Freeze the Rent, Burn the City

Polls on the upcoming mayoral election have shown that Democratic candidate Zohran Mamdani is taking the lead with a sweeping majority. Mamdani’s campaign is built on the central narrative of making NYC affordable again, and his policies of establishing municipal grocery stores, creating social housing, reforming property taxes, and slashing transit costs all play into this. That being said, his platform isn’t without its flaws. Chief among the concerns is the proposed rent freeze, which has been a major sticking point throughout his campaign—and not in a good way.

In New York City, the Mayor holds significant influence over rent policy through their power to appoint everyone on the Rent Guidelines Board. The Board is responsible for determining whether rent in rent-stabilized apartments is raised, lowered, or frozen—something we’ve seen in action with Mayor Eric Adams’s nine percent rent increase and former Mayor Bill de Blasio’s three rent freezes. At surface level, the idea of rent freezes sounds like a win for tenants: it promises relief from rising costs, curbs displacement, and helps strike back at abusive landlords. However, in practice, the true results are very different. 

A large issue with Mamdani’s policy is that the Rent Guidelines Board only controls rent for rent-stabilized homes. This means that if a landlord owns both rent-stabilized and unstabilized apartments, which many do, they can simply ramp up the rent for the unstabilized ones to offset the loss in revenue from rent freezes. Taking into consideration that people who rent apartments generally make lower wages than people who don’t, this is disastrous. In fact, according to the U.S. Census Bureau’s 2023 American Community Survey Five-Year Estimates, the average household income in New York City was $127,894; meanwhile, a study conducted by the Rent Guidelines Board found that the median income in rental households was only about $70,000, a difference of more than 50 percent. People who rent homes are particularly vulnerable, which is why it’s so important to be careful of potential economic impacts when making rental policy decisions.

Rent freezes also negatively affect the wider real estate sector. Over time, they distort the housing market by discouraging investments in new rental units and the maintenance of existing ones. Economist Ken Rosen of UC Berkeley published a paper on rent control, which found that “the vast majority of economists agree that artificially controlling apartment rents acts as a price ceiling that reduces the supply of housing over time.” When landlords are unable to adjust rents to reflect the cost of managing or improving properties, they cut corners on repairs or stop offering new rentals entirely. This reduction in housing supply creates a shortage, causes needless inflation, and once again drives up prices for unstabilized units. 

Additionally, rent freezes often lead to decreased landlord investment in property upkeep. When rent is stagnant, landlords lack the financial incentive to reinvest in their buildings. Without the ability to raise rent in line with inflation or to increase maintenance costs, it’s much easier for landlords to justify prioritizing short-term income over the long-term health of the property. The impact is cyclical. Continuous poor maintenance drastically lowers the quality of housing, which, if sustained for a long enough time, contributes to the housing crisis by making it even more difficult to find safe, well-managed apartments. In fact, when de Blasio left office 33 percent of rent-stabilized units had rodents which is twice as many as unstabilized ones. Twice as many were also found to have leaks, heating breakdowns, broken plaster, peeling paint, toilet malfunctions, elevator outages, and mold which all present health risks to tenants. Lower rents cannot make up for unsustainable living conditions.

That being said, there is a silver lining. Mamdani shouldn’t be placing as much emphasis on the rent freeze as he is and should instead focus on his other more sustainable and productive housing affordability policies. His ideas for new housing development, for example, would expand the rental market by increasing supply, lowering pricing in the long run through the fundamental principle of supply and demand. Creating a surplus of a given good will always lead to downward pricing on costs, because it entices consumers to buy more. This eventually leaves off at a lower price point because the quantity supplied will always reach the point where it matches the quantity demanded. 

Cracking down on negligent landlords is another key aspect of his platform that he should emphasize more. Holding landlords accountable for malpractice protects tenants in a way the rent freeze would only exacerbate by decreasing landlord incentive to keep up maintenance.

His proposal for a vacancy tax—charging landlords who leave units vacant instead of renting them out—would also both motivate landlords to lease out empty apartments, and disincentivize speculative holding, which is one of the main reasons for the city’s current housing scarcity and extreme pricing. Providing a legal incentive for landlords to rent out their properties would also be super beneficial because it means that in the near future, higher-quality housing could potentially be on the market for lower pricing.

At the end of the day, freezing the rent won’t make NYC more affordable: it never has, and it never will. It’s time for New York to start investing in realistic solutions that have positive impacts—something a rent freeze cannot accomplish.