Mamdani’s Sunnyside Yard Plan is a Distraction
New York needs housing reform, not another subsidized megaproject.
Last week, New York City Mayor Zohran Mamdani visited the White House to pitch President Trump on a $21 billion real-estate deal: federal subsidies to construct 12,000 housing units atop Sunnyside Yard. As a prop, the mayor presented the developer-turned-president with a mock Daily News front page emblazoned with the headline “Trump to City: Let’s Build.” In this case, building would involve erecting a vast deck over an active rail yard in between the Queens neighborhoods of Long Island City and Sunnyside.
On one hand, Mamdani’s proposal represents a positive gesture toward increasing housing supply. But Sunnyside Yard is the wrong project at the wrong time—and at the wrong price. It isn’t a serious affordability strategy, but rather a mirage that could distract leaders for years while doing little to solve the city’s structural housing problems.
The idea of building over Sunnyside Yard dates back to former mayor Bill de Blasio, who introduced the idea in his 2015 State of the City address. From the outset, it faced a bevy of legal and technical obstacles. Amtrak owns the yard, requiring federal coordination and approval. The MTA and New Jersey Transit would also need to sign off, as their trains use the yard. Worse, the 180-acre site has few areas for structural columns, meaning that any deck would involve highly complex and costly engineering. Then-councilmember Jimmy Van Bramer, a progressive ally of de Blasio, opposed such high density development in the area. Congresswoman Alexandria Ocasio-Cortez likewise discouraged the idea in 2019.
Even before recent cost escalations, the numbers were staggering. A 2020 report by the New York City Economic Development Corporation estimated a 12,000 affordable-unit buildout would cost $14.4 billion. Now, the price tag has ballooned to $21 billion for the same 12,000 units, along with parks and other amenities.
A straightforward back-of-the-envelope calculation reveals just how heavily Mamdani’s proposal relies on public subsidy. At $1.75 million per unit, and assuming a generous 5 percent capitalization rate, each apartment would need to generate roughly $87,500 in annual net operating income to justify market math. That translates to about $7,300 per month—before accounting for insurance, water and sewer charges, property taxes, and other operating expenses. Gross rents would likely need to approach $10,000 per month to make the numbers pencil out. That’s more than twice Manhattan’s current median rent.
As Manhattan Institute’s Nicole Gelinas observed, absent massive public support, the project’s viability depends on a “massive uptick in the influx of affluent new people coming to the city.” But she notes there’s no indication that will happen anytime soon.
Instead, the trends are running the opposite direction. E.J. McMahon noted in City Journal in January that New York State has shed 201,269 net residents since 2020, the most in the nation. Texas and Florida have seen the largest gains, adding 4.5 million new residents combined.
While it’s certainly true that the city needs to find ways to increase the supply of new housing, the Sunnyside Yard project is particularly poorly suited to a city where private-sector growth has slowed significantly in the past decade. The city boasts nominally record private employment, but most job growth is happening in lower-paid, government-subsidized healthcare jobs. City comptroller Mark Levine recently pointed out that, excluding gains in health care and social assistance, the city lost 38,000 private-sector jobs in 2025. Texas now has more financial-services employees than New York, lured by the state’s far lower housing costs and no personal income tax.
By contrast, when the city began planning what would become Hudson Yards in 2005—another project set over a rail yard on Manhattan’s Far West Side—it was in a far different economic position. Emerging from the post-9/11 downturn into a period of robust expansion, the city’s GDP growth reached 7.5 percent in 2005, outpacing the national average. Even with those tailwinds, Hudson Yards—ambitious and notable in many respects—ultimately proved only a qualified success.
It’s strange that Mamdani would choose this moment to resurrect a dormant megaproject. Over the last decade, the city’s economy has lagged the nation’s, particularly since the Covid-19 pandemic. Mamdani is facing what he’s termed a “historic” budget gap, and he should know $21 billion in federal funds could go farther elsewhere.
For example, during his campaign, Mamdani promised 200,000 new units of union-built public housing at an average cost of $350,000 per unit, a mere 20 percent of the per-unit Sunnyside Yard proposal’s cost. Building public housing at $350,000 per door is another infeasible goal, given the city’s borrowing constraints and construction costs of roughly $500 to $600 per square foot. The New York City Housing Authority also faces numerous maintenance issues. But Mamdani notably didn’t ask the president for federal assistance to address those problems, or to help deliver on his public-housing promises to voters.
If Trump’s efforts to rename Penn Station, Dulles Airport, and other prominent places in his honor are any indication, he may not fork over the money without some sort of nod to his legacy in his native borough. In his State of the Union, the president casually referenced his father Fred, who built over 27,000 units across New York City in the mid-20th century, including many in Queens. Mamdani thus risks entangling his mayoralty in a megaproject that would place its ultimate direction in the hands of the Left’s greatest political nemesis.
The better solution for everyone is far simpler: let the private sector build more housing, at far less public expense, by eliminating zoning, inclusionary housing, environmental review, and labor requirements that make fewer deals financially viable. For example, the current 485-x tax abatement—necessary to develop rental apartment buildings because of the city’s disfavored tax treatment of large rental buildings—requires that projects of 100 or more units pay workers union-level wages. Developers are responding by applying for 99-unit buildings, leaving additional density on the table.
Absent such deregulation, New York’s housing shortage will persist, regardless of how many grand projects its politicians announce.