Small Landlords Prepare to Sell If Mamdani Wins

Mayoral candidate Zohran Mamdani’s proposed rent freeze is sending small landlords of rent-stabilized buildings scurrying for the exits. Trading their properties is no easy feat, though.

Mom-and-pop landlords in New York City expressed fear about how Mamdani’s policies could impact their businesses, according to the Wall Street Journal. A rent freeze, in particular, could hinder the income of landlords already squeezed by a monumental change in law from 2019.

Landlords are barely making enough from rent to cover expenses. High inflation and elevated interest rates are dogging the industry further, not to mention the 2019 law that restricted owners from raising rents in many cases.

Since then, sales of rent-stabilized multifamily properties with at least 10 units have fallen. Marketed buildings aren’t moving quickly enough and sellers are being forced to chop 10 percent off the price on average, according to Parkview Financial’s Paul Rahimian.

Acquisitions of buildings with at least 75 percent rent-stabilized units hit $751 million last year, a decrease of more than 70 percent from 2018, according to Ariel Property Advisors.

Despite those obstacles, Mamdani’s proposal has landlords ready to try and cut bait. One small landlord in Brooklyn told the Journal that she will sell if Mamdani wins, as she’s already struggled to refinance the four-unit property and is in the process of evicting several tenants.

The Mamdani campaign said the candidate is “committed to protecting the livelihoods of small landlords and maintaining a stable, functioning property market.” His campaign highlighted Mamdani’s support of a hardship exemption for landlords who can justify why they need to hike prices.

A growing chorus argues that something needs to be done. In the spring, the nonprofit watchdog Citizens Budget Commission called on the Rent Guidelines Board to take steps to avoid a “maintenance ‘death spiral’” in which the expense of repairs surpasses what it would cost to build a whole new building.

— Holden Walter-Warner