New York City Mayor Zohran Mamdani’s attempt to revive an old plan to build 12,000 affordable units atop a rail yard appears to be a long shot, even if he has the support of President Trump.
Mamdani gained headline attention for proposing to build units on a platform above Sunnyside Yard, a 180-acre warehouse and marshaling site in Queens. The idea of ambition has been stuck in neutral for over a decade.
However, real progress in housing affordability in one of the world’s most expensive cities may be more gradual and successful than focusing on one large, expensive, publicly funded project.
Like many cities across the country, New York City officials have struggled with zoning laws as they push to ease 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 expedite the review of affordable projects.
Mamdani already has a December 2024 urban redevelopment ordinance titled “A Real City of Housing Opportunity” in place. City officials said the rezoning could add 80,000 new homes over the next 15 years.
These changes have made it easier to convert office buildings into residences. The law also laid the groundwork for renovating shared housing, but still requires further improvements to building, fire and maintenance codes.
The city is leading the nation in office-to-residential conversion. In his last month in office in December, former Mayor Eric Adams said more than 12,000 units have begun operating, with more jobs announced this year.
The apartment units are sitting empty
New York City still has a long way to go to address its nearly 1.4% housing vacancy rate. That rate does not include stable empty units, which some estimates suggest could be as high as 100,000.
Landlords keep apartments vacant on purpose because they cannot raise rents enough to cover the costs of renovations for new tenants.
A 2019 state law closed a loophole that previously allowed landlords to remove apartments from rent stabilization during major renovations.
Construction costs skyrocketed during the COVID-19 pandemic and haven’t come down that much since. That change in cost has changed the financial calculations for homeowners with stable units.
A favorable ruling in a federal lawsuit filed by multiple landlords could unlock some of those vacant units. The lawsuit says the part of the 2019 law that closed the loophole is unconstitutional.
Making incremental progress early
Until the city figures out what to do with vacant, unrented homes, it’s making little progress on new housing.
The city’s new Expedited Land Use Review process — created by one of the insurance amendments — has its first work underway. The proposal seeks to add 84 income-restricted units to city-owned land in the Bronx. The review is required to take 90 days by law.
Mamdani’s office says this shortens the review process by about seven months. Construction of the Powerhouse Apartments is expected to begin in 2028.
Pending New York City Council legislation would allow the conversion of office buildings to one-bedroom apartments, both in existing buildings and new Class A buildings. The legislation is supported by the administration.
“The reintroduction of purpose-built housing types provides a new set of tools to expand housing opportunity and choice for New York’s growing single population,” Michael Sandler, assistant commissioner of the city’s Department of Housing Preservation and Development, said at a December Council committee meeting.
Sandler said the legislation would establish clear rules for designing, living and maintaining safe shared housing. His department published a guide to shared housing in November.
Converting redundant offices into living space
Engineer from New York RXR Realty Company secured a $420 million loan to convert a Financial District office building into nearly 800 apartments, with 25 percent designated as affordable. The developer is using tax breaks introduced by state lawmakers through 2024 for projects that include a quarter of new affordable units.
Bushburgalso a New York developer, recently acquired a 1970s office building in the Financial District and is converting it into 400 apartments, 100 of which are designated affordable. The developer secured a $78 million loan Oak money again OakNorth Bank.
“We felt confident that the city needs housing and it needs affordable housing,” Jeremy Levart, founder and principal of Oak Funding, said. Builder’s Day.
Loud noises swell, but it can be silly
Mamdani is bringing back the program that appeared 10 years ago under Mayor Bill de Blasio. It was out of power in 2020 when the pandemic started.
This idea may be tried again, even if Mamdani persuades President Trump to support it. Funding can be 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 landmark condominium and apartment towers, told the New York Post in 2015 that the approach was absurd.
“It’s too expensive,” he said.
Experts say affordable labor union mandates cannot be sustained without massive subsidies. Building on top of an active rail platform also poses significant engineering challenges and management hurdles.
Focusing on the core activities of small projects that require minimal public funding may be Mamdani’s best chance for significant progress.
