As Mayor Zohran Mamdani flailed about trying to raise tax rates, I kept thinking that the politically easier way to increase revenue is by building housing that brings more urban professionals to the city.
Development produces short-term revenue from transfer taxes, job creation and other economic activity, and long-term revenue from the income taxes and spending of the new households earning hundreds of thousands of dollars.
Vornado’s Steven Roth agrees. He said on his latest earnings call that economic growth funds housing, transit, public safety and other public goods.
Unfortunately, he did not stop there. Instead he declared “tax the rich” to be “just as hateful as some disgusting racial slurs.” Guess what got all the headlines?
Roth clearly needs some media training. When the rich appear tone deaf, it triggers mockery and makes “tax the rich” more popular.
Mamdani, despite his innate media savvy, could also use a refresher course. Singling out Ken Griffin in front of the Vornado-built 220 Central Park South in a smug video cheering the pied-à-terre tax was not necessary to get his message across, even if it did help generate a personal record number of views.
Subsequent comments by Griffin and Roth revealed that they remain spooked by the murder of the United Healthcare CEO in broad daylight on Sixth Avenue. That’s why Roth called Mamdani’s words “irresponsible and dangerous.”
Deranged people sometimes attempt ghastly crimes based on twisted interpretations of world events, so it’s important that public messaging be effective without being reckless. Mamdani’s past videos have met that standard, but he edged over the line this time.
Roth seemed to lose all sense of perspective.
He likened “tax the rich” to the phrase “from the river to the sea.” But no one interprets “tax the rich” as “wipe them off the map.”
As a result, few people heard Roth say, “Our mayor is young, smart and energetic. With a little tweak here and a little tweak there, his leadership could make this great city even greater.”
Mamdani is popular with the young adults who want to come to New York City to build a career and find a life partner. These are the same folks who power the city’s office leasing and residential markets.
Mamdani’s magnetism, if paired with effective governing, will help fill Vornado’s buildings, which in turn will generate taxes for the mayor’s programs.
Everyone wins. Get the message?
What we’re thinking about: Have you received a notice from the Department of Buildings saying you failed to report your building’s emissions? The commissioner says his agency is trying to help buildings comply with Local Law 97 in ways they can afford but without sacrificing its climate goals. Send thoughts to eengquist@therealdeal.com.
A thing we’ve learned: Brian Laline, executive editor of the Staten Island Advance, has a love-hate relationship with his home borough. Here, in his own words, is some of what he hates:
“Jersey City and Hoboken are booming. Our ‘downtown?’ We can’t build a record-breaking Ferris wheel for less than a billion dollars. Field a baseball team that draws more than a couple-a-hundred people. Or an outlet mall with more empty storefronts than stores.”
Elsewhere…
City Council Speaker Julie Menin took some credit for the news that Mamdani will close the city’s $5.4 billion deficit the old-fashioned way (with state money, cutbacks of planned service expansions and probably some budgeting maneuvers):
“We … appreciate that the administration has moved toward an approach championed by the Council that identifies savings and avoids raising property taxes or raiding reserves,” said Menin, who had immediately rejected Mamdani’s misguided bluffs.
It was a rocky path, but after some rookie mistakes, the mayor ultimately got what he needed — $4 billion from the state and a second-home surcharge that checks his “tax the rich” box. Gov. Kathy Hochul, meanwhile, can say she delivered for the city, whose voters she is depending on in the November election. And she can count on Mamdani to campaign for her.
The big question for real estate is how the pied-à-terre tax will be implemented. It’s a lot more complicated than Hochul initially thought.
Closing time
Residential: The most expensive residential sale recorded Tuesday was $8.5 million for a 3,928-square-foot condominium unit at Sixty Collister at 157 Hudson Street in Tribeca. Tristen Marin and Hanah Bomze with Casa Blanca Real Estate had the listing.
Commercial: The most expensive commercial transaction was $17.2 million for a 40,344-square-foot medical facility at 2316 Surf Avenue in Coney Island. The property is home to Surfpoint Recovery.
New to the Market: The highest price for a residential property hitting the market was $22.5 million for a pre-war co-op at 2 East 70th Street in Lenox Hill. Louise Phillips Forbes, Madeleine McGregor and Elisabeth Slaten of Brown Harris Stevens have the listing.
Breaking Ground: The largest new building permit filed was for a proposed 82,960-square-foot, 68-unit project at 29-12 Hoyt Avenue South in Astoria. Minkuk Kim of MK Architect Studio filed the permit on behalf of Mark Stagg of the Stagg Group.
— Matthew Elo