Midway through his campaign for mayor, Zohran Mamdani told the New York Times that the one issue on which he had changed his mind was that he had come to realize the importance of the private sector in solving New York City’s severe housing crisis.
Now, his housing plan being developed by Leila Bozorg, now the deputy mayor for housing and planning, will include a role for private developers, with the city making major changes to bolster construction.
In an interview with THE CITY, Bozorg previewed some of those elements, including new financing tools to boost the development of affordable housing, changing land use rules in neighborhoods that have been resistant to denser housing and new requirements that would increase the use of union workers, without necessarily paying the highest prevailing wages.
The Mamdani administration also remains committed to a four-year rent freeze, said Bozorg.
“There’s also no question that low-income tenants who make up the vast majority of rent stabilized tenants have also been facing increasing costs and a tough economic and inflationary environment,” Bozorg told THE CITY.
While she reiterated Mamdani’s pledge to lower landlord costs through property tax reform and to bring down skyrocketing insurance costs for multi-family housing providers, Bozorg declined to attach specific deadlines or plans of action to those promises.
A faceoff with real estate groups looms.
“The promise of a four-year rent stabilized rent freeze is fatally flawed and imposing a freeze before any data has been examined is contrary to law,” said Sherwin Belkin, a noted attorney who represented landlords in a legal challenge to NYC’s rent stabilization law. While not willing to predict a legal challenge, his firm has issued a policy brief arguing the freeze is legally vulnerable.
Bozorg, who was also a key housing official in the Adams administration and one of the few holdovers on the Mamdani team, said City Hall’s full housing strategy will be released in the coming months.
Any plan will have to address a 1.4% vacancy rate, the lowest since 1968. And rents that have outpaced income growth since then, as well. More than half of renter households currently spend more than 30% of their income on housing. A third pay more than 50%.
While the administration has yet to name a new director of the Department of City Planning to replace Dan Garodnick — who was widely seen as key to the passage of Mayor Eric Adams’ City of Yes agenda — Bozorg said work is already underway to take on a new wave of rezonings that build on City of Yes to target low-density neighborhoods for more housing and take advantage of charter reforms that reduce the power of City Council members to block those changes.
She noted that the city cannot legally require affordable housing in new construction in specific areas without changing existing land use rules to increase density.
“We need to be building more housing in a wider range of neighborhoods, and we need to be able to use tools like mandatory inclusionary housing in places where we can unlock housing without city subsidy,” she said.
Bozorg also promised new financing strategies. While she said many remain in the development stage, the Mamdani administration is exploring a revolving loan program that would finance mixed-income housing with repayments to the fund providing money that can then be invested in more housing.
The cost of labor also remains a sticking point. Mamdani’s platform calls for building 200,000 units of affordable housing with union labor at a cost of $500,000 per unit. But the Real Estate Board of New York estimates a cost of about $800,000 a unit when using union labor.
In addition, late last year the Council passed a bill — which Adams allowed to become law without his signature — requiring a $40 minimum wage on affordable projects financed by the city.
Bozorg suggested a series of arrangements could reduce the costs while providing reasonable wages.
“There are many ways to build housing and involve partners in labor,” she said. “That doesn’t always mean that you’re paying prevailing wage when you have work that you’re doing with labor.”
Housing advocates say the tradeoff is a big one.
“The more it costs to build and operate a unit of affordable housing, the less affordable housing the city and its partners can build and operate,” said Howard Slatkin, a former official at City Planning who now runs the Citizens Housing and Planning Council.
His group is calling for the establishment of a task force to cut construction costs.
Innovative construction techniques that would lower costs are also on the agenda, Bozorg said. She noted the new head of the city’s Housing and Preservation Department, Dina Levy, had developed a program to increase modular construction while working in the Hochul administration.
Maintaining existing housing stock in pre-1974 buildings that are entirely rent regulated and in all-affordable buildings that rely on city subsidies will also take on increased scrutiny under a rent freeze that would limit landlords’ ability to cover costs.
Enterprise Community Partners, a nonprofit that builds affordable housing in New York, has said that 6 of every 10 affordable projects it financed is losing money and in trouble. The Furman Center and the Association for Neighborhood and Housing Development have released similar findings.
The Furman Center has also focused on the severity of the finances of older buildings.
“This is not a one-time problem as the rent shortfall compounds every year the Rent Guidelines Board guidelines fall short of what is needed to properly maintain the building and preserve it, at least for the pre-74 buildings,” said Mark Willis, the author of the Furman Center study on the pre-1974 building.
While saying the situation is not as severe as outlined in the reports, Bozorg says the administration recognizes there is distress and reiterated the mayor’s pledge to fix the property tax system, which imposes the highest property taxes on multi-family housing while giving owners of single family homes, coops and condos big breaks, especially in areas where property values are rising.
A similar pledge has been made by many mayors, including Bill de Blasio and Adams, but no one has been willing to commit to reforms which would raise taxes on so many homeowner voters. Bozorg didn’t give a date on when such a proposal might be unveiled.
She did say that there would be efforts soon to deal with skyrocketing insurance costs, which have been especially severe for rent-regulated buildings in The Bronx. It isn’t clear what the administration might propose, but some advocates have called for a city- or state-run insurance option.
The Mamdani administration supports liberalizing the J-51 tax break to make it more attractive for landlords to renovate apartments and will look into ways the city can help these properties refinance their debts, Bozorg told THE CITY.
But those breaks may not be enough, said Rachel Fee, executive director of the New York Housing Conference. “Many affordable buildings are in an operating deficit, and tax-side solutions won’t fill the gap for them as they are typically fully abated to support low rents,” she said.
Fee says those buildings need both increased revenues and lower costs.
Another area of likely conflict between the administration and real estate groups is over the 485-x tax incentive.
Enacted April 2024 to replace the 421-a program, 485-x provides huge property tax breaks in return for a percentage of below-market, affordable units. But it also requires that buildings with more than 100 units pay at least $40 an hour in wages and benefits, a requirement that can rise to $70 an hour for buildings with more than 150 units.
Since its passage, not a single developer has filed plans for a building with more than 100 units, according to HPD data compiled in November by the Real Estate Board of New York. In the third quarter of 2025, 21 proposed projects had exactly 99 units so the wage rule would not apply. That leaves thousands of units allowed by zoning unbuilt.
Bozorg doesn’t think the law needs any changes.
“If you look at the history of 421-a, there was slow uptake in early years and then it became a robust program that many used,” she said. “So I think it’s too early to say that it has failed.”
REBNY disagrees, pointing out that the 13,000 units being produced each quarter is insufficient to make a dent in the city’s housing crisis.
“Every quarter, every year that policymakers don’t address issues like the shortcomings of 485-x, an insufficient number of rental units will be created and our housing crisis will further worsen,” said James Whalen, the group’s president.
