What Mamdani’s budget could mean for homeowners and renters

Mamdani floats property tax hike to close budget deficit

FOX 5 NY's Robert Moses has the details.

NEW YORK - New York City Mayor Zohran Mamdani on Tuesday proposed a 9.5% property tax increase as part of his preliminary $127 billion budget plan.

Mamdani frames the move as a fallback if state lawmakers refuse to raise income taxes on millionaires and corporations.

What we know:

The plan is part of an effort to close a projected $5.4 billion budget deficit over the next two fiscal years. 

The budget must be finalized by June 5 and would take effect July 1.

Two options to close the gap

Mamdani outlined two paths to close the gap. 

His preferred option would raise income taxes on the wealthiest New Yorkers, but that would require approval from state lawmakers in Albany. Gov. Kathy Hochul, who is running for reelection, has said she does not plan to raise income taxes.

"If we cannot follow this first path, we will be forced onto a much more damaging path of last resort," Mamdani said, referring to a potential property tax increase and the use of city reserves. "The second path is painful. We will continue to work with Albany to avoid it."

9.5% property tax

The backstory:

Under the proposal, the 9.5% property tax increase would affect more than 3 million homes, condos and co-ops, as well as more than 100,000 commercial buildings. The Citizens Budget Commission estimates that a typical homeowner would pay about $700 more per year.

The property tax option drew swift pushback from the City Council, which must approve any increase. 

How does City Council feel about the plan?

The other side:

Council Speaker Julie Menin said in a statement that "significant property tax increases should not be on the table whatsoever" and called for the administration to pursue additional savings and revenue options first.

Mamdani said his team has identified $1.7 billion in potential savings to help narrow the deficit but did not provide details.

Hochul on Wednesday emphasized that the mayor’s proposal is preliminary and subject to negotiations with the City Council.

"That’s their prerogative to look at that as an option," Hochul said of the property tax proposal. "He’s required to put options on the table, and that does not mean that that’s the final resolution."

Property owners warned that a tax increase would likely be passed on to tenants.

"All the costs that the landlords have to absorb have to be passed down to the tenants," said Real Estate CEO Jay Batra. "It’s a chain reaction."

NYC budget deficit

The backstory:

The city’s projected budget gap has narrowed in recent months. Officials previously estimated the deficit could reach $12 billion late last year before revising it to about $7 billion .

It now stands at $5.4 billion, in part due to additional state funding.

The debate sets up a high-stakes standoff between City Hall and Albany over who should shoulder the burden of closing the shortfall, and whether the threat of higher property taxes will pressure state lawmakers to revisit income tax increases on the wealthy.