New York City Property Tax Proposal is a Prime Example of Policy Shortsightedness

Balancing a city budget should start with protecting the people who keep that city running—in New York, that’s workers, renters, and businesses, big and small.

Budgeting requires tradeoffs and tough conversations about revenue and spending priorities, but floating sweeping tax hikes that would hit millions of everyday New Yorkers creates uncertainty in a city already grappling with high costs and stretched household budgets.

The Mayor’s Proposal and Its Risks

Mayor Zohran Mamdani has long argued for raising taxes on high-income New Yorkers and big corporations, a move that would require action from New York Governor Kathy Hochul and the State Legislature. More recently though, he’s warned that without new revenue from those at the top, the city may resort to “a more harmful” 9.5% across the board property tax.

A property tax of this nature is a blunt instrument: its impact will be borne most by homeowners, co-ops, and neighborhood businesses, then passed down to tenants as higher rents and fees. That’s not how we build a fairer city.

Mamdani himself acknowledges that this outcome is “placing the onus for resolving this crisis on the backs of working- and middle-class New Yorkers.” A family determining whether they should renew their lease, or a small business debating expansion will inevitably hear the message that affordability could worsen, and plan accordingly.

Affordability is Already Stretched

New York City is already one of the most expensive places to live in the country. Mayor Mamdani understands this—his campaign rightly identified the affordability crisis as a primary motivator for voters. Median rent clocked in at $3,491 in the second quarter of 2025 — 55% of the typical household income — and new home loans dropped to their lowest level since 2006. For small businesses still recovering from the pandemic, commercial property tax hikes would mean higher rents and operating costs. For homeowners and co-op boards, it would mean higher monthly carrying costs.

The administration is simultaneously preparing a rent freeze to shield tenants from rising housing costs. The combination of capped revenues and rising operating costs can jeopardize building maintenance, safety repairs, energy efficiency upgrades, and union jobs with landlords already struggling to get out of the red. Tenants need protection from rent spikes, but they also need well maintained, livable homes. We should not force a tradeoff between the two.

Shortsighted policy proposals like these have real, destabilizing impacts for neighborhoods. 

When millions of homeowners and more than 100,000 commercial properties hear talk of sweeping tax hikes, they brace for impact.

State Competitiveness and Pro-Growth Alternatives

New York has already seen population losses in recent years, with data showing over one million residents who have moved to other states since 2020. At a time when cities are competing for talent, investment, and innovation, New York should be signaling confidence, long-term stability, and a commitment to affordability, not floating dramatic tax escalations as leverage.

Mayor Mamdani has made several good decisions early in his term, such as his recent executive order aimed at identifying and eliminating redundant and cumbersome license fees and permitting processes for small business owners. We would encourage him to continue to establish new pro-growth policies that will make New York City more attractive to new investment and job creation. In parallel, Governor Hochul has proposed several policies aimed at cutting red tape and making life more affordable for New Yorkers, reinforcing a predictable, growth oriented environment.

A Targeted Path Forward

New York does face very real budget pressures. Lawmakers should have honest debates about revenue and spending, but durable solutions require thoughtful planning, not tactics that risk undermining confidence in the city’s future. A more targeted approach, achieved by pairing regulatory streamlining and cost containment, can protect services while strengthening affordability and competitiveness.