How do leftists propose to fix leftist misgovernance? Easy. More leftism.
The irony is that this “affordability crisis” - in New York and other blue metropoles - is the result of failed Democratic governance. Rent control and eviction limits have caused landlords to take tens of thousands of apartments off the market. A higher minimum wage raised the cost of food and other basics, while rich union contracts keep transportation inefficient and costly. Climate bans and mandates have raised energy costs.
Mamdani’s proposed minimum-wage increase from $16.50 to $30 an hour by 2030 makes California look conservative. The Golden State has already seen the consequences of a $20 minimum wage for fast-food workers: fewer jobs and higher prices.
Seattle’s much-cited experiment with a $15 minimum wage notably resulted in a meaningful reduction of hours worked for low-wage employees, for example.
The Congressional Budget Office estimated a