The city that never sleeps wants to put its high prices to rest.
Addressing New York’s affordability problems was a pillar of Zohran Mamdani’s mayoral campaign. Now that he’s in office, those promises are being tested.
Three of his proposals — free buses, universal childcare, and a rent freeze — have been rolled out in other cities. BI’s Juliana Kaplan broke down the previous successes (or failures) of the affordability plans to gauge what New Yorkers can expect.
To fund these efforts, Mamdani is pushing to tax the city’s richest residents (or sometimes residents). That’s not entirely up to him, as those decisions are mostly handled at the state level, but he’s made some progress.
Gov. Kathy Hochul unveiled plans to tax property owners who primarily live outside NYC but have a local home worth over $5 million. (The fancy folks call it a pied-à-terre.) Juliana also looked at how that type of tax has worked in other cities.
The tax is expected to bring in $500 million, which only makes a slight dent in NYC’s budget gap. In the meantime its become a lightning rod for business leaders and Wall Streeters to speculate about a potential NYC exodus.
Mamdani’s affordability push faces another headwind: the city is showing no signs of slowing down.
As much as New Yorkers complain about prices, NYC’s housing stock and services are still in high demand. Even though most NYC renters struggle to afford housing, plenty of people are eager to give it a try.
Carving out room for more affordable housing could solve that issue. But this is a city where every square foot — parking spots can cost more than $1,000 a month — is at a premium.
On the flip side, the New-York-or-nowhere attitude also works in Mamdani’s favor. The city has come back stronger from multiple crises over the years, from September 11th to the global financial crisis and the COVID-19 pandemic. Its draw as a financial and cultural hub proved too strong, despite the pull of cities like Miami or Austin.
Could Mamdani’s plans to tax the rich be the city’s breaking point? A recent spat between the mayor and billionaire Ken Griffin highlighted the potential risk.
Mamdani called out the Citadel CEO in a video posted online last month, prompting Griffin to call it “creepy and weird.” Griffin’s deputy defended his boss and hinted the firm could rethink its plans to redevelop a midtown tower for more than $6 billion.
Griffin has shown a willingness to relocate before, moving Citadel and Citadel Securities’ headquarters from Chicago to Miami. But the benefits of the Big Apple, especially for top investors, have proved tough to top.
That doesn’t mean the ultrarich won’t ultimately pick up and move over taxes. Just ask California.
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