Zohran Mamdani is set to begin a new mayoral term after a historic election that gave him the highest vote count for a New York City mayor in 60 years. After winning with a campaign focused on working-class issues, he now faces the challenge of delivering on his promises as living costs remain at record highs, economic growth shows signs of slowing, federal support weakens and budget pressures mount.Housing remains the most severe strain on household finances. More than half of a typical family’s income goes towards rent, while about 100,000 people rely on homeless shelters each night, according to CNN. In Manhattan, median monthly rents have crossed $5,400. “This is what a full-blown affordability crisis looks like,” Manhattan Borough President Mark Levine said in a December report.Central to Mamdani’s agenda is a pledge to freeze rents in rent-stabilised apartments, a policy he has described as his “landmark policy”. Nearly one million apartments, close to half of the city’s rental housing, would be affected. However, nonprofit housing providers and developers operating subsidised units say that existing revenues are already insufficient to meet operating costs.Simultaneously, the rising cost of daily necessities has pushed many residents into financial distress. Around 1.4 million people, roughly 15% of the city’s population, face food insecurity. Child care costs are also among the highest in the country, with a family required to earn $334,000 annually to afford care for a two-year-old, according to US Census Bureau data.Data from Community Preservation Corporation shows that since 2020, expenses for rent-stabilised housing have increased by 22%, while rents have risen by only about 11%. Industry experts warn that the gap between costs and income could lead to worsening building conditions as expenses for insurance, labour and utilities continue to rise.Alongside rent control, Mamdani has proposed the construction of 200,000 permanently subsidised affordable homes aimed at low- and moderate-income residents. Yet financial stress within the affordable housing sector is already evident. “The trends of increasing costs and reduced income are unsustainable for affordable housing,” Enterprise Community Partners and National Equity Fund said in a recent report, calling for emergency funding and state intervention to curb insurance expenses.Beyond housing, Mamdani has committed to free child care for children aged six weeks to five years and removing fares from city-run buses. Funding these initiatives depends on state approval to increase taxes on high-income residents and corporations. New York governor Kathy Hochul has publicly opposed making the entire bus network free, citing the potential $1 billion loss in fare revenue for the Metropolitan Transportation Authority.Whether Mamdani can turn this proposal into policy will depend on political pressure from his support base, according to Columbia University historian Kim Phillips-Fein. His grassroots campaign has already inspired allies to launch a nonprofit organisation aimed at pressing city and state lawmakers in Albany. “People thought Mamdani’s election was impossible a year ago, but it was accomplished through significant political organizing,” Phillips-Fein said. His success as mayor “will depend upon an alignment of political forces and continued organizing.” Economic indicators present both strength and concern. While opponents warned before the election of a potential flight of wealthy residents or a repeat of the city’s 1970s fiscal collapse, Phillips-Fein told CNN that such comparisons are “shallow”. Unlike that period, New York is not experiencing population loss or a decline in manufacturing jobs.Employment and labour force participation remain at record levels, tax revenues are at historic highs and office leasing reached 97% of pre-pandemic levels in the first half of 2025. However, momentum is slowing. The city is projected to add 78,000 fewer jobs in 2025 than the previous year, with most gains concentrated in the low-wage home health sector, according to Sarah Parker of the New York City Independent Budget Office.At the same time, a $6.5 billion budget shortfall is expected in 2027, with larger gaps forecast in subsequent years. The incoming administration is “facing a pretty challenging fiscal picture,” Parker said.Federal policy is likely to shape the city’s outlook. Mamdani has vowed to pursue “the most ambitious agenda to tackle the cost-of-living crisis this city has seen since the days of Fiorello La Guardia”, but unlike La Guardia’s era, current federal leadership has moved to cut key social programmes, CNN reported.State estimates suggest that Republicans’ One Big Beautiful Bill will lead to 1.5 million New Yorkers losing health insurance coverage, 300,000 households losing some or all SNAP benefits, $13 billion in cuts to the state’s healthcare system and 200,000 job losses, alongside higher long-term energy costs due to the cancellation of clean energy projects.Although Mamdani and US President Donald Trump held a meeting at the White House in November, the administration is withholding $18 billion in federal funding for New York City transit projects. Tariffs, immigration restrictions and reduced federal spending create a “challenging climate for cities like New York,” City Comptroller Brad Lander said in a December report, as cited by CNN. Meamwhile, Mamdani has maintained confidence that progress is possible. “I’m really looking forward to delivering for New Yorkers in partnership with the president on the affordability agenda.”
