Mayor Mamdani’s new job: Fixing New York’s affordability crisis

By Nathaniel Meyersohn, CNN

New York (CNN) — In New York City, the typical household spends more than half of its income on rent and 100,000 people sleep in homeless shelters every night.

“This is what a full-blown affordability crisis looks like,” said Manhattan Borough President Mark Levine in a December report. Median rents in Manhattan have topped $5,400 a month.

The city’s cost-of-living crisis extends to food, child care and other parts of daily life: 1.4 million people, or 15% of the city’s population, is food insecure. A family must earn $334,000 to afford child care for a 2-year old, according to US Census Bureau data.

Zohran Mamdani, New York City’s next mayor, faces the enormous task of making it easier to get by in one of the most expensive cities in the world.

Mamdani won the most votes of any New York City mayor in 60 years, propelled by his focus on working-class issues. Now he must deliver on his progressive agenda when the city’s economy is slowing, the federal government is cutting the social safety net and the city’s budget gap is growing.

Mamdani pledged to freeze rents and build more affordable housing, but many nonprofit organizations and developers that operate subsidized housing say they already can’t cover their costs.

And he wants to implement free care for every child ages 6 weeks to 5 years and eliminate fares on city-run buses.

But he needs state approval to raise taxes on the city’s wealthiest residents and corporations to pay for these plans, and New York Governor Kathy Hochul has thrown cold water on his plan to make the entire bus network free and make up the $1 billion in fares the MTA may lose from eliminating fares.

His ability to implement his agenda in office hinges on mobilizing his grassroots campaign supporters to push for higher taxes on the wealthy, more housing production and other priorities, said Kim Phillips-Fein, a history professor at Columbia University and the author of “Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics” on the city’s 1970s financial collapse.

His allies recently launched a nonprofit designed to build pressure on city and state lawmakers to pass his agenda in the city and state legislature in Albany. (A Mamdani spokesperson did not respond to CNN’s request for comment.)

“People thought Mamdani’s election was impossible a year ago, but it was accomplished through significant political organizing,” said Phillips-Fein. His success as mayor “will depend upon an alignment of political forces and continued organizing.”

Warning signs in the economy

Before the election, Mamdani’s opponents warned of an exodus of the ultra-wealthy from New York City as well as fiscal collapse if he won.

But the wealthy haven’t fled, and comparisons to the 1970s financial collapse are “shallow,” said Phillips-Fein. The city was losing population, manufacturing jobs and suffering a deep recession back then, she said.

The city’s economy has been strong, despite affordability concerns.

Employment and participation in the labor force are at all-time highs. Tax revenues are also at record highs, and fears of an urban doom loop after the pandemic have faded. Office leases reached 97% of pre-Covid levels in the first half of the 2025.

But there are signs of a slowdown.

The city is on track to have added 78,000 fewer jobs in 2025 than it did a year ago, and most of the job growth has been concentrated in the low-wage home health sector, said Sarah Parker, senior research and strategy officer at the New York City Independent Budget Office.

A $6.5 billion budget gap looms in 2027 that, by law, must be filled, and bigger holes are expected in the following years.

The incoming administration is “facing a pretty challenging fiscal picture,” Parker said.

Housing costs

Housing is the largest cost for most people in New York City. That helped drive Mamdani’s victory.

Mamdani pledged a rent freeze on rent-stabilized apartments, calling it his “landmark policy.” The freeze would apply to nearly 1 million apartments, almost half of the rental stock in the city.

But Mamdani’s plans will run into the financial pressures of operating rent-stabilized housing.

Since 2020, expenses for rent-stabilized apartments have grown 22%, while rents grew roughly 11%, according to the lender Community Preservation Corporation. Rising costs for utilities, insurance and labor without a corresponding rise in revenue may lead buildings to deteriorate, experts say.

Separately, Mamdani wants to build 200,000 new affordable homes for low- and moderate-income households that will be permanently subsidized by the government. But this sector of the housing market is also in trouble, with some developers at risk of defaulting on loans.

“The trends of increasing costs and reduced income are unsustainable for affordable housing,” Enterprise Community Partners and National Equity Fund, two organizations that finance affordable housing, said in a recent report. They called for emergency funding to stabilize affordable housing and state action to reduce insurance costs.

The Trump factor

Mamdani pledged the “most ambitious agenda to tackle the cost-of-living crisis this city has seen since the days of Fiorello La Guardia” after he won the November election.

But Mayor La Guardia accomplished his agenda during the Great Depression with help from Franklin Roosevelt in the White House and a Democratic Congress to pass New Deal programs funding public works, social programs and other progressive policies.

Mamdani, instead, has a federal government controlled by Republicans cutting funding to key social programs such as Medicaid and SNAP and a president often hostile to cities.

The state estimates that Republicans’ One Big Beautiful Bill passed over the summer will result in 1.5 million New Yorkers losing health insurance coverage; 300,000 households losing some or all of their SNAP benefits; $13 billion in cuts to New York’s health care system with 200,000 job losses; and higher long-term energy costs by eliminating clean energy projects.

Although President Donald Trump and Mamdani had a surprisingly chummy meeting in the White House in November, the administration is withholding $18 billion federal funding for transit projects in New York City.

Tariffs, restrictive immigration policies and federal cuts pose a “challenging climate for cities like New York,” New York City Comptroller Brad Lander said in a December report. “Going forward, New York City’s economic trajectory will depend heavily on federal policy choices.”

Mamdani expressed optimism, however, that the city and federal government could work together on lowering costs in that November meeting.

“I’m really looking forward to delivering for New Yorkers in partnership with the president on the affordability agenda.”

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