Mamdani Housing Buildout in the Bronx Faces Lawsuits Over Zoning Rules

Developers filed suit alleging the city exceeded its authority in mandating affordability levels in Mott Haven; tenant advocates say the challenges are delaying badly needed housing

A coalition of real estate developers has filed lawsuits challenging the Mamdani administration’s authority to mandate affordability requirements exceeding federal and state minimums in the Mott Haven rezoning, threatening to delay or derail plans for thousands of housing units in one of New York City’s most underserved neighborhoods.

The legal challenge centers on whether New York City can impose affordability requirements more stringent than those established in state and federal housing programs. The Mott Haven rezoning, approved by the City Council as part of Mamdani’s broader housing agenda, requires that 30 percent of units in new developments be permanently affordable to households earning 60 percent of area median income or below.

Developers argue that this mandate makes projects financially infeasible, particularly given land costs, construction expenses, and financing requirements. They claim the city lacks legal authority to impose affordability requirements that effectively prevent development, arguing this constitutes an unconstitutional “taking” without just compensation under the Fifth Amendment.

“We support affordable housing, but the economics have to work,” said Michael Romano, representing the Real Estate Development Coalition. “Requiring 30 percent affordability at 60 percent AMI in a high-cost construction market means projects lose money. If the city wants to mandate affordability at levels that don’t pencil out financially, they need to provide subsidies or adjust requirements to economically viable levels.”

The lawsuit cites Supreme Court precedents on regulatory takings, arguing that land use regulations that deny property owners economically viable use of their property cross constitutional lines. Legal scholars note that takings jurisprudence involves complex balancing tests examining the regulation’s economic impact, its interference with reasonable investment-backed expectations, and the character of the governmental action.

However, housing advocates and city attorneys argue that municipalities have broad authority to establish zoning requirements, including affordability mandates, as part of legitimate land use regulation. They note that developers have no inherent right to maximum profitable use of property and that reasonable affordability requirements serve compelling public interests in diverse, economically integrated neighborhoods.

“Zoning has always allowed cities to impose requirements that limit profitability in service of public goals,” explained Matthew Chachere, attorney at Legal Aid Society. “Height limits, setback requirements, parking mandates–all of these reduce developer profits but are clearly constitutional. Affordability requirements are no different. If developers can’t make projects work at required affordability levels, they don’t have to build. But they can’t demand the city grant them more profitable zoning.”

NYU Furman Center research on inclusionary zoning shows that well-designed programs can generate significant affordable housing while maintaining development feasibility. However, success depends on careful calibration of affordability percentages, income targets, and density bonuses or other incentives that offset affordability costs.

The Mott Haven requirements have generated controversy precisely because they mandate affordability without providing corresponding incentives like additional height or density that would help projects pencil out financially. Critics argue this guarantees either no development or litigation, neither of which serves neighborhood needs for housing.

“If you’re going to require 30 percent affordability, you need to make it economically viable through additional development rights, direct subsidies, or tax abatements,” explained Dr. Been Vicki, professor of urban policy at NYU Wagner School. “Just mandating affordability without tools to make it feasible is setting everyone up for failure–developers lose money and needed housing doesn’t get built.”

Tenant advocates counter that the Bronx has seen decades of underinvestment and displacement, and that without strong affordability requirements, new development will simply accelerate gentrification and displacement of existing residents. They argue that development that doesn’t serve current community needs shouldn’t be entitled to proceed simply because it would be more profitable.

“Mott Haven residents have been clear they want development that includes them, not development that displaces them,” said Maria Gonzalez, coordinator of South Bronx Unite. “Market-rate development has brought displacement and soaring rents across gentrifying neighborhoods. Strong affordability requirements are essential to ensure development benefits existing residents rather than replacing them with wealthier newcomers.”

The lawsuit delays have practical impacts on housing production. Several developers have paused projects pending legal resolution, unwilling to invest in planning and pre-construction activities while fundamental project economics remain uncertain. This delay occurs as the Bronx faces severe housing shortages and some of the city’s highest rates of overcrowding and cost burden.

Census Bureau data shows that the Bronx has the highest rates of housing cost burden among New York City boroughs, with more than half of renter households paying over 30 percent of income for rent. Severe overcrowding–more than 1.5 people per room–affects thousands of families, particularly in immigrant communities.

Some Council members have proposed compromise approaches that would reduce affordability percentages slightly while adding density bonuses or tax incentives that improve project feasibility. Preliminary analysis suggests that 25 percent affordability paired with a 20 percent density bonus might achieve both goals of substantial affordable housing and economically viable development.

However, progressive housing advocates resist compromises, arguing that developers always claim projects are infeasible to extract concessions, and that the city should hold firm on strong requirements rather than negotiating away affordability. They point to National Low Income Housing Coalition research showing that virtually no market produces affordable housing for low-income households without mandates or deep subsidies.

“If we cave to developer demands whenever they claim projects aren’t viable, we’ll never get meaningful affordability,” said Council Member Alexa Avilés. “Developers have been claiming projects are infeasible for decades while making billions. We need to call their bluff and insist on affordability that actually serves community needs.”

The legal challenge may ultimately turn on technical questions about the specific authority granted to New York City under state enabling legislation. The city’s zoning authority derives from state law, which establishes parameters for municipal land use regulation. If courts determine the affordability mandates exceed delegated authority, the city would need state legislative action to proceed.

As litigation proceeds, Mott Haven residents face continued housing shortages while developers and city officials dispute project parameters. The outcome will significantly influence not only Bronx development but also the administration’s ability to impose strong affordability requirements in rezonings citywide. A developer victory could force the city to moderate requirements or provide additional incentives; a city victory would validate aggressive affordability mandates as a central housing policy tool.