Former Gov. Andrew Cuomo, defeated handily in the Democratic primary by Assemblymember Zohran Mamdani and now trying again as an independent in the general election, set off another rancorous exchange this week by hitting at Mamdani for living in a rent-stabilized, $2,300-a-month apartment in Queens.

Cuomo, who lives in an $8,000-a-month market-rate apartment now that he’s returned to New York City, contended this was too low for the lawmaker with a $142,000 salary and rolled out a proposal he called “Zohran’s Law,” which would bar new stabilized leases for would-be tenants for whom the rent would be under 30 percent of annual income. The idea puzzled a lot of observers and drew condemnation from some of Cuomo’s own backers.

The real (estate) deal

A few practical points first

  • A rent of $2,300 is not exactly a steal
  • In most of the country, that would be considered a hefty sum
  • Even by New York standards, it’s not a dirt-cheap apartment

I can understand the emotional response: A guy running for mayor on a decent salary could (technically speaking) afford to pay more. The flipside of this proposal is it would essentially require rent-stabilized tenants to be rent-burdened, which is often defined as paying 30 percent of income or more on rent. This same percentage cap mandates rent-burdening, which is the opposite of what most political solutions to the housing crisis are attempting to do.

Let’s do the math

Every type of means testing ultimately increases the friction and operating costs of any program, and it’s quite likely that it would trip up even some prospective tenants who did fall below the threshold. In any case, one clear potential consequence is that such a proposal would effectively ice out middle-class renters — an apartment with a $2,300 rent would have a maximum income level of about $92,000, not nothing but hardly a high roller in New York City — but keep them open to the very wealthy, who often don’t have income per se but do have assets. Someone with millions in investments can borrow at low interest rates against those investments and basically have no income on paper, meaning they could probably snag a rent-stabilized unit out from under a middle-class family that was barred from having it.

In general, it is a relatively consistent talking point that many of the people who benefit most from the city’s system of rent regulation are older and wealthier on average, with commentators often pointing to a Wall Street Journal analysis from a few years ago that seems to establish this. That analysis and others like it, though, don’t exactly say what many people interpret them to say for a couple of reasons. First, the way that tenants’ relative benefit is calculated is to compare their regulated rents with market-rate rents in the same area. People living in high-rent areas are, most times, by default going to have a bigger “discount” on their rents compared to neighborhoods with lower rents, but that doesn’t mean their actual rents are lower.

Let’s look at it as a simple hypothetical: If the median rent on the Upper West Side is $4,500 and a rent-stabilized tenant is paying $2,700, then they are receiving a putative benefit of $1,800 off the market rent. Meanwhile, if the median market rent for a unit in Flatbush is $2,600 and a rent-stabilized tenant is paying $1,800, they’re only receiving a benefit of $800 off the market rent. So, on paper, the wealthier Upper West Sider is getting a benefit worth $1,000 more than the working-class Flatbush denizen, but in real terms, the Upper West Sider is paying a much higher rent.

Bragging rights for rent-controlled apartments

There’s also the fact that a lot of the folks who are getting these enormous on-paper benefits have lived in their units for long periods of time, often decades. So while their relative benefit may have been more even to begin with, living in a neighborhood where the market rate has skyrocketed balloons the value of their benefit, even if their own financial situation does not dramatically shift. It’s worth mentioning, too, that Cuomo’s proposal would not affect people who were already living in a rent-stabilized unit, only new applicants, meaning that it wouldn’t touch these existing disparities (nor, for that matter, Mamdani himself).

In any case, I don’t want to just bash Cuomo’s idea here, even if I do think it is poorly thought out for all the reasons stated above, but I think it is representative of a certain counterproductive way of thinking about the city’s housing crisis — as a zero-sum game where everyone has to fight mightily for the scraps that are left in an environment with an enormous over-demand compared to supply. I will say, at the risk of sparking some ire, that I think Mamdani’s pledge to freeze stabilized rents also strays into this realm as well, given the extent to which market-rate rents can subsidize stabilized ones; it’s releasing pressure on some people while putting the squeeze on others. That sort of protectionist instead of expansionist vision of housing is of a piece with NYMBYist thinking — you’ve got to get yours, and that’s what matters. I would argue that, whether Cuomo meant his proposal in this way or not, that style of thinking is what has deposited us into this crisis in the first place.

The real (estate) solution

The fact remains that competition for lower-priced and stabilized units would not be quite so fierce had the state of affairs not artificially inflated the cost of comparable market-rate units. There is one pretty surefire way to bring down the cost of both types of housing and put less pressure on the city’s rent stabilization system, and it’s the exact same solution that we’ve known about but largely failed to properly implement for decades: attacking the supply part of the problem by significantly increasing the capacity and incentives to build more housing. That’s not a theory; that approach has been successful in multiple jurisdictions where it’s been tried recently, at least partly because it’s just Econ 101 — more of the thing brings the price down.

If we look at Cuomo’s broader housing plans (setting aside the ChatGPT debacle), they do s emphasize the need to construct or preserve half a million new units over the next 10 years, but is a bit light on methodology and, probably owing to Cuomo’s base of often outer-borough older voters of color, take jabs at gentrification and at the construction of much additional housing in low-density areas. (As an aside, I found it amusing that his plan includes a promise to “evaluate” the charter review commission’s proposals for housing, including streamlining the land use process; not support nor oppose, but simply a pledge to take a look.)

That reads as a bit of a red flag for housing advocates, who point out that the primary driver of gentrification — meaning driving out existing residents, as opposed to shifting neighborhood character, which are both lumped in together despite meaning very different things — is not housing construction but its lack.

New people move in and compete for a dwindling housing stock that, had it been larger, could have accommodated everyone, older and newer residents. That means that, as uncomfortable as some political figures might be to say, the only way to preserve long-term affordability in a city as dense and desirable as New York is to build in every neighborhood, including those that have grown accustomed to stasis. That doesn’t mean that you’re going to start putting high-rises in pseudo-suburban Queens, as the fear-mongering goes, but there’s no reason not to have multifamily homes in mixed-use buildings that rise maybe four or five stories, especially clustered near transit. A gimmicky means test that even the landlord groups don’t like is not going to cut it.

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