MARK PENN: Socialist Mamdani sold a tax on billionaires. Regulars homeowners could pay the price
It sounded simple and even kind of warmly populist in nature — a small tax on "pied-à-terre" properties in New York City. But the more you dig into it, as with all things from Mayor Zohran Mamdani, the more you see it as part of a far more devious plan that could destabilize the New York City housing market and cost middle-class people their homes and savings. Gotta love whoever pulled this French name into implying the tax would just fall on a few very rich people — no more than 31,000. That was pure deception. Think about it for a moment: Why tax nonresident property owners? Because they don’t vote in the city. By design, the policy targets non-resident property owners who lack a vote in local elections, shifting municipal tax burdens onto individuals who have no direct voice at the ballot box. And then the city uses money extracted from non-voting property owners to plug general budget deficits and fund broader municipal initiatives. Who knows – perhaps the money will even wind up funding residents who are in New York City illegally. Because the Department of Finance’s initial roll sent notices to 960,000 property entries, primary residents are now forced to navigate bureaucratic hurdles to prove their exemption. The statute had a little-noticed provision that co-ops and condos qualify for the tax if the NYC Department of Finance computers identify their assessed value over $1 million. Presto chango — hundreds of thousands of New York homeowners were caught up in the initial mailing. And the surcharge on non-primary residences can reach up to 5% or more of market value annually. So now add $50,000 a year in costs to a million-dollar non-primary condo. What are those owners going to do? Hit the sell, sell, sell button. Imposing steep surcharges on secondary condo owners could chill the broader housing market, reduce demand from out-of-town buyers and ultimately drag down property values across the board. In the end, local homeowners will pay the price through diminished equity. It’s simple economics. And if you do live in NYC as a primary resident, you now have to prove it. Because the city did not properly screen out existing voters or primary taxpayers beforehand, they are making residents file documents such as their federal tax returns just to clear their names. If you live elsewhere in New York State but keep a place in the city, or if you own two apartments in the city, you are also caught in this net. And never mind that out-of-town property holders were already paying taxes here even though they use few if any city services. No use of schools, no clogging of traffic, reduced sanitation. They would have an argument to be taxed less, not more. And perhaps they can go to court arguing that the tax is discriminatory since it applies to a class of people without a rational basis related to municipal service usage. It potentially violates the equal protection and commerce clauses. This is how creeping socialism works: Politicians advertise that they are going after only those greedy out-of-town billionaires, while creating a sprawling administrative property database that exposes personal details of thousands of everyday homeowners and forces residents to surrender tax returns just to defend their homes. And before you know it, what was billed as "tax the rich" hits you and your family.