By OBBM Network Editorial Staff

Derived from an episode of Epic Real Estate.

President James Madison once warned that the biggest danger to private property would come from a majority acting through government, not a monarch. Fast‑forward 239 years, and New York City’s mayor is wielding that very power to freeze rent on a million apartments, a move that has set off a chain of legal and fiscal battles reminiscent of Madison’s own five‑step warning.

Step 1: A Majority Vote and a Free‑bie Promise

In the 1787 Federalist Paper 10, Madison defined a “faction” as a group whose shared interests undermine the rights of others, noting that property ownership is the most enduring of these factions. Today, 68% of New York households rent, and on election night renters made up roughly six in ten voters, delivering Zoran Mamdani a 50.8% victory. Mamdani’s flagship pledge – a guarantee to freeze rent every year he remains in office – was delivered on June 25 when the Rent Guidelines Board voted 7‑1 to freeze rent on about a million rent‑stabilized units, the first time both one‑year and two‑year leases were frozen simultaneously.

While renters celebrated a free benefit, owners saw only their income frozen. Property taxes and insurance costs continued to rise, widening the gap between revenue and expenses. “If you own your home, you’re standing on the outnumbered side of that line,” the host notes, underscoring Madison’s first warning that a majority can win by offering something free that the minority must fund.

Step 2: Judges Appointed to Their Own Cause

Madison argued that no man should be a judge in his own cause. The Rent Guidelines Board, meant to be independent, saw six of its nine members appointed by Mamdani in February. On the morning of the freeze vote, the lone dissenting member, Christina Smith, resigned, saying, “This year’s RGB order was decided last year on the campaign trail.” Seven landlords sued, and a judge ordered the city to produce its communications with the board, asking how the mayor would comply with his rent‑freeze guarantee. The city maintains the board acted independently, but the litigation highlights Madison’s second warning: the danger of a government picking its own referees.

Step 3: The Push Toward an Equal Division of Property

Madison warned of schemes seeking “an equal division of property” – a notion later embraced by Karl Marx. Mamdani, a self‑identified member of the Democratic Socialists of America since 2017, has echoed similar language. In a 2020 post while running for the State Assembly, he wrote, “Each according to their need, each according to their ability,” a reversal of Marx’s famous line. The city’s $22 billion “Block by Block” housing plan calls for transferring ownership of chronically neglected buildings to community land trusts, nonprofits, or even tenants themselves, echoing the expropriation language advocated by the DSA’s Housing Justice Commission.

Critics point to a 2020 clip where Mamdani said a system guaranteeing housing – whether called “abolition of private property” or a “statewide housing guarantee” – would be preferable to the current situation. He has not walked back those remarks, and a former city official, Sia Weaver, once described private homeownership as a “weapon of white supremacy,” later regretting the phrasing but not the underlying sentiment.

Step 4: Building the Machinery to Take Property

The city’s plan includes reviving an old law that allows the government to seize buildings over unpaid taxes, water, or repair charges. In September, three rent‑stabilized buildings in Crown Heights were sold at a sheriff’s sale after nearly a thousand violations were recorded. Buyer Mark Schwartz called it the first step toward preserving rent‑stabilized housing, but Madison would ask whether a majority‑driven government can be trusted to decide whose property is next.

Historically, New York took over distressed properties in the 1970s and 1980s, eventually owning about 200,000 apartments, including 65% of central Harlem. The modern “Third Party Transfer” program, created in 1996, mirrors that approach: unpaid tax liens become city liens, and if left unpaid for a year, the city can foreclose on an entire block, transferring the deed to a nonprofit and then to a developer, often leaving the original owner with nothing beyond what they owed.

Step 5: The Question of Just Compensation

Madison’s 1789 proposal, later incorporated into the Fifth Amendment, demanded that the government provide “just compensation” when taking private property for public use. New York’s history shows the danger when compensation falls short. In the early 1990s, owners like Doris McConnell, who had owned a Brooklyn home since 1977 and paid off the mortgage in 2012, saw the city claim the property over $45,000 in back charges, continuing to accept his payments while the deed had already transferred.

Today, as the city moves forward with its housing plan, owners worry that the promise of free rent for renters will be paid for by taking more private property without fair recompense – a modern echo of Madison’s final warning.

Matt Theriault’s analysis of Mamdani’s policies through Madison’s framework shows how a mayor’s well‑intentioned rent freeze can set off a cascade of actions that reshape property rights in a major American city. Whether New York’s approach will preserve affordable housing without eroding the constitutional guarantee of just compensation remains an open question, one that will likely shape the city’s housing landscape for decades.

The full episode of Epic Real Estate is available on OBBM Network TV.