Zohran Mamdani is already shaking up New York's real estate market.
The 34-year-old Democratic Socialist won a majority of voters Tuesday in the city's mayoral race, on a platform addressing the sky-high cost of living in the city. Opponents say
Benjamin Kaziyev, a mortgage loan originator with Kew Gardens, Queens-based Mortgage Depot, said he's already seeing action.
"They're looking to get out of New York as quickly as possible," he said Wednesday morning of his clients. "I have a client who, unfortunately, has to get a prepayment on his loan and he really doesn't want to, because he doesn't want to stay in New York any more than he has to."
Mamdani's victory could ultimately result in greater transaction volume across the city, some industry professionals suggested. Other dealmakers, also anticipating reactions from their clientele, are cautioning a wait-and-see approach as the mayor's agenda reverberates across the city and to the state capitol.
What Mamdani says about real estate
The state lawmaker will be New York City's first Muslim and first African-born mayor and
To help pay for headline policies such as free buses and city-owned grocery stores, the Mamdani administration will also raise the city's corporate tax to match New Jersey's 11.5% rate, and tax the wealthiest 1% of New Yorkers a flat 2% tax, although it cannot do so without the approval of the New York State legislature.
How will New Yorkers react?
Terry Lockery, regional sales leader at Prosperity Home Mortgage, believes sales will rise. The Rye Brook, New York-based originator just north of the city said he hasn't seen an instant reaction from his mortgage clients, but anticipates the Mamdani news will bump today's
"I think it has an impact, regardless of what side you're on, whether you want to move back into New York or out," he said.
Experts said an exodus could lower prices and draw newcomers. They've also heard of increased activity in markets such as the nearby, upscale Westchester. Some real estate veterans however described migration chatter as overblown.
Mortgage Depot's Kaziyev compared the sentiment of homeowners moving to those who said the same at the time of President Trump's election.
"Did that happen? No," he said. "But it's a lot easier to leave New York than it is to leave to a whole different country."
Other local residents may be adversely impacted by Mamdani's moves. Kaziyev also urged caution for co-op owners around Mamdani's support for
"The ramifications of that being, the maintenance will go up once you have to transition every single co-op and condo to electric," he said. "It's almost like they're trying to squeeze people out."
The city's renters, already paying an average of $4,462 in October according to Redfin, could also be affected by the mayor-elect's policies, explained Corey Cohen, founder of The Roebling Group in Manhattan.
"You're going to see a lot more of the rent stabilized housing market in trouble," he said regarding a rent freeze. "Free market rents could go higher, because you're not going to have enough inventory coming back to life from the rent-stabilized market."
How will investors react?
Mamdani's critics have raised concerns that his policies will discourage investment due to the proposed higher taxes and other issues like criminal justice reform. No matter how the environment unfolds, the markets crave certainty, and the spectre of uncertainty makes it hard to understand values, said Gary Hisiger, chair of the real estate and banking practice at Moritt, Hock & Hamroff.
The real estate and financing transactions expert said he was on two calls Wednesday morning in which two good-sized multifamily buildings sales were put on hold, pending clarity.
"The capital doesn't want to be committed at this point in time," he said. "They're nervous about what the outcome may be and what impact it can have on the future value of the transaction."
Actions around rent control could further impact multifamily operating incomes and values, experts explained. Multiple real estate veterans cited a 2019 city renter protection bill, which they say already limited new supply coming onto the market.
Can Mamdani really impact the housing market?
Some originators declined to speak Wednesday about Mamdani or politics at-large. Others shared their support for independent candidate and former New York governor Andrew Cuomo, however begrudgingly, and said there was no pro-Mamdani sentiment in their circles.
More real estate players didn't show their cards in speaking; the The Real Estate Board of New York in response to inquiries Wednesday offered a brief statement pledging to work with the next mayor on housing affordability.
Politics aside, experts questioned whether Mamdani's agenda could be achieved given the hurdles he'll have to face at the city, state, and potentially federal level. Cohen described the upcoming landscape as the battle between two competing visions for the city: Mamdani's New York of new policies, versus Jamie Dimon's New York of big business.
"I think those are the two larger forces that are always kind of competing within New York," he said. "I'm curious if some of those competing interests will center or moderate some of the rhetoric."
Scott Valins, co-founder and CEO of brokerage GoRascal in Brooklyn, echoed Hisiger in emphasizing people to take a wait-and-see approach. He said he wouldn't be surprised to see a slowdown in real estate transactions, but expected the market would rebound as it has after other major changes, like the state and local tax deduction or the coronavirus pandemic.
"I believe in the long run New York City will be fine," said Valins. "We'll look back at this as just another bump in the road in the long, New York City, stable and strong real estate market."
