“New Yorkers were seething Tuesday after Mayor Zohran Mamdani’s administration alerted them they’d be on the hook for the state’s new pied-à-terre tax — which was explicitly sold as a levy targeting wealthy owners of luxury second homes. Longtime residents — some who have called the Big Apple home for decades and own a single abode in the city — told” the New York “Post they were shocked to get hit with five-figure tax bills they believe were mistakenly mailed out, and are now being forced to navigate a bureaucratic labyrinth to prove it.”
“Whoever’s behind this, who I can only assume is the mayor, didn’t take the 30 seconds to research,” said Karen Young, who has lived in New York for 54 years.
She was surprised when she received a letter from the city Department of Finance demanding $43,000 in pied-à-terre tax on her townhouse, which she’s lived in with her husband for 30 years. “As a faithful New Yorker since 1972, I find it not only insulting but painful,” she said, “Is anybody paying any attention, or any thinking, or two minutes of research. Just look me up!”
Young “went to the DOF’s website to attempt to prove her permanent residency — but quickly hit a brick wall.” “It’s a cumbersome process to prove that I’m a primary resident, which just seems absurd. My jury summons come here, I pay my taxes from here, my utilities,” she observed.
“Despite the department telling her the process to appeal or challenge the bill was as easy as uploading a driver’s license, Young said she was forced to pay her estate lawyer to get the proper documentation after spending three fruitless hours on the website trying to do it herself.”
“Apparently they haven’t checked their own website. And I’m tech-savvy!” she said.
The New York Post says that “once homeowners are notified by mail that the city has determined the tax is applicable to them, they appear to have little recourse to set the record straight if they believe they received the bill erroneously. The tax is meant to apply to one-to-3 family homes worth at least $5 million and co-ops and condominiums valued at $1 million or more — that are unoccupied, non-primary residences, according to the legislation approved by Albany lawmakers and Gov. Kathy Hochul this spring.”
“Owners appealing based on residence status have a strict 30-day window from the notification date to submit their rebuttal directly to the DOF. Those who believe they were incorrectly hit with the tax because the city overestimated the value of their property must file an appeal form with the New York City Tax Commission by March.”
An 81-year-old woman got a letter from the DOF’s Property Division telling “her she’d be subject to a staggering $55,048 pied-à-terre tax on her one home in Manhattan, if she does not go online to prove she lives there full-time.”
“We’ve always owned property in one place or another, but only ever owned one property,” she said.
“Adding insult to injury, the notice was addressed to her late husband of 53 years, with whom she co-owned the property while he was alive.”
“The fact that it’s addressed to my husband, who died six years ago, is outrageous,” she said.
“I have lived here for 30 years; it’s my only residence. It’s addressed to my husband, not me,” she added.
“I own this house, the City of New York didn’t get that right.”
New York Mayor Zohran Mandani supported these huge taxes in order to pay for wasteful spending, such as setting up wasteful government-run grocery stores. Mamdani has proposed a record $126 billion budget for New York City, leaving the city “on the verge of a fiscal crisis.” “Mamdani’s plan would have the city-run grocery stores not pay taxes, not pay rent, and have to use taxpayer dollars to subsidize the stores on an ongoing basis. So the taxpayer loses, and the bodega owners lose, and they should be upset.” Mamdani’s government-run grocery stores would cost far more to set up than most private grocery stores, and have lower-quality produce.
Mamdani is also imposing destructive rent regulations that even liberal economists say will harm the quality and quantity of housing in the city.
In 2023, a bank collapsed after New York’s legislature tightened rent control, making it impossible for some cash-strapped landlords to repay their mortgages. Americans ended up footing the bill when the FDIC had to bail out the bank.
Now, New York City is making things even worse for some landlords, by imposing a rigid rent freeze on a million apartments in New York City, that will make it impossible for some landlords to make ends meet or maintain their buildings. The rent in these apartment buildings is frozen, even as landlords’ costs rise, such as electric bills, which have risen faster than inflation in New York.
Even before New York City’s recent rent freeze, rent-controlled rents were already so far below market rates that some landlords were losing money renting them out, and thousands of apartments already sit empty due to lack of money to fix them. Brandon Fuller notes that 57,000 of the rent-stabilized units subject to this rent freeze already “sit empty. ~10% of these buildings already lose money every month. A freeze doesn’t make housing cheap. It makes it scarce, decrepit, and eventually the taxpayer’s problem. It’s the same” kind of draconian restrictions on rent that earlier “hollowed out Mumbai’s housing stock” by leaving some landlords in the world’s fourth largest city with too little money to maintain their housing units.
Rent control reduces the value of housing stock, shrinking the property tax revenue that funds schools and local governments. “Researchers at the University of Southern California said rent control hurt property values in St. Paul, Minn. by $1.6 billion,” reported Market Watch.
As even the progressive Nobel Prize-winning economist Paul Krugman noted in the New York Times, economists overwhelmingly oppose rent control: “In 1992 a poll of the American Economic Association found 93 percent of its members agreeing that ‘a ceiling on rents reduces the quality and quantity of housing.’ Almost every freshman-level textbook contains a case study on rent control, using its known adverse side effects to illustrate the principles of supply and demand. Sky-high rents on uncontrolled apartments, because desperate renters have nowhere to go — and the absence of new apartment construction, despite those high rents, because landlords fear that controls will be extended.”
