Mamdani Drops Property Tax Hike, NY Listing Bills Advance

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Hey there, let’s get into today’s news at the intersection of policy and real estate:

Mamdani’s executive budget formally backs away from a property tax hike, boosts capital funding to build housing and curbs CityFHEPS spending.
Bills targeting real estate listings advance in the Senate.
State lawmakers push for J-51 renewal and expansion.

In this edition we mention: Director of the Mayor’s Office of Management and Budget Sherif Soliman, State Sen. Nathalia Fernandez, Assembly member Michaelle Solages, State Sen. Brian Kavanagh and others.

We Heard

Budget takeaways: Mayor Zohran Mamdani on Tuesday unveiled a $124.5 billion executive budget, and while the fine print is still coming into focus, there are some immediate real estate takeaways. As expected, Mamdani abandoned his initial threat to raise property taxes 9.5 percent to bridge the budget deficit. The City Council, which negotiates and approves the final city budget, had flatly rejected the property tax proposal. Instead, Gov. Kathy Hochul on Tuesday announced a $4 billion package in additional state revenue and funds to help the mayor close the city’s budget gap (a $5.6 billion shortfall for this fiscal year and an estimated $7 billion gap for next year). The new support breaks down into roughly $352 million in direct assistance, $3.2 billion tied to programs requiring state approval and another $500 million in anticipated new revenue. That last piece would come from the governor’s proposed pied-à-terre tax on luxury second homes in New York City — but there still isn’t a clear structure for how that levy would actually work. When pressed on how the Mamdani administration can bank on $500 million in annual revenue from a tax that is not fully designed, Director of the Mayor’s Office of Management and Budget Sherif Soliman said only that the state has committed to delivering that “revenue target” to the city through the forthcoming tax framework. “These are still active discussions that we're having with our partners in the state,” said Soliman. Mamdani added that revenue raised from a pied-à-terre tax would go directly toward shrinking the budget gap. The lack of details didn't stop Mamdani from framing the measure as a win on his agenda to tax the wealthy. “I don't know how else to describe a tax on secondary homes of non-resident New Yorkers worth more than $5 million than as a tax on the rich,” Mamdani said. Housing emerged as one of the few areas where Mamdani is looking to significantly ramp up capital spending. The city’s $117.1 billion five-year capital plan includes an additional $4 billion for the Department of Housing Preservation and Development, plus another $500 million in fiscal year 2031 aimed at apartment construction. Budget officials also steered an additional $500 million to the New York City Housing Authority in fiscal year 2028 to help overhaul the city’s aging public housing. On the savings side, the administration is projecting roughly $519 million in cuts within the CityFHEPS voucher program, largely through administrative changes that remain loosely defined. Soliman insisted the city is not planning to reduce vouchers themselves, but instead tighten “management protocols,” such as assessing rents and reducing covered broker fees.
Listing reforms advance: Nassau County Assembly member Michaelle Solages’ push to crack down on private listings is close to becoming a reality with Bronx and Westchester County State Sen. Nathalia Fernandez introducing a companion bill in the Senate — a key milestone for the proposal’s advancement in Albany. The legislation would require agents to place listings on a broadly accessible public website within one calendar day of signing a listing agreement, unless sellers explicitly opt out. Sellers seeking to keep a property off the public market would need to sign either a privacy or safety exemption, or a disclosure acknowledging that private marketing could limit buyer exposure and reduce offers. Notably, the legislation stops short of dictating how listings are marketed once they hit a public-facing website — a carveout that leaves intact the growing wave of brokerage-platform partnerships designed to market homes outside the Multiple Listing Service. Compass and Redfin launched the first such arrangement in February, followed by Zillow and several other brokerages. Spokespeople for Compass and Zillow told The Real Deal they support the bill’s broader push for consumer transparency. Separately, a bill from Rachel May — who represents parts of Syracuse — is headed to the Senate floor after clearing the judiciary committee, putting it up for debate and a full-chamber vote. The legislation would cap residential listing agreements at two years, an effort May says is aimed at shielding sellers from murky renewals and automatic extensions buried in contracts. “Time-limited agreements promote a healthier market dynamic: brokers are motivated to perform, and home- owners retain the ability to reassess and make changes if needed,” said May. The Assembly version of the bill, sponsored by Manhattan Assembly member Grace Lee, remains in the chamber’s judiciary committee.
J-51 push: City property owners and state lawmakers gathered in Albany on Tuesday to urge the renewal and expansion of J-51, the long-standing property tax abatement program that has emerged as one of several unresolved issues in final state budget negotiations (despite Gov. Kathy Hochul’s assertion that an agreement is essentially in place). The program is set to expire next month if no action is taken. Hochul’s proposed budget includes an amended version of J-51, but State Sen. Brian Kavanagh, who chairs the Senate housing committee, and Assembly member Ed Braunstein have put forward their own proposal for a broader overhaul. On Tuesday, they renewed their push to have the bill included in the final budget package. “Multi-family housing is the backbone of our city’s affordability, and many owners need real support to make repairs and upgrades,” Kavanagh has said of the program. J-51, which offers property tax abatements for renovations in eligible multifamily buildings, condos and co-ops, would be revived for 10 years under both proposals — a notable extension from the program’s typical four-year cycles. Both plans also boost the benefit cap, allowing abatements of up to 100 percent of what the city deems “reasonable” rehab costs, up from the current 70 percent ceiling. But key differences remain. Kavanagh and Braunstein’s version would significantly broaden eligibility, extending the break to buildings with at least 90 percent rent-regulated units — a move aimed at critics who say the current rules leave out aging housing stock most in need of investment. The bill would also expand condo and co-op eligibility. Current rules cap eligibility at buildings with an average assessed unit value of $45,000. Hochul’s proposal raises that threshold to $60,000, while Kavanagh’s bill pushes it to $75,000 and ties future increases to inflation.

Have a tip or feedback? Reach me at caroline.spivack@therealdeal.com.

Bill Tracker

Bill Number	Lead Sponsor(s)	Summary	Committee	Last Action Date / Status
S1027	State Sen. Nathalia Fernandez	Would limit and regulate private listings statewide	Referred to judiciary committee	May 11
S7499	State Sen. Rachel May	Would cap residential listing agreements at two years	Voted out of judiciary committee, advanced to Senate floor calendar	May 12
S8170A	State Sen. Brain Kavanagh	Would renew and expand J-51 program	Reported to finance committee	March 18

The Catch-Up

The Real Deal columnist Erik Engquist explores whether New York’s good cause eviction law is reducing apartment turnover and contributing to higher market-rate rents.

State lawmakers still don’t have specific language from the governor about the pied-à-terre tax on luxury second homes in New York City, despite Hochul proposing it nearly a month ago, City & State reports.

The neighborhood surrounding Manhattan’s Penn Station is notorious for its grime, panhandling and claustrophobic train station. But the area is improbably emerging as one of the hottest office markets in the city, reports the Wall Street Journal.

The Kicker

“While I know we’re not quite there yet on the final budget — which is a problem — I do believe that we will be entering the beginning of the end over the next few days with the hope of reaching an end sometime next week,” State Senate Majority Leader Andrea Stewart-Cousins told reporters Tuesday on the more than month late state budget.