Facing a looming $5.4 billion budget deficit gap this year and next, New York Gov. Kathy Hochul and New York City Mayor Zohran Mamdani, both Democrats, are jointly backing a tax on high-end pieds-à-terres, or second homes, in New York City, which can sit empty much of the year.
The proposal, which was presented without much detail, would tax people who own a second home in New York that is worth more than $5 million. Hochul said her goal is to raise $500 million annually, which would go toward closing the anticipated $5.4 billion budget deficit in 2027.
“If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker,” Hochul stated.
Nicole Gelinas, a senior fellow at the Manhattan Institute and contributing editor to its City Journal who researches urban policy, including public finance, told JNS that New York City is “long overdue” for a “full rethink of its property-tax system.”
New York Gov. Kathy Hochul announces proposed a pied-à-terre tax to support New York City Mayor Zohran Mamdani’s efforts to close New York City’s budget gap, April 15, 2026. Credit: Susan Watts/Office of Gov. Kathy Hochul.
“Gently discouraging keeping a house or apartment unoccupied might make sense in the context of full property-tax reform,” according to Gelinas, a contributing opinion writer at the New York Times.
“The mayor and governor have not proposed full property tax reform, instead isolating one gimmicky, tax-the-rich idea essentially as a marketing ploy as the state budget remains stalled,” she told JNS.
“It sounds good to most people who don’t have second homes” but isn’t a “rational tax strategy,” she said. “It’s also concerning that they are making a desperate cash grab when state and city revenues, including property tax dollars, are still naturally rising with the economy.”
Hochul said at a press conference that “what I’m saying is simple and similar to what other international cities like Paris and Toronto have already adopted, because it’s a matter of fairness to all those millions of residents who actually live here.”
“Those who benefit from the city without living in a full-time capacity should contribute to the costs that it takes to run the city: public safety, world class parks, amenities, the roads, the subway system,” she said. “This proposal simply ensures that they’re contributing in a meaningful way to keeping New York City the greatest city in the world, and it goes also to help the city’s budget gap.”
Mamdani spoke on Wednesday at a Tax Day forum with leading economists Joseph Stiglitz and Gabriel Zucman.
New York City Mayor Zohran Mamdani holds a Tax Day forum with economists Gabriel Zucman and Joseph Stiglitz at the CUNY Graduate Center in Manhattan, April 15, 2026. Credit: Michael Appleton/Mayoral Photography Office.
“This is a tax on properties worth more than $5 million that are owned by people who do not reside in New York City,” the mayor, a Democratic Socialist, said at the forum.
Mamdani said that the “super wealthy” buy properties and use them to “store their wealth” but don’t “pay back into that same city that generates so much of that wealth in the way that they should.”
“What we are talking about is a recognition of the inequality that has permeated politics through the five boroughs of our city, through our country, through the world,” he said. Mamdani called a projected exodus of high earners from the city, if taxes get too high, “imagined,” saying that “we have to reckon with the very real exodus that we are seeing in this city: an exodus of working-class people.”
The mayor has also proposed raising property taxes by more than 9% in the next fiscal year. That and the proposed new tax on secondary homes have met strong opposition.
Multiple real estate brokers, who cater to an ultra-wealthy clientele, declined to comment on the impact such a tax would have on the Big Apple real estate industry.
Bess Freedman, CEO of the real estate brokerage Brown Harris Stevens, wrote to her staff that “while this proposal is being framed as a tax on the ultra-wealthy, the reality is that its impact would extend far beyond a narrow segment of the market” to “every corner of our industry.”
Freedman reportedly added in the memo that “targeting the top of the market creates a ripple effect” and “when luxury values decline, it compresses pricing throughout the entire market, impacting homeowners at all levels.” (Freeman’s firm said earlier this month that more buyers spent $10 million or more to buy a new development residence in Manhattan in the first quarter of 2026 than in any other quarter of the past 10 years.)
New York City Mayor Zohran Mamdani holds a Tax Day forum with economists Gabriel Zucman and Joseph Stiglitz at the CUNY Graduate Center in Manhattan, April 15, 2026. Credit: Michael Appleton/Mayoral Photography Office.
At the event with Mamdani and the economists, Stiglitz, a former chief economist at the World Bank who holds a Nobel Prize in Economics, said that in the past 25 years, “41% of all the increase in wealth has gone to the top 1%.”
“The bottom 50% of the world has gotten just 1% of that increase in wealth. So inequality has been growing,” he said. The United States has “more inequality than any other advanced country,” he said.
Stiglitz, a Jewish university professor at Columbia University, pointed to Mamdani during his remarks and told the mayor that in his travels all over the world, “one of the striking things, as we’ve traveled, is everywhere, you are known.”
“You are as famous as Donald Trump, and the point I want to make is that the election in New York got so much attention everywhere because it was symbolic,” the economist said. “It showed that there was another side of the United States, that there were, you know, a city, which is the largest Jewish city, could elect somebody of very different persuasion, a religious belief.”
“It was a real testimony to the good side of humanity, and we need affirmation that there exists a good side to humanity right now,” he said. “One can’t underestimate the influence that New York has on the entire world as a symbol of what is possible.” JNS
{Matzav.com}
