less of a safe bet than Adams’s. If they downgrade the city’s credit rating even slightly, not only will fewer investors be interested in buying our debt, but those who buy will be entitled to even higher payments. From the city’s perspective, this means that a growing share of its revenue would go toward interest instead of flowing into programs for New Yorkers and salaries for civil servants—an outcome that would feel a lot like the very austerity Mamdani ran against.

Adding to the challenges, Mamdani has also promised to pay workers on city-sponsored projects at union-scale. His social housing plan calls for three elements to work in tandem: high levels of construction, low rents, and high wages. But the system cannot accomplish all three at once without much higher levels of subsidy than its budget currently offers.

Given the city’s fiscal constraints, these larger subsidies would ideally come from the state government, or, better yet, the federal government. To the extent that there is historical precedent for high levels of high-wage, low-rent housing, this is how it has worked. Much of what is attributed to the legendary reformer of the 1930s and ’40s Mayor Fiorello LaGuardia, for example, was possible because he had willing allies in the governor and president’s seats. Mamdani has no comparable partners. Skimping on any one of the three goals—low rents, high wages, large quantities of housing—threatens not only to derail one of Mamdani’s central policy promises, but also to sow divisions within his base, with either workers or tenants feeling betrayed by any final compromise.

Such divisions will likely be played up by the mayor’s enemies, including not only rival politicians but landlord lobbyists enraged by the mayor’s plan to freeze rents, increase housing code enforcement, and put the worst landlords out of business. Landlord associations will formally work with any administration, since they refuse to cede the terrain of city government to their rivals. But they will also work tirelessly against the Mamdani administration. Their lobbyists will soon be roaming the halls of the state legislature, pitching various means to water down tenant protections and allow for bigger rent hikes, while their lawyers will be pursuing a similar strategy through the courts. This inside-outside game of legislative and judicial lobbying, coupled with press and social media campaigns spotlighting sympathetic landlords and scheming tenants, can create an echo chamber of “common sense” that becomes hard to pierce.

The traps Mamdani will encounter are not unique to housing; they are laid in every stubborn corner of municipal politics: traffic and transit, hospitals and healthcare, schools and education, safety and policing. Housing, however, holds a particularly central place in city life. The price of housing is, for many, the single largest ongoing cost of living, and it ranks highest on many polls of New Yorkers’ top concerns—which is why Mamdani made it a centerpiece of his campaign. In order to make it a centerpiece of his government, and to avoid becoming trapped in the “permanent state of melancholy” Monedero warned about, he will need to systematically sidestep these traps, blockades, and snipers, each and every day he holds this office.

To set about this difficult task, Mamdani and his administration must harness the mayor-elect’s unique advantages, ensuring that the skills that won him office also help him govern. His gift for clear and cutting communication will be essential in explaining these challenges to the public—not to make excuses for why he cannot achieve what is expected of him, but rather to call out the people and institutions actively working against his agenda.