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New Yorkers could be facing a “one-two wealth destruction punch” if Mayor Zohran Mamdani’s rent freeze and tax hikes take effect, economists warn.
Mamdani’s housing plan, a campaign promise aimed at addressing affordability, includes an immediate freeze on roughly 2 million rent-stabilized apartments. Separately, his broader $127 billion budget agenda calls for higher taxes on wealthy residents and corporations, as well as a potential 9.5% property tax increase if state lawmakers decline to act.
In the nation’s largest city and a global financial center, the outcome of Mamdani’s proposals could shape not only the future of New York’s housing market, but also broader debates over regulation, taxation and urban policy.
New York City Mayor Zohran Mamdani placed affordability at the center of his campaign to lead the nation’s largest city. (Angelina Katsanis/AFP/Getty Images)
Edward Pinto, senior fellow and co-director of the AEI Housing Center at the American Enterprise Institute, said capping rent increases while raising property taxes would pressure landlords from both directions, reducing revenue while increasing expenses.
“This would be a one-two wealth destruction punch,” Pinto told Fox News Digital. “The rent freeze would drive multifamily property values down and the increase in property taxes would drive both multifamily and single-family values down,” he said.
That, he warned, could ripple across the housing market, affecting not only landlords but also homeowners whose property values are tied to broader market conditions. He also said the policies could discourage new housing construction and lead landlords to defer repairs and improvements.
“At the same time, the construction of new supply would contract and property upkeep would diminish as repairs are deferred and improvements are not made,” Pinto said.
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Economists warn that Mamdani’s housing proposal will exacerbate affordability issues in the nation’s largest city. (Spencer Platt/Getty Images)
Expanding on that argument, E.J. Antoni, chief economist at the Heritage Foundation, said the risks extend beyond property values and could ultimately reduce the city’s housing supply.
“Economists — whether they are on the right or on the left — essentially are in universal agreement, that when the government implements price controls in the rental market, you end up with housing shortages,” Antoni told Fox News Digital.
“And not only do you end up with fewer housing units available, but the quality of those units consistently goes down as well,” he added.
Emily Hamilton, the director of the Urbanity Project at George Mason University’s Mercatus Center, echoed similar concerns with Mamdani’s housing policy platform.
“It’s going to exacerbate the city’s housing quality problems that the current rent stabilization law is already exacerbating. A rent freeze would just make that worse, and ultimately will contribute to the reduction in the supply of rent-stabilized units,” she said.
Mamdani, who made lowering costs for New Yorkers a cornerstone of his campaign, has also proposed building 200,000 affordable rental units. Hamilton said that portion of the proposal could be more promising.
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With billions of dollars and millions of renters at stake, the outcome of Mamdani’s plan could shape New York City’s property landscape for years to come. (Spencer Platt/Getty Images)
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She explained that the passage of the 1961 Zoning Resolution made it difficult to add real estate in New York City, which contributed to an affordability problem and a push to regulate rents.
“It’s regulation on top of regulation, rather than addressing the root cause of housing undersupply and just making it easier to build housing of all types at all price points,” Hamilton said.
Mamdani’s office did not reach out to Fox News Digital’s request for comment.
With billions of dollars and millions of renters at stake, the outcome of the debate could shape the city’s property landscape for years to come.
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