Days after Zohran Mamdani won the Democratic nomination in New York City’s mayoral primary election, he joined NBC’s “Meet the Press” to answer questions about his platform.
He told the show’s host, Kristen Welker, that his primary victory over former Gov. Andrew Cuomo came down to his campaign’s simple slogans — “free buses,” “freeze the rents” and raise taxes on the wealthiest New Yorkers.
A less publicized part of the “tax the rich” slogan is updating the city’s property tax system, a notoriously complicated setup that observers of various political leanings find unfair. In campaign proposals, Mamdani said he planned to “shift the tax burden from overtaxed homeowners in the outer boroughs to more expensive homes in richer and Whiter neighborhoods.” (Mamdani later qualified his comment: “It’s not driven by race. It’s more an assessment of what neighborhoods are being overtaxed versus undertaxed.”)
That pledge expanded the “tax the rich” fear to wealthy, upper-middle class and middle-class homeowners who have enjoyed relatively low rates even as the values of their properties have surged.
“Reading the tea leaves, it feels like personal tax is off the table, but corporate and real estate taxes don’t seem to have the same ‘no’ fervor,” Compass’ Jason Haber said.
Mamdani reiterated to The Real Dealhis commitment to an across-the-board overhaul the week before he took office.
“When the city’s wealthiest homeowners pay less in property taxes than working families across the five boroughs, it’s clear our property tax system is broken,” Dora Pekec, his spokesperson wrote. “Mayor-elect Zohran Mamdani will use the full power of the mayor’s office to fix this inequity and ensure that the wealthiest homeowners pay their fair share and working New Yorkers aren’t left carrying the burden.”
The politics of it
For decades, New York City property tax reform has been a chimera. Most agree it’s necessary, yet no one has managed to make it real.
One of the biggest obstacles is that comprehensive reform will require action at both the city and state level. There’s been a lack of political will to be the administration that picks winners and losers.
While the city has purview over how properties are assessed, the main governing law is a state-level statute, which means substantive changes to it would need to be approved by Albany. But in order to make reform a reality, a New York City mayor would likely need to propose and shepherd the updates through the state legislature.
Mayor Bill de Blasio may have gotten closest when he set up an advisory commission to study the issue, but by the time it released recommendations, he was already on his way out. Mayor Eric Adams campaigned on a promise to “immediately” overhaul the system but took no meaningful steps forward.
Now the buck passes to Mamdani, who has a few things on his side that his predecessors did not, indicating that his vow to tackle the issue might not be another empty promise. For one, as TRD pointed out in October, he’s made taxing the rich a central part of his platform, so previous mayors’ concerns about upsetting residents with deep pockets likely won’t weigh as heavily on him.
“It feels like personal tax is off the table, but corporate and real estate taxes don’t seem to have the same ‘no’ fervor.”
He’s also stepping into the role after the state’s highest court gave a relevant, long-running lawsuit new legs. The Court of Appeals in 2024 ruled in favor of Tax Equity Now New York’s petition to revive some of its claims against the city, arguing that the current property tax system is “unfair, inequitable and has a discriminatory disparate impact on certain protected classes of New York City property owners.” The group brought the lawsuit against the city and state in 2017, although the appellate court agreed to drop the group’s claims against the state.
The lawsuit argues that homeowners in outer boroughs and working class neighborhoods are on the hook for higher tax rates compared to those in the city’s wealthiest areas.
Under New York property tax law, condos and co-ops must be assessed in relation to rental buildings, and current city practice is to tie many of those values to rent-stabilized buildings. TENNY’s complaint also calls for the city to begin taxing some co-ops and condos at the same rate as market-rate rental buildings, a power it argues is under the city’s control.
With part of TENNY’s case reopened, the group and the city went back to the state Supreme Court and presented oral arguments in October. They’re awaiting the judge’s decision, which TENNY’s policy director, Martha Stark, said should be handed down by press time.
But Stark also said that the appellate judges’ order already paved the way for the city to make changes to its assessment practices without the Supreme Court’s opinion.
For owners of properties with rent-stabilized units, property tax reform is a welcome prospect. Mamdani’s commitment to freezing rents has so far meant he is open to hearing from these landlords about how to bring down their spending, including on property taxes, so they don’t go broke.
Tax burden
The prospect of an overhaul is a touchy subject for a certain cohort of New Yorkers, especially owners of co-ops and condos in buildings where sales have been pricey, making them ripe for reform.
In court documents, TENNY pointed to several luxury co-ops that had been assessed using rent-stabilized buildings last year, including 998 Fifth Avenue, where Estée Lauder chairman William Lauder sold his apartment for nearly $38 million in September.
Under the current system’s wonky math, the swanky co-op was compared to a rental building at 945 Fifth Avenue, which includes both market-rate and rent-stabilized units, and then given a lower assessment.
But assessing properties in line with market-rate rentals could raise some tax bills to levels unsustainable for many owners, according to Rebecca Poole, membership director for the Council of New York Cooperatives & Condominiums.
“No matter what changes are made, there will obviously be winners and losers, and some of the losers shouldn’t be losers,” Poole said. “Hopefully, [Mamdani will] see the needs of the middle class homeowners.”
One potential tool to make sure “losers” don’t lose too badly would be for Mamdani to push for so-called circuit breakers, stop gaps that cap or slow the rise of an assessed value or tax bill if it goes above a certain level, a mechanism he’s already acknowledged he’s considering.
Co-ops and condo owners also don’t have the same protections as owners of one-to-three-family homes, where a cap bars the city from raising assessed values more than 6 percent each year or more than 20 percent over five years. That cap is especially important for homeowners in neighborhoods where property values have skyrocketed.
But the future of that cap could be in question, given Mamdani’s campaign’s stance on shifting the tax burden to richer, Whiter neighborhoods.
Sooner or later
Given the lawsuit, it’s likely that the city could decide to change how it assesses co-ops and condos as soon as Mamdani takes office, although some say any significant shifts would likely be phased in or out, not immediately instituted. Mamdani, unlike other mayors, has expressed support for TENNY’s lawsuit, signaling he’s more open to going along with its findings than his predecessors. That includes changing assessment ratios, which could lower bills for homeowners in some working class neighborhoods.
But more substantive changes to taxation would happen later. If Mamdani does introduce a plan to, for example, change the cap on assessed values for one-to three- family homes, passage and implementation would most likely be years away.
That may not be much comfort to the city’s 1 million homeowners. If Mamdani were to adopt the issue as one of his priorities, the back and forth over the fate of property taxes could stall sales or give buyers the upper hand in negotiations for homes likely to be affected by any changes.
“If you want to make consumers scared of investing in New York City real estate, the worst thing you can do is play this out over a long time,” appraiser Jonathan Miller said. “Uncertainty does no favors to the housing market.”