July 4, 2025
Mamdani and Affordable Housing Development
CNN quoted me in Zohran Mamdani Has Big Housing Plans. Here’s What Stands in The Way. It reads, in part,
Mamdani’s rent freeze plan could undermine his goal of building 200,000 publicly subsidized, rent-stabilized, permanently affordable homes over the next decade for low-income households and seniors.
That’s because the private sector may be dissuaded from participating if these buildings don’t include market-rate housing. The private sector has a “very important role” to play in building housing, Mamdani has said.
“A rent freeze will change how a conversion might pay off for the developer,” said David Reiss, a law professor at Cornell University who served on the Rent Guidelines Board under Mayor Bill de Blasio.
And to be permanently affordable for extremely low-income renters, it will require deeper government subsidies than Mamdani has pledged, experts say. Previous New York City mayors have attempted to produce housing for a wide range of incomes to help offset higher subsidies for deeply-affordable units.
“It’s in the right direction to focus on people with the greatest affordability challenges,” said Alex Schwartz, an urban policy professor at The New School and a current member of the Rent Guidelines Board. “It’s important to recognize that the capital dollars won’t go as far in terms of total numbers of units if they only go toward people with extremely low incomes.”
Mamdani wants the city to borrow $70 billion to build affordable housing over the next decade, on top of the roughly $25 billion it already plans to invest.
That’s no easy task – he will need state approval since the plan would exceed the city’s debt limit by around $30 billion, as well as the New York City Council’s approval of zoning reforms that would make it easier to build.
“This would be a significant increase in city capital to produce deeply affordable housing,” said Rachel Fee, the executive director of the New York City Housing Conference, a non-profit affordable housing policy and advocacy organization. “It’s not something he can just implement on his own. It will take a political coalition to make this happen.”
July 4, 2025 | Permalink | No Comments
June 30, 2025
Rent Freezes in NYC

Zohran Mamdani, Democratic Nominee for Mayor of NYC
The New York Times quoted me in Free Buses and Billions in New Taxes. Can Mamdani Achieve His Plans? It reads, in part,
A major pillar of Mr. Mamdani’s economic plan is housing: He wants to build 200,000 units of affordable housing and freeze rent on the city’s nearly one million rent-stabilized apartments.
But to build, he has said the city will have to borrow $70 billion, exceeding its debt limit by some $30 billion. Going over the limit would require state approval.
Freezing rent, on the other hand, is relatively straightforward and has precedent. But there are consequences.
Mayors cannot freeze rent on their own, but they do appoint the nine members on the Rent Guidelines Board, which sets rents on the city’s rent-stabilized units.
David Reiss, who served on the board under Mr. de Blasio, said that before it voted, members generally considered the overall state of housing in the city, including affordability, landlord expenses and economic conditions.
He said that members could decide that affordability was the most important factor and vote to freeze rents, as they did in 2015, 2016 and 2020.
“A rent freeze would meet the needs of a lot of people who are having a hard time keeping up with their rent,” Mr. Reiss said, “but it’s an unsustainable operation.”
Landlords, including those whose buildings have a large majority of rent-stabilized units, are increasingly saying that they are not collecting enough rent to maintain units.
“Are we going to be pushing a distinct portion of the housing market into great distress because their expenses are outstripping their income?” Mr. Reiss said.
June 30, 2025 | Permalink | No Comments
May 30, 2025
Fannie, Freddie and Trump

FHFA Director Bill Pulte
Central Banking quoted me in Fannie, Freddie . . . and Donald. It reads, in part,
IIn a client note on May 13, investment management firm Pimco said any privatisation of Fannie and Freddie would be a solution in search of a problem.
“If the GSEs are released but the government remains accountable to come to their rescue, wouldn’t taxpayers ultimately be the biggest loser, once again, by seeing GSE gains privatised but losses socialised?” it said, adding: “Don’t fix what’s not broken.”
David Reiss, professor at Cornell Law School, says Pimco’s view reflects the fact that the mortgage market has been functioning “pretty smoothly” since Fannie and Freddie were nationalised. According to this viewpoint, there is “no need to release them from conservatorship”.
However, Reiss says he does not like to see so much power and influence concentrated in the GSEs, and he believes the private sector would do a better job of evaluating credit risk.
“Some people – mostly investors in Fannie and Freddie securities – think [privatisation] is the right thing to do because the conservatorships were supposed to be temporary and the companies should be returned to private control and investors should be able to get some kind of return on their investments,” he says.
Reiss adds that some members of the Trump administration think privatisation would generate hundreds of billions of dollars in revenue that could be used to help pay down the national debt, offset tax cuts and seed a sovereign wealth fund.
Joe Tracy, senior fellow with think-tank the American Enterprise Institute and a former official with the Federal Reserve banks of New York and Dallas, agrees with Reiss. “The problem is that they are in conservatorship limbo, so the government has effectively nationalised a large segment of mortgage finance,” he says. “This should be carried out by the private sector.”
* * *
Lawrence White, professor at New York University and co-author of Guaranteed to Fail: Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance, says the GSEs are unlikely to become boring unless they are broken down. He believes that if Fannie and Freddie are privatised in their current form, each enterprise will be likely to pose a systemic risk from a financial stability perspective.
