Small NYC landlords fear inability to sell if Mamdani wins

Zohran Mamdani has mom-and-pop landlords on edge. 

The city’s Democratic mayoral candidate has long pledged to freeze the rent of New York City’s rent-stabilized apartments. His affordability-focused agenda earned him enormous support from primary voters in June.

But small multifamily building owners told the Wall Street Journal that Mamdani’s housing policy could ice them out of a profit and force them to sell.

While large landlords own the majority of the city’s 2.3 million rental units, smaller owners still take up a considerable share. The housing data website justfix.org reported in 2020 that roughly 28% of the city’s rental stock was owned by landlords with just one to five buildings in their portfolios. 

These mom-and-pop landlords told the Journal that the typical challenges of ownership — maintenance costs, slow permitting processes and unreliable tenants, for example — have been compounded since the pandemic by high inflation and steep interest rates.

Some owners reported barely breaking even. Others are walking away entirely, The Post previously reported.

The current sales climate for these buildings is not promising. Sales for rent-stabilized apartment buildings with 10 or more units have been slowing down for years.

Sales of buildings with at least 75% rent-stabilized units generated $751 million last year — a 70% decrease from 2018, according to Ariel Property Advisors.

Paul Rahimian, the CEO of a commercial real estate lender, told the Journal that owners are cutting prices by 10% on average. The lender called Mamdani’s promised policy “the kiss of death.” 

Rent laws passed in 2019 under Gov. Andrew Cuomo sharply limited rent increases, even for major capital repairs. Large-scale renovations previously offered some rent-stabilized property owners a path to converting their investments into market-rate leases.  

Landlords of rent-stabilized buildings now fear a total rent freeze would grind the sluggish market to a near-halt.

One Brooklyn landlord told the Journal she is struggling to pay her current $3,800 mortgage amid a prolonged wait for refinancing, as well as undertaking three different evictions over a collective $69,000 in back payments. She said she plans to sell if Mamdani wins.

The Mamdani campaign has publicly supported reprieve for overburdened owners, however, supporting an exemption for landlords whose finances justify rent hikes. 

The director of NYS Tenant Bloc, a Mamdani-aligned pro-tenant lobby, told the Journal that a rent freeze is not “make-or-break,” for landlords.