Real Estate Issues Eric Adams Has Left for Mamdani

Every mayoral administration leaves office with unfinished business, be it specters of campaign promises gone unfulfilled or ambitious plans approved but not yet enacted.

Such loose ends can haunt incoming administrations but can also lay the groundwork for future wins. Others are tossed aside as a new mayor sets their own agenda.

“It is a balancing sort of thought process between ‘how I, as a new administration, can make a big splash, and ensure what I do is feasible,’” said Anita Laremont, a partner at Fried Frank and former director of the Department of City Planning.

When Mayor Eric Adams came to office in 2022, he promised to cut red tape to make it easier to build in the city. He also pledged to overhaul the city’s property tax system.

On the first, his administration created paths for some housing projects to skip environmental review, approved sweeping zoning changes aimed at “building a little more housing in every single neighborhood” and initiated an overhaul to the city’s land use review process.

On the second, Adams joins his predecessors in failing to deliver.

Mayor-elect Zohran Mamdani has said he wants to pick up that torch. His administration will also need to oversee how some of the zoning changes approved under Adams play out.

Here are some of the biggest outstanding real estate issues as Adams exits City Hall:

Big zoning changes

The City of Yes for Housing Opportunity, approved in December 2024, was the centerpiece of the Adams administration’s housing plan. The text amendment eliminated parking requirements for newly constructed housing in certain parts of the city, legalized accessory dwelling units, created a new density bonus for affordable housing, made more office buildings eligible for conversion into housing and included several other changes aimed at making it easier to build housing in the city.

Given the breadth of these changes, it will take time to roll them out. For example, the city only just opened applications for homeowners to add ADUs to their properties in September.

Laremont said developers with existing projects are figuring out how to apply aspects of City of Yes to their projects and whether changes are compatible with certain city programs. She thinks there will need to be a “reckoning” between the City Planning, the Department of Buildings and the Department of Housing Preservation and Development to ensure that the agencies are implementing the changes uniformly.

That will be left to the leaders of these agencies under Mamdani.

Mamdani’s administration will also be tasked with applying the housing ballot measures approved by voters in November. The changes will create pathways for certain affordable housing projects to bypass City Council approval. It will also create an appeals board that will be able to reverse the Council’s rejection of projects that would add affordable housing in one borough.

The next administration will not only have to navigate the technical aspects of those changes, but the political implications of them as well, including how these measures affect the mayor’s relationship with the next City Council speaker.

Under the Adams administration, the City Council approved five neighborhood rezonings, which are projected to add nearly 50,000 new units of housing in the city. Of course, those estimates depend on a number of factors, including construction and labor costs, as well as available public subsidy. The various pledges made under these rezonings — such as the nearly $2 billion commitment made by City Hall as part of the Long Island City rezoning — will fall to the next administration to carry out.

Potential zoning changes

Just before heading out of Gracie Mansion, Adams is expected to leave his successor with blueprints for ramping up housing construction in Manhattan.

The so-called Manhattan Plan is slated to be released by the end of the year and include strategies for building 100,000 new housing units in the borough over the next decade. Some already approved initiatives — including the Midtown South rezoning and changes under City of Yes — are baked into that estimate. Proposals to build on city-owned sites, including 100 Gold Street, are also included in that count. It isn’t clear what else will be included in the plan, but it could recommend upzoning other parts of Manhattan.

That could mean permitting buildings that are more than 12 times larger than the size of the lots they rise from, meaning they have a floor area ratio, or FAR, higher than 12. This has only happened once since the state lifted a cap on residential density in the city last year. The Adams administration mapped higher residential density districts as part of the Midtown South rezoning, and the city hasn’t yet identified other areas where it will apply the higher residential FARs.

A spokesperson for City Planning noted that it is not uncommon for planning initiatives to span multiple mayoral administrations.

Laremont said the Manhattan Plan could serve as a “jumping off point” for the next mayor. “In most planning things, there are really long-term windows to get things done,” she said.

Basha Gerhards, executive vice president of public policy at the Real Estate Board of New York, said that sometimes ideas need time to percolate before catching on. A proposal to make it easier to convert office buildings into housing, for instance, was talked about at the end of the de Blasio administration and was picked up by Adams.

“Sometimes these things just take a long time to be socialized,” she said. “People need to get used to big changes.”

The Adams administration is leaving other land-use initiatives and projects on the table.

