_WHAT’S HAPPENING_
Socialist New York City Mayor Zohran Mamdani recently released his "Block by Block" housing plan, a $22 billion proposal to build 200,000 affordable, rent-stabilized units and preserve another 200,000 over the next decade.
The plan includes a provision allowing the city to take "aggressive legal action" against landlords deemed “negligent,” seize their property, and transfer it to nonprofits, community land trusts, or even to tenants themselves.
This approach relies on programs that have repeatedly failed, while such harsh and arbitrary regulations threaten to drive developers and capital out of the city.
_THE FACTS_
While the plan is meant to combat “negligent landlords,” it does not specify what negligent actually means.
Rent-stabilization regulations often prevent landlords from performing regular maintenance and renovations.
Zoning laws and NIMBY (Not In My Backyard) voters often block new housing from being constructed, straining supply and raising prices.
The city would use its existing 7A program to drag landlords to court and appoint nonprofits to take over building management.
Five decades ago, New York City tried a similar approach, taking over abandoned properties and turning them into nonprofits; the city became the state's largest slumlord.
A state AG investigation found nearly all of the city's 1,100 affordable co-ops were "high risk," requiring a $750,000 bailout last year.
A February report found 290,000 subsidized, nonprofit-run buildings in the city were financially underwater.
One NYC business leader warned that developers "are better off in other cities than the ones with huge amounts of regulation."
The plan requires wages of at least $40 per hour on affordable housing projects.
New York City's median asking rent now exceeds $3,600 per month.
_OUR TAKE_
Mamdani's plan is not some novel creation of Democratic Socialism. It actually has a long track record of failure. The 7A program and affordable co-op model have existed for decades and have required repeated government bailouts.
The Washington Post editorial board captured pretty well the contradiction at the heart of the plan: "If a policy has such negative effects that it requires a special fund for relief and temporary exemptions to enforcement, why not make the exemptions permanent — or abandon the policy altogether?"
Mamdani's team quietly acknowledged this problem by carving out rent-freeze exemptions for 300,000 vacant units, a tacit admission that market forces remain necessary. Perhaps if Mr. Mamdani tried expanding the use of market forces, property seizures and multi-billion dollar funds would not be necessary in the first place.
