How Mamdani and Cea Weaver Plan to End Private Housing

Their proposals would make many apartment buildings impossible to sustain. That’s by design.

By Allysia Finley. Excerpts:

"Ms. Weaver’s crowning achievement is a 2019 state law that restricts New York City landlords’ ability to pay for renovations by raising rent and does away with the ability to deregulate rent-stabilized units—which account for nearly half the city’s rental housing—when tenants move out. The law upended landlords’ investment models, slashed building values, and fueled runs at two regional banks."

"The Federal Deposit Insurance Corp. struggled to find a buyer for Signature’s toxic $15 billion in mortgages that were backed mostly by rent-stabilized buildings."

So the FDIC turned over management of many of the buildings to a collective of nonprofits with financial backing from the New York City Employees’ Retirement System. A year after Signature’s collapse, New York Community Bancorp (now Flagstar) triggered a panic when it flagged that 14% of its $18 billion rent-regulated loan book was at risk of default."

"Rent-stabilized buildings have been selling at steep discounts, some for less than the cost of a NYU degree."

"A rent-stabilized building in East Harlem this spring sold for 3% of its 2016 sales price. A city pension fund investment in rent-stabilized housing—once projected to mint eye-watering returns—has declined by 70% since the 2019 law was enacted."

"The city pays nonprofits up to $380,000 a unit to repair dilapidated rent-stabilized apartments, which can exceed the market value of the entire buildings."

"A private real-estate firm has sought to buy Pinnacle’s rent-stabilized apartments in bankruptcy for a pittance. But a city attorney tapped by Mr. Mamdani last week sought to block their sale by arguing to the judge that—get this—rent restrictions would prevent the firm from maintaining the units."