Mamdani's Property Tax Warning Draws Fire From Council, Budget Watchdogs and Landlords

Mayor Zohran Mamdani's warning that he may ask for a property tax increase to close a multibillion-dollar budget gap is meeting resistance from city lawmakers, budget watchdogs and building owners. Many of them argue the choice he has laid out is artificially narrow and could carry costly side effects.

Mamdani's $127 billion preliminary budget marked a sharp change in tone from a campaign that largely celebrated the city. He described a "fiscal crisis" with two ways out: state lawmakers raise taxes on the wealthy and corporations, or he asks the City Council to approve a 9.5% property tax hike.

Andrew Rein, who leads the fiscally moderate Citizens Budget Commission, called it "a false choice," saying it omitted the most important option: cutting spending that does not improve people's lives. Carol Kellermann, the group's former president, offered a more skeptical reading. "It's a way to freak everybody out and make it look like the income tax increase is reasonable compared to this," she said.

Watchdogs see the proposal as political maneuvering meant to keep pressure on Gov. Kathy Hochul and the state Legislature to tax the rich. They also warn it could alienate homeowners of color, whom Mamdani has said are unfairly penalized by a "broken property tax system."

The mayor has been sounding the alarm since last month. He first cited a $12 billion gap, which fell to $7 billion by the time he appeared before Albany lawmakers. On Monday it shrank again, to $5.4 billion, after Hochul increased state funding on top of money she had already committed to expanding child care. Mamdani is legally required to balance the budget.

Queens Borough President Donovan Richards, who endorsed Mamdani, called the potential increase "a nonstarter." He said an across-the-board hike would worsen inequality and affordability problems and risk a return to 2008, when Southeast Queens was "the national epicenter of property foreclosures." Richards urged the city to reform a system in which Black and brown homeowners in middle-class areas pay more than brownstone owners in the wealthiest neighborhoods.

Landlords were also critical. Kenny Burgos, CEO of the New York Apartment Association, said Mamdani had promised to fight for property tax reform on the campaign trail and was now proposing a hike that would push thousands of rent-stabilized buildings "into further bankruptcy." He added that higher costs would likely be passed on to market-rate tenants. "This is basic economics," he said.

Mamdani said his administration will send Albany proposed legislation to fix the property tax system "in the next few weeks." Martha Stark, a former finance commissioner under Bloomberg and now policy director for Tax Equity Now New York, argued the city does not need the state to act. She filed a 2017 lawsuit challenging the system as discriminatory and said the Court of Appeals made clear the city has the authority and legal obligation to assess properties uniformly.

City Council Speaker Julie Menin and Finance Chair Linda Lee said in a joint statement that a property tax hike "should not be on the table whatsoever." They noted the process now moves to the Council, which will hold agency budget hearings and release its own projections beforehand. Councilmember Lincoln Restler of Brooklyn, a likely ally of the administration, said there is no likelihood of property tax reform passing in Albany this year, though he praised the mayor for starting the debate. He said the Council has the authority to raise property taxes but would look at every option to avoid it.

Policy experts say other revenue routes exist. The left-leaning Center for an Urban Future released a report last week outlining five options, including a 25% increase in metered parking spaces, which it estimates would raise $1.3 billion a year without action from Albany. Executive director Jonathan Bowles said not every option can be implemented this year, but with deficits continuing beyond it, dismissing alternatives now would be "silly."