On New Years Day outside New York’s City Hall, Zohran K. Mamdani delivered an inaugural speech demonstrating the self-contradictions that brought him to office. The biggest such dilemma for Mamdani: in thinking that he can promise broad “affordability” by decree, he doesn’t understand that free markets—or what passes for them in New York—would respond in ways that he would not like and could not control.
Watching his speech, New Yorkers who weren’t paying attention during the long campaign last year would have grasped why Mamdani won: he has a natural self-confidence and graciousness, but both come with a subtle millennial bite. Mamdani was publicly courteous to his predecessor, Eric Adams, and even called him “Dorothy’s son,” a nod toward Adams’s frequent invocation of his deceased mother. It was thoughtful but also possibly cutting: Would Dorothy have been so proud to see her son as a one-term mayor? Similarly, Mamdani resisted any move toward the center, reiterating that he “was elected as a democratic socialist and I will govern as a democratic socialist.” He even invoked “the warmth of collectivism,” aiming these words more at his detractors than his supporters. It was a classic troll, and the subtext was: you called me a socialist, and even a Communist, but your epithets are powerless against me.
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Mamdani still thinks that his self-confidence and grace can bend markets to his will. He ran on this belief, encapsulated by a phrase in his speech pledging to “make it possible for every New Yorker to afford a life they love once again.”
In attempting to Make New York Affordable Again, though, Mamdani is up against an immense force, bigger than charisma or cunning: the marketplace. New York is unaffordable, or at least expensive relative to many other American cities, for many reasons, including its and the state’s environmental and labor regulations and mandates, which push up costs. But it’s also expensive, at some base level, because of intense market demand that cuts across income and education levels. Rich people want to live here. Poor people want to live here. Young people want to live here. When they get older and have kids, more of them want to stay. New college graduates want to come here. Migrants, lawful and unlawful, come, too.
A mayor can do things to ease cost pressures, of course, including making city government far more efficient and effective, to bring down the cost of government. And Mamdani can continue simply to make New York bigger. Over its past four mayors, for example, New York expanded its housing stock from just under 3 million homes in 1993 to more than 3.7 million apartments or houses in 2023. Building, or rebuilding, these hundreds of thousands of housing units—essentially an entire new city—was a vital step forward. More housing gave upper-income people a far greater choice in quality and location. It marginally eased supply for middle-income renters, too—first, because the state and city government required developers to set aside some below-market apartments in new developments, and the wealthier renters and buyers in those developments could afford to subsidize that cost. Second, by diverting some wealthier renters and homebuyers to newly built apartments and condos, new housing availability eased the pressure on existing housing costs, thus moderating price increases.
But inevitable and immutable market dynamism means that any such mitigation of New York’s high costs—though valuable and necessary—will fall short of making New York “affordable” under Mamdani’s undefined “affordability” threshold. One thing all of New York’s new housing construction didn’t do, for instance, was reduce overall housing prices. Developers, though freed up by somewhat looser zoning laws, built only in response to new demand, and that demand, in turn, helped drive up the price of housing. Building more housing—along with the city’s long-term success, over multiple mayoral administrations, in cutting crime and improving the school system—made for a better city; a better city created more global desire to live in it. New York can and should keep adding more housing, but any theoretical ratcheting down of prices, provided the city remains safe and continues to offer parents good schooling options for their kids, would unleash new demand. Couples cooped up in one-bedroom apartments would seek two-bedrooms, and parents with kids crammed into two-bedrooms would crave more space in three-bedrooms. More supply does not ensure that prices will fall; people respond to those lower prices by demanding more supply.
Mamdani cannot repeal these laws of supply and demand, and he knows it. Instead, he offers a crude answer, one he repeated in his speech Thursday: “Those in rent-stabilized homes will no longer dread the latest rent hike—because we will freeze the rent.” A rent freeze for just under 1 million of New York’s housing units, and less than half of its rental units, would not alleviate New York’s costliness but aggravate it, discouraging landlords from renovating and re-renting empty units because they cannot profit from such units. Regardless of whether Mamdani’s ultimate goal here is to force these buildings into such financial distress that the city takes them over, the equation is the same: if the city maintains below-market and even below-cost rents in any units it takes over, someone else will have to pay to make up the difference.
Mamdani’s universal-childcare plan for infants on up relies on similar magical thinking: childcare is expensive, so let’s make it free. “The cost of childcare will no longer discourage young adults from starting a family,” he vowed, “because we will deliver universal childcare for the many by taxing the wealthiest few.” Again, Mamdani thinks he can wave away the marketplace with his proposals. The risk that wealthier taxpayers would balk at a 50 percent increase in the city’s top income-tax rate, or that businesses would balk at paying what would be, by far, the nation’s highest state and local business taxes, is well known.
Another risk is less discussed: the savings that parents enjoy on monthly daycare and preschool fees will make New York more attractive for middle-class and upper-middle-class families—and that new amenity would show up in the form of even higher rents and mortgages, as families have another reason to move here or stay here. If the government taking on responsibility for broader childcare lowered costs, after all, former mayor Bill de Blasio’s universal pre-K program would have cut overall costs starting in 2014. That didn’t happen.
Mamdani’s platform includes one other plank that assumes static demand: free buses. He reiterated in his inaugural speech a promise that New Yorkers will soon be able to “get on a bus without worrying about a fare hike or whether you’ll be late . . . because we will make the buses fast and free.” Make buses free, though, and demand for them will soar, slowing speeds as more passengers board and disembark at stops. Mamdani has not suggested expanding service—and in any case, that decision, like the fare itself, is not up to him but to the state-run Metropolitan Transportation Authority. Further, if Mamdani does intend to continue the city’s program of building new housing, he must think about new transit beyond making bus service free: the city can’t become vastly denser without investing billions of dollars in new subway, bus, and commuter-rail service.
Mamdani may prefer to ignore the market, but the market won’t ignore him. Yes, the new mayor, should he wish to revisit the city’s environmental and labor costs, could make the city less expensive, to some degree. But the one force that would make New York City radically cheaper, and thus competitive with most other American cities and suburbs, is lower demand. A city that creates enough new jobs and provides a competitive quality of life—as New York has done for the past three and a half decades—will keep attracting new people across the income spectrum. As Mamdani said Thursday, quoting the South African Freedom Charter, New York “belongs to all who live in it.”
Mamdani hasn’t acknowledged how the city and state governments, with their myriad rules and mandates, contribute substantially to New York’s cost of living. And he entirely ignores another reality: that the city’s high costs are bound up with every New Yorker who uses his or her spending power, however vast or modest, to make a life in the city. We complain about forking over every dollar, but we continue to do it—every day.
Photo by Selcuk Acar/Anadolu via Getty Images