New York City’s socialist mayor, Zohran Mamdani, promised not just to freeze rents for 1 million rent-stabilized apartments in the city, but also to build another 200,000 affordable units and preserve another 200,000. Those goals just got harder because the two biggest buyers of mortgage loans, Fannie Mae and Freddie Mac, have responded to the mayor’s economics by making it harder for property owners to obtain financing.
Mamdani campaigned throughout 2025 on a promise to “freeze the rent” for people living in New York City’s 1 million rent-stabilized apartments, 44% of which are occupied by people born outside the United States. Mamdani first had to replace six of the nine members of the city’s Rent Guidelines Board before he could secure the votes needed to make good on his promise, but once his lackeys were in place, the mayor pushed through the rent freeze in June.
Fannie Mae, the government-backed mortgage buyer that traditionally serves larger banks, now requires lenders to calculate how much a building can borrow on the assumption that stabilized rents will remain frozen for four to eight years while expenses rise by at least 5% annually. Freddie Mac, the government-backed mortgage buyer that traditionally serves smaller banks and credit unions, has stopped lending on rent-stabilized buildings entirely. That means less access to capital for owners and developers, leaving less money to maintain existing buildings and build new ones.
For tenants, the consequences will begin with the buildings they live in. Owners who cannot borrow to replace a failing boiler, repair a leaking roof, or modernize an elevator will put off that work, allowing small problems to become expensive emergencies. Over time, some apartments will deteriorate beyond what their owners can afford to repair and disappear from the rental market altogether. A policy sold as preserving affordable housing will instead help make it uninhabitable.
The same financing squeeze will undermine Mamdani’s promise to build more affordable homes. He said he would spend $22 billion over the next five years building 200,000 new affordable homes. He planned to combine that spending with private investment to build bigger buildings. Now his model is in jeopardy. Smaller private loans mean developers must rely more heavily on taxpayer subsidies, which means fewer units will be built, if any get built at all.
Even buildings that combine market-rate and rent-stabilized apartments will feel the pressure. With regulated rents frozen while expenses climb, owners will look to market-rate tenants to make up the difference. So while those New Yorkers lucky enough to have the political connections to secure rent-stabilized housing will see their rents frozen, everyone else will see their rents rise more sharply.
Mamdani praised Austin’s housing boom when he unveiled his own plan in May. But his socialist approach points in the opposite direction. Austin made it easier to build and allowed rents to follow the market, unleashing a wave of construction that gave tenants more choices and pushed rents down. Where Mamdani promises “tenant power” through restrictions on landlords’ ability to collect rent and evict nonpaying tenants, Austin operates within a system that gives owners greater confidence that their property rights will be respected.
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The difference matters greatly. Developers build when they can reasonably expect to recover their investment, and owners maintain buildings when rental income can cover their costs. Austin’s success came from making it easier to provide housing. Mamdani is making housing more expensive to own, harder to finance, and less attractive to build.
New York Democrats voted for Mamdani’s socialism. Now they are getting it good and hard.