Harsh Real Estate Realities Await Housing Pledges Of New Generation Of Mayors

A new progressive generation of mayors in some of the country’s biggest cities are embracing pro‑growth housing reforms as they champion tougher tenant protections and affordable housing funding to mitigate a worsening housing crisis.

The three Democrats running New York, Boston and Seattle have shunned more moderate stances when it comes to housing policy, targeting affordability through increased funding and more flexible zoning while holding firm on regulations.

The result is an uneasy balancing act, according to many real estate leaders, who warn that the math behind new development is getting more difficult, even causing some to avoid these cities entirely, despite renewed efforts to ease the building process. 

“They want development, so they’re looking at expanding development opportunities, but they continue to crush operations through more rigorous tenant protections,” said Sean Flynn, board president and executive director of the Rental Housing Association of Washington. 

Roughly half of the renter households in America, some 22.7 million, were rent-burdened in 2024, according to the most recent data available from the Census Bureau. That is the highest number ever recorded, the Harvard Center for Joint Housing Studies reported.

Mayors from Zohran Mamdani in New York City to Katie Wilson in Seattle have made addressing these affordability challenges major planks in their platforms, promising to remove hurdles and bureaucratic bottlenecks and provide rent relief for working families.  

“The development community looks at this as an opportunity to unlock a whole bunch of extra units,” Flynn said. “But the problem is, how do you operate them once they're built?”

The last couple of weeks in New York have offered a microcosm: Mamdani has released the Streamlining Procedures to Expedite Equitable Development report, an overview of bureaucratic hurdles to building and plans to overcome them, while the city’s Rent Guidelines Board took a step closer to potentially freezing rents on more than 1 million units. 

But these two priorities don’t share equal support in the real estate community. 

“That oftentimes has manifested in policies that both embrace increasing the construction of their homes but also stabilizing people in their homes today,” said David Garcia, deputy director of policy for the Terner Center for Housing Innovation. “Those things can often be in tension with one another.”

Boston Mayor Michelle Wu is the most tenured of the three mayors, originally elected in 2021 and reelected last November. She has successfully pushed for more stringent affordable housing requirements and a stricter energy code and is pushing for a transfer tax and rent control.

But while these policies are well-intentioned, they are making it harder for developers, according to NAIOP Massachusetts CEO Tamara Small. 

“These goals are laudable goals to ensure we have more affordable housing,” she said. “We need more affordable housing in the city of Boston. We also need more market-rate housing. Unfortunately, the policies in place ensure that we're not getting either one of those things.”

Increased costs cut into profits for apartment landlords, according to a National Apartment Association study released last December and based on 2024 data. Average operating expenses reached more than $8,600 per unit, with payroll and administration costs making up about 25% of the total. 

Other groups, like the National Multifamily Housing Council, have argued that increased regulations also increase the cost of operating buildings. A recent NMHC report cites how just-cause eviction regulations and tenant protections can increase vacancies and raise carrying costs for empty units.

Wu passed a just-cause eviction ordinance through her city council in 2023 as part of a larger rent stabilization package. In New York, Mamdani has focused on tenant rights and enforcing the state’s 2024 Good Cause Eviction laws.

That’s where CRE organizations have been adamant in opposing many policies, which they argue threaten the financial stability of multifamily operations, especially rent-stabilized buildings. Factor in, say, a potential rent freeze, property tax hikes or larger inclusionary housing requirements, and operators feel increased revenue pressure.

“There needs to be some recognition of economic realities,” Real Estate Board of New York Vice President of Public Policy Basha Gerhards said. “You can't keep squeezing the same sector over and over again.”

Efforts to lower rent through new construction will run into mounting costs, according to Kenny Burgos, president of the New York Apartment Association. Through the end of February, construction costs jumped 12.6% in 2026, a further weight on an industry that’s also facing annual rent growth of just 0.3% in April and higher concessions. 

He also argues that what he calls “forced affordability without subsidy” isn’t working.

“The system is breaking under its own financial architecture,” Burgos said about New York City in particular and other large U.S. cities in general.  

Mamdani’s administration has made some effort to address operating expenses, according to Felix Ciampa, executive director of the Urban Land Institute of New York, including proposing city-run insurance to help lower costs for affordable housing landlords. 

“He's heard how operating expenses and the costs and the impediments are an issue that have to be addressed,” Ciampa said. “And I think that he is taking action there to address that.” 

What Mamdani has yet to do is push a broader economic development and jobs message and lay out a growth strategy for the city that incentivizes more investment, Ciampa said. REBNY’s Gerhards agrees, arguing that there needs to be a more measured tone between economic populism and equity as well as development. 

In the case of Wilson in Seattle, who is the co-founder and former CEO of the city’s Transit Riders Union, the more progressive approach to housing policy “isn’t that much of a shakeup, considering the general bent of recent city politics,” Flynn said.  

Wilson has criticized past “stingy” upzoning plans, and pushed for more, saying “increased housing capacity is the foundation to meet the scale of our housing crisis.”

But while advocating for more building offers opportunities for developers and provides a policy that commercial real estate can get behind, pairing it with stances that make operating apartments more difficult ultimately creates barriers to more building, Flynn said. 

He highlighted Wilson’s outspokenness on junk fees, for instance, as a policy that can add more financial pressure on development. He’s hoping for more signs in the coming months that she’s engaged in finding practical solutions, such as supporting builder proposals to ease mandatory housing affordability fees.

“You can get to a point with your policies that it doesn't matter if you give all the development opportunities you want if people can't make money operating the building,” Flynn said. “Seattle is sort of in the perfect storm for not getting any building done, or the building that does get done fails. And that's maybe your worst scenario because everyone looks at it and says, ‘Well, I don't want to be that guy, right?’”