“The implication is that their regulator, the Federal Housing Finance Agency [FHFAI, will need to have strong powers of examination and supervision and will need to impose substantial, risk-adjusted capital requirements,” he says.
“It is unclear whether there will be implications for the Fed as lender of last resort, since the Fed’s lending function is currently limited to banks.”
Reiss agrees that the two lenders are systemically important. If they “had to significantly scale back their lending, it would likely cause a crisis in the financial markets”, he says. “If that crisis were not quickly addressed it would cause a crisis in the real economy as well, freezing up credit for new construction and resales.”
Given that the two GSEs issue more than 70% of the outstanding $9 trillion of mortgage-backed securities in the US and, if privatised, would be two of the country’s largest publicly traded companies, the financial stability risks are clear, he says.
Reiss adds that if the privatisations were poorly planned, and if this were priced in by the markets, it would lead to “higher mortgage rates, with all of the knock-on effects that would have”. This, he says, would “increase the magnitude of a financial crisis if the two companies were to report poor financial results down the line”
Reiss’s interpretation of the Fed’s role is different to that of White, and he believes history may end up repeating itself. He says that although the FHFA is Fannie and Freddie’s primary regulator, the Housing and Economic Recovery Act of 2008 requires the Fed to be consulted about any federal government processes related to the companies.
“The Fed may also co-ordinate with other parts of the federal government in responding to a financial crisis, such as purchasing Fannie and Freddie securities, as they did during the financial crisis of 2007-08,” he says. “One could well imagine the Fed playing a similar role in future crises involving Fannie and Freddie.
May 30, 2025 | Permalink | No Comments
April 17, 2025
Cornell’s Entrepreneurship Center Expands in Its First Year
Cornell Law School just posted this about the new Entrepreneurship Law Clinic on Roosevelt Island:
In the summer of 2024, with a transformative gift from Franci J. Blassberg ’75, J.D. ’77, and Joseph L. Rice III, Cornell formally launched a center for entrepreneurship law in New York City. Bridging Cornell Law and Cornell Tech, the Blassberg-Rice Center for Entrepreneurship Law has continued to grow in the months since, establishing a new Entrepreneurship Law Clinic on Roosevelt Island, welcoming its first cohort of J.D. and LL.M. students, and hiring a second faculty member, David Reiss, clinical professor of law and research director, to lead the New York City program.
“We are thrilled to have David on board,” says Celia Bigoness, director of the Blassberg-Rice Center and clinical professor of law, who continues to lead the Entrepreneurship Law Clinic at the Ithaca campus. “This is the first time we’ve been able to offer a clinical experience that’s entirely embedded in the technology ecosystem of Cornell Tech, and there’s been tremendous demand among students and clients for the work that we’re doing.”
The upstate and downstate clinics operate in parallel, with the two halves meeting together throughout the semester to share lessons and progress. In both locations, students represent entrepreneurs in setting up the business entities for their startups, representing them on a range of matters involving commercial contracts, data privacy, employment, equity allocation, founders’ agreements, governance, intellectual property, and real estate.
Alex Cho ’25 is working with social entrepreneurs, including one that has released an AI-powered chatbot that helps tenants navigate their relationship with their landlords.
“We’re giving students an exposure to the breadth of knowledge that is key to serving entrepreneurs,” says Reiss, who began teaching in January. “Just as important, we’re spending time on the soft skills that will help students not just understand the law, but understand how to effectively counsel their clients. Every student who passes through these programs will come out with hands-on transactional skills that can best be learned in a clinical setting.”
In Ithaca, seven of Bigoness’ twelve current students are continuing from the fall semester, working on increasingly challenging questions for startups in biomedical engineering, food services, product development, technology, and youth sports. In New York City, where the spring semester’s clients are drawn from Cornell Tech, Weill Cornell Medicine, and the Queens Chamber of Commerce, Reiss’ six students are counseling clients in the early stages of creating startups in climate tech, software, and transportation.
“It’s been a great experience, and I think the thing I have gained the most from it is confidence,” says Maria Hatzisavas, LL.M. ’25, who is attending Cornell Tech in the year between earning her J.D. and beginning her first job in corporate law. “At Notre Dame, I developed as a law student, and here, I’m developing more as a lawyer. I’m learning skills I’ll use throughout my career, and I’m gaining new insights into the practice of law because so many attorneys come in to teach us.”
“As someone who wants to do transactional work but hasn’t had an extensive background in accounting or finance, this clinic has shown me the legal side of business,” adds Kylee Nguyen ’25, whose 3L year in the Ithaca clinic has given her a taste of life as a general counsel. “It’s sharpened my soft skills, taught me how to think in the real world, and helped me make a tangible difference in the lives of my clients. I’m taking everything I’ve learned in this clinic into my practice, and I’m not leaving anything behind.”
“This launch is incredibly exciting. I’m grateful to Celia Bigoness, Franci Blassberg, Joe Rice, Jens Ohlin, Eduardo Peñalver, and Shawn Gavin for their vision and to all involved for the hard work it took to bring this about,” says Beth Lyon, clinical professor of law and associate dean for experiential education and clinical program director.
April 17, 2025 | Permalink | No Comments