New York City’s affordable housing developers are gearing up to build under a new mayor, but they warn that economic conditions and federal budget cuts are turning new developments into Sisyphean battles.
Unpredictable rates, still high interest rates and looming budget cuts federal housing assistance they all threaten new construction in NYC. While developers say they are willing to work with whoever wins November’s mayoral election, they warn that a new mayor — either Democratic front-runner Zohran Mamdani, ex-Gov. Andrew Cuomo, or perennial Republican candidate Curtis Sliwa — should expect serious challenges in building housing.
“That uncertainty in construction, in rates, in regulations and in the federal government – all of that creates an environment that is very much at odds with the direction and eagerness to solve our affordability problems,” said Spencer Levine, president of RAL companies, who has built affordable and market-rate residential developments in NYC.
At the same time, whoever succeeds Mayor Eric Adams will inherit a few key benefits: a city that has been dramatically rezoned by City of Yes, which will broadly allow for more housing development, faster pathways to affordable construction (if three ballot measures pass in November), and a political climate eager to pull New York out of the housing crisis.
Affordable developers hope a new mayor will capitalize on that momentum by making it easier for them to build bigger, faster and with greater government subsidies, four development company leaders told Brick Underground. (Representatives for Mamdani and Cuomo did not respond to questions about their respective housing plans.)
“The key to building more is you have to build higher,” said Dave Walsh, head of housing development at the nonprofit Groundbreaking, which builds and manages supportive housing for New Yorkers. “It is critical that ongoing rezoning efforts continue because that is one of the fundamental keys to getting more housing built.”
Build bigger and faster
Developers applauded both Mamdani and Cuomo for favoring rezoning in their housing plans. Mamdani’s plans eliminate Parking mandates would also help speed development by lowering costs, says David Schwartz, co-founder of Affordable and Market Rate Developer Slate Property Group. (Schwartz estimated in an opinion piece that each parking space adds $50,000 to $100,000 to the cost of a new building.)
Kieran Harrington, CEO of RiseBoro, also praised Mamdani’s commitment to hiring more city staff to accelerate the approval of new buildings, particularly in the city’s Housing Preservation and Development (HPD) department. Or, as Walsh put it, “To fast-track a project, you need someone on the other end of the line.”
“The challenge is to get HPD to a place where it is truly funded and staffed so that it can operate at its full potential,” Harrington said. “Zohran understands that, and if he is elected mayor, I think he will pay attention to that aspect to ensure that we can keep up with the demand for new homes.”
Who will pick up the check?
But the biggest obstacle to affordable housing isn’t that the city is understaffed; there is a shortage of cash, Schwartz said.
“The city definitely has more good, affordable housing projects than they can finance because they don’t have the money,” Schwartz said. “Without more money, more employees won’t help them get this done.”
Financing will be a major sticking point in the next mayoralty. Tariffs on lumber, steel, kitchen cabinets and other materials will make it significantly more expensive to build new homes, according to a study. report from the Brookings Institution. Additionally, President Donald Trump’s changes to federal housing assistance could be catastrophic for owners and tenants.
In NYC, about 34,000 landlords rely on federally funded Section 8 housing vouchers, which pay a portion of a tenant’s rent, according to a study. July report of the New York City Housing Conference (NYCHC).
NYCHC warns that Trump’s proposed restrictions on Section 8 and other programs would likely result in “widespread homelessness” and “multifamily mortgage defaults and banking instability,” especially in rent-stabilized buildings, where owners already warning about an inability to maintain their buildings.
The city and state could close the gap by offering additional subsidies, tax breaks and investing in mixed-income housing, Schwartz said. But that may not be enough to cover the loss of federal funding, even for Mamdani, who pushed for raising taxes municipal bond limit to finance more housing (for which he would need state approval).
“Let’s not sugarcoat it,” Schwartz said. “Market forces are against us.”
A long way to rent lighting
These market forces will limit the number of housing developers who can build, although they will benefit from City of Yes and a handful of other major rezoning changes implemented by the Adams administration.
A tough economic climate is pushing new housing further out of reach of the New Yorkers who need it (although current rent-stabilized tenants could benefit from a rent freeze if Mamdani is elected). More than half of all households in New York are rent-burdened, meaning they pay more than 30 percent of their income on rent, according to a study. Report 2024 from Comptroller Brad Lander.
But Schwartz and other development company leaders were optimistic that with the right combination of subsidies and zoning, New York could claw its way out of the housing crisis.
“Most of the developers involved in our company are really committed, and we have really committed government partners who are doing their best,” Walsh said.
A tough market also presents a common enemy for developers, some of whom initially panicked at the prospect of a Mamdani mayoralty. While not everyone is necessarily “warm to the idea” of a Mamdani government, developers are willing to work with anyone to build, Levine said. And to its credit, the Mamdani campaign realizes the city is in a housing crisis, Schwartz added.
“We all have to work together to do this,” Schwartz said. “Something has to be done, because I think the future of New York depends on it.”
#wins #election #York #mayor #face #worsening #housing #crisis #affordable #developers