Breaking New York City: The Destructive Economics of Mamdani’s Rent Control

Mayor Mamdani has the votes to implement his destructive socialist rent-freeze program.

The rent freeze, a day-one promise that critics said was impossible, is likely coming this June through the New York City Rent Guidelines Board (RGB), rather than the City Council or State Legislature.

As of February 2026, Mayor Mamdani reshaped the board by appointing a majority aligned with his campaign pledge to freeze rents for the city’s nearly one million rent-stabilized apartments.

This month, three board members originally appointed under Eric Adams resigned or stepped aside, allowing Mamdani to appoint six members to the nine-member board. That effectively stacked the deck for a June 2026 vote.

While the mayor cannot legally order a rent freeze, his power to appoint board members is his primary lever of control.

Critics, including landlord groups such as the New York Apartment Association, have already signaled potential legal challenges, arguing that the board must base its decision on economic data, such as inflation and building costs, rather than political mandates.

Mayor Mamdani immediately appointed six new members, including a new chair, Chantella McChill.

This gives him a decisive hand-picked majority on the nine-member board much earlier than expected. On the surface, this sounds like a victory for tenants staring at a lease renewal, but in economics, there are no solutions, only trade-offs.

Looking at the data from St. Paul and San Francisco shows that rent freezes not only hurt landlords, but also cause new construction to grind to a halt and units to be removed from the rental market.

In 2021, St. Paul, Minnesota, passed one of the strictest rent-control laws in the United States, a 3 percent cap with no exemption for new construction.

Immediately after the law passed, housing permits in St. Paul dropped by 80 percent, while permits in neighboring Minneapolis, which had no such cap, rose.

Developers and lenders argued that with frozen or capped revenue, they could not secure the bank loans needed to build. By 2022 and 2023, the city was forced to water down the law, exempting new buildings for 20 years just to restart construction.

A well-known 2018 Stanford study analyzed the long-term effects of San Francisco’s rent-control expansion in 1994. While the law kept current tenants in their homes 20 percent more often, it also incentivized landlords to exit the rental market.

Landlords reduced the supply of rental housing by 15 percent by converting apartments into luxury condominiums or tenancies-in-common to escape the regulations.

This reduction in supply drove citywide rents up by 5.1 percent for everyone else. Instead of keeping the city affordable, it accelerated gentrification by replacing middle-income rental units with high-end, owner-occupied housing.

A rent freeze not only reduces costs for renters, it also decreases income for landlords. While socialists are conditioned to view landlords as parasitic enemies, the economic reality is that they are businesspeople who operate to achieve a positive return on investment. That becomes difficult under rent control, which freezes revenue while costs continue to rise.

Last year, insurance premiums for multifamily buildings in New York rose by roughly 12 percent. Electricity prices increased by 10 percent and water by 8.5 percent in 2024, and they continued rising through 2025 and into 2026.

As a result of these cost increases and others, overall operating costs for buildings in New York City rose by 11.5 percent, while revenue to landlords increased by zero percent.

Landlords are already operating on thin profit margins, and those margins evaporate when costs increase but rent does not. The impact appears in cuts to maintenance and repairs.

Painting and plastering, such as repainting hallways or fixing non-structural cracks, are delayed indefinitely. Cleaning services for hallways and lobbies are reduced from daily to weekly or stop entirely, leading to trash buildup and odors. Landscaping and lighting, including replacing burnt-out bulbs or maintaining greenery, fall to the bottom of the list.

Boiler and HVAC service shifts from preventive maintenance to emergency repair. Instead of annual tune-ups to ensure efficiency, landlords wait until the boiler breaks before calling a technician, resulting in more frequent no-heat days for tenants.

Roof and gutter cleaning is neglected, leading to slow leaks that eventually cause mold, which is far more expensive to repair. Elevator service contracts may be reduced and routine inspections skipped, resulting in more frequent “Out of Service” signs.

Property tax accounts for about 30 percent of New York City’s budget. Building values, for resale, lending, and tax assessment, are determined largely by income potential.

When rent is frozen, potential revenue declines and building values fall. That makes it harder or even impossible for landlords to borrow against their properties.

It also makes it more difficult to buy, sell, or finance new construction. At the same time, lower valuations reduce property-tax revenue to the city government.

This creates a revenue hole. A 2025 estimate from the New York Apartment Association suggested that a multi-year rent freeze could cost the city more than $1.3 billion in lost tax revenue over four years due to declining property valuations.

From a renter’s perspective, anyone with a rent-frozen apartment will remain in that unit as long as possible. Consequently, turnover decreases, potentially dropping to near zero. The total supply of apartments available to new tenants shrinks, driving prices up.

In the end, Mamdani’s socialist policy to help renters will cause a shortage of apartments, an increase in average rents, and a collapse of services in rent-frozen buildings, while also decreasing city revenues

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