To secure the City Council’s support for another text amendment, the City of Yes for Economic Opportunity, the administration promised to advance a proposal that would require special permits for last-mile facilities spanning 50,000 square feet or more. The proposal hasn’t yet started the city’s review process for text amendments (which is similar to Ulurp).

The next mayor will need to decide whether to pursue this change. Abandoning the effort, however, would potentially alienate the City Council. REBNY has opposed the text amendment: Gerhards said, as currently written, the proposal would be an “economic killer to the industry.”

City Planning also began public engagement this year on a plan to encourage more housing construction in an area surrounding White Plains Road in the Bronx. Any rezoning proposal there will need to be picked up by a future administration.

The next mayor may also prioritize certain projects that are already in the works. Mamdani indicated that he wanted to move forward with housing at the Elizabeth Street Garden site, but the Adams administration quietly designated the property a city park. The developers selected to build senior housing on the site sued the administration on Wednesday, arguing that the mayor lacks the legal authority to do so.

There’s also One45, a three-building project approved for West 145th Street and Lenox Avenue. The developer is willing to increase the project’s affordability levels, but has indicated that public subsidy is necessary to do so.

Evan Thies, a former Adams advisor, said the lowest-hanging fruit for the next administration is already-approved projects and major rezonings and ensuring those are funded and moving forward.

“One point of concern, from the real estate industry, is that if you are too focused on just building city housing, for instance, then you won’t be putting the resources into housing that is low-hanging fruit on the private side,” he said.

State of rent-stabilized housing

Mamdani told Pix11 in November that his “first order of business” once he takes office in January will be to freeze the rent for stabilized tenants, one of his core campaign promises.

Landlords of these properties have warned that such a move would spell further disaster for this housing stock, which is already seeing rising defaults and foreclosures or trading at deep discounts. Distress has also hit nonprofit owners of stabilized housing. Nonprofit lender Community Preservation Corp. reported in August that across its rent-stabilized portfolio, the number of foreclosures increased eightfold since 2022, and the delinquency rate more than doubled.

Landlord groups have pushed for reprieves, including changing the rules around increasing rents on apartments once they become vacant, but state lawmakers have shown little interest in pursuing such legislation.

The Rent Guidelines Board under Adams moved away from the rent freezes approved during the de Blasio administration, and approved increases between 2.75 and 3.25 percent for one-year leases. He often emphasized the need to help small landlords keep up with rising costs.

HPD also launched a pilot program to help landlords pay for repairs, but no owners have participated. Landlord groups have argued that the funding was inadequate for the level of distress in stabilized buildings.

Mamdani has said that he supports finding ways to reduce costs for owners, including by finding alternative forms of insurance and by reforming the city’s property tax system.

Property tax reform and tax breaks

When Adams campaigned for mayor in 2021, he promised to tackle the city’s “unfair and overly complicated” property tax system during his first year in office.

That didn’t happen that year nor the ones that followed, though the administration indicated earlier this year that it was working on a proposal. So, there is still time for Adams to follow former Mayor Bill de Blasio’s lead and release a plan for reforming the system in his final days in office, though the mayor has never presented a fleshed-out vision for this.

Whatever happens on that front, the issue will be left to the next mayor to address. Mamdani has said that he supports comprehensive property tax reform, and has even pointed to Tax Equity Now New York’s nearly decade-old lawsuit challenging the system and recommendations made at the end of the de Blasio administration as potential paths forward.

TENNY has maintained that the city must make changes to how one-, two- and three-family homes, as well as condo and co-ops, are assessed. The group is waiting to see whether a court will force the city’s hand.

Mamdani has also said that he supports extending the tax break J-51, which expires in June. The latest iteration of the program provides property owners with an abatement equal to as much as 70 percent of the cost of major building renovations over the course of up to 20 years. Landlords have criticized it, however, because eligibility is limited to buildings that are at least 50 percent affordable, part of the state’s Mitchell-Lama program or that have received “substantial government assistance.”

Renewing J-51 would require state action, as would amending the 485x tax exemption. Developers argue that the construction wage requirements for 485x are stunting housing construction. A wage floor kicks in for projects with more than 99 units, and then steeper rates go into effect in certain parts of the city for projects with 150 or more units.

It remains to be seen if there will be enough political will to change the program next year, given that Gov. Kathy Hochul is up for reelection and any rollbacks of the wage requirements would alienate the city’s construction unions.