New York City’s democratic socialist Mayor Zohran Mamdani has issued an ultimatum to Albany: tax the ultra-wealthy or face a "last resort" 9.5% property tax hike to plug a $5.4 billion deficit. While Mamdani claims he’s protecting the working class, real estate insiders say the plan is a math-defying disaster that will drive up rents and accelerate the flight of taxpayers to low-tax states like Florida and Texas. "Even the discussion of a 9.5% hike is enough to influence buyer behavior and cause irritations in the market," Douglas Elliman’s Ben Jacobs told Fox News Digital. "Some buyers have considered Nassau, Westchester, Long Island, and even Florida or Texas as alternatives because they just don't agree with [NYC] politics." "The mention of a 9.5% hike can pause decision-making, especially for those weighing options in the suburbs or out-of-state markets. We’re already seeing clients seriously evaluate alternatives in Nassau, Westchester and beyond, factoring taxes heavily into affordability calculations," Michelle Griffith of Douglas Elliman also told Fox News Digital. "In some negotiations, this ‘Mamdani Effect’ is tangible, slowing deals or prompting buyers to consider properties outside NYC." WALL STREET CASH FUELS HAMPTONS HOUSING BOOM TO RECORD MEDIAN PRICE AMID TIGHT INVENTORY Earlier this week, Mamdani issued a preliminary fiscal year 2027 budget that includes a property tax hike, a prospect he has described as a "last resort." "Today, I’m releasing the City’s preliminary budget. After years of fiscal mismanagement, we’re staring at a $5.4 billion budget gap — and two paths. One: Albany can raise taxes on the ultra-wealthy and the most profitable corporations and address the fiscal imbalance between our city and state. The other, a last resort: balance the budget on the backs of working people using the only tools at the City's disposal," Mamdani said in a Tuesday post on X. "Faced with no other choice, the city would have to exercise the only revenue lever fully within our own control. We would have to raise property taxes. We would also be forced to raid our reserves," Mamdani additionally said during remarks Tuesday. "This would effectively be a tax on working and middle class New Yorkers, who have a median income of $122,000." Both agents warn that taxing high earners could trigger a further exodus of wealth, shrinking the tax base and eventually leaving middle-class families "holding the bag."
