New York City's Commie-Islamie Mayor Zohran Mamdani imposed a rent freeze earlier this year, and now the nation's two biggest mortgage backers just made it "impossible or extremely difficult for landlords to get financing." If your first response isn't to laugh at this news with a hearty "Gooder and harder, NYC!" you might not want to read the rest of this column — but we have some serious stuff to cover, too. So stick around.
City Reporter's Greg David noted on Monday that "Government-backed Fannie Mae, which has become the lender of last resort for private rent-regulated buildings, has toughened its underwriting standards since the rent freeze passed in June. Freddie Mac, the other government-backed lender, has instituted a 'pause' on new loans while it assesses the impact of the freeze."
David said the decision will result in "severe consequences" for two kinds of apartment buildings. They include "Older, almost entirely rent-regulated buildings that are already under severe financial distress," and "Buildings composed of all affordable units built with city help whose finances are also deteriorating."
Rafael Cestero, CEO of Community Preservation Corp., told David that CPC will make 50% fewer loans to all-affordable projects than it did just two years ago. “I don’t know of any one [who] is making loans on private rent-regulated buildings,” Cestero said.
It's funny what happens when you freeze rents on dwellings that were barely making any money to begin with — if that — and now need repairs, upgrades, or refinancing.
Maybe not laugh-out-loud funny, but still.
All is proceeding exactly as I — and so very many others — have foreseen.
Maybe the city could step in with the financial backing that Fannie and Freddie no longer can, but that won't be easy. Hizzallah used various one-time accounting tricks to hide this year's budget shortfall, but future projections show the deficit rising from roughly $7 billion in 2028 to nearly $10 billion by 2030.
But don't worry about the big scary numbers, because Mamdani certainly doesn't care. He has something bigger in mind: seizing the means of production, or in this case, the places of dwelling.
AEI's Howard Husock warned last summer that the "endgame" of Mamdani's war on landlords "could well be what Mamdani promised in his campaign: housing socialism for thousands of apartments, which would move into city ownership or nonprofit ownership enabled by the city taking and disposing of apartments."
"An estimated 50,000 apartments are being left vacant," Husock added, "because renting them means operating at a loss, thanks to the costs of code compliance."
With owners of rent-controlled apartments losing an estimated $120 per unit per month, Mamdani's rent freeze, basic maintenance costs, and inflation will likely force even more units off the market.
And Another Thing: The only thing government creates in abundance is shortages, and there ought to be a monument to that in D.C. It would consist of a massive pedestal with "THE ONLY THING GOVERNMENT CREATES IN ABUNDANCE IS SHORTAGES," carved into it, and on top of which would be a statue of nothing.
There's the affordability crisis — entirely man-made — that Mamdani will use to "transfer ownership of those properties to politically aligned cadres like tenant cooperatives and nonprofits," Vickie Paladino wrote earlier this year. She also reminded Tablet readers that the effort is "backed by the mayor’s new taxpayer-funded $53 million Office of Mass Engagement."
If Mamdani succeeds, it could prove to be one of the biggest real estate swindles of all time, paid for by taxpayers and ultimately shouldered by the city's worst-off.
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