New York Mayor Zohran Mamdani’s attempt to revive an old plan to build 12,000 affordable units on a city site is seen as a gamble even if he wins support from President Trump.
Mamdani has received a lot of attention for his proposal to build units on a platform above Sunnyside Yard, a 400-acre freight and marshalling area in Queens. The ambitious idea has been in neutral for more than a decade.
However, real progress on housing affordability in one of the most expensive cities in the world could be more gradual and effective than focusing on a single large, costly, government-funded project.
Like many cities across the country, New York City officials have struggled with local zoning laws as they push to simplify housing construction.
In November, voters approved four amendments to the city charter related to affordable housing. They also chose Mamdani, in part because he promised to speed up planning reviews for affordable projects.
Mamdani already has a citywide rezoning ordinance from December 2024 titled “City of Yes for Housing Options” at its disposal. City officials stated that this rezoning could potentially create 80,000 new homes over the next fifteen years.
The changes made it easier to convert office buildings into homes. The ordinance also laid the groundwork for reviving shared housing, but still requires other updates to building, fire and maintenance codes.
The city is a leader in the country when it comes to the conversion of offices into homes. In his last month as president in December, former Mayor Eric Adams said there are already more than 12,000 units in the pipeline, with more projects announced this year.
Apartments are empty
New York City still has a long way to go to address its approximately 1.4% apartment vacancy rate. That percentage does not include vacant rent-stabilized units, which some estimates suggest could be as high as 100,000.
Landlords deliberately keep apartments empty because they cannot raise rents enough to cover renovation costs for new tenants.
A 2019 state law closed a loophole that previously allowed landlords to withdraw apartments from rent stabilization during substantial renovations.
Construction costs soared during the COVID-19 pandemic and haven’t dropped much since. That change in costs changed the financial calculations for landlords who own rent-stabilized units.
A favorable ruling in a federal lawsuit filed by multiple landlords could unlock some of those vacant units. The lawsuit claims that the portion of the 2019 law that closed the loophole is unconstitutional.
Making early progress
Until the city figures out what to do with vacant, unrented properties, it will make little progress on new housing.
The city’s new expedited land use review process — created by one of the charter amendments — has its first project underway. The proposal aims to add 84 income-restricted units on city-owned land in the Bronx. By law, the assessment takes 90 days.
Mamdani’s office says this shortens the review process by about seven months. Construction of the Powerhouse Apartments is expected to begin in 2028.
A pending New York City Council ordinance would allow office buildings to be converted into one-room residences, both in existing buildings and in new Class A apartment buildings. The regulation has the support of the government.
“The reintroduction of purpose-built shared housing models provides a new set of tools to expand housing options and choice for the growing population of single New Yorkers,” Michael Sandler, assistant commissioner in the city’s Housing Preservation and Development Department, said at a December City Council hearing.
Sandler said the ordinance would establish clear rules for designing, occupying and maintaining safe shared housing. His department published a joint housing roadmap in November.
Convert outdated offices into homes
Developer from New York RXR Real Estate received a $420 million loan to transform an office building in the Financial District into nearly 800 apartments, 25 percent of which were designated as affordable. The developer is taking advantage of a tax break introduced by state lawmakers in 2024 for projects where a quarter of the new units are affordable.
Bushburgalso a New York developer, recently purchased a 1970s office building in the Financial District and is transforming it into 400 apartments, 100 of which are designated as affordable. The developer has secured a $78 million loan from Oak financing And Oak Northbank.
“We felt confident that the city needs housing and affordable housing,” said Jeremy Levart, co-founder and director of Oak Funding. The builder’s newspaper.
Going big sounds good, but it can be foolish
Mamdani is bringing back a plan that originally appeared more than a decade ago under Mayor Bill de Blasio. In 2020, momentum lost when the pandemic hit.
The idea could run into trouble again even if Mamdani can convince President Trump to support it. Financing could become a problem.
The estimated cost in 2020 was $21 billion and would require significant federal assistance. The late architect Robert AM Stern, known for designing notable condominium and apartment towers, told the New York Post in 2015 that this approach was naive.
“It’s just so expensive,” he said.
Experts say the fully affordable mandate for union workers is unsustainable without major subsidies. Building on an active railyard also presents significant technical challenges and bureaucratic hurdles.
Focusing on the basic tasks of smaller projects that require less government funding could be Mamdani’s best chance for significant progress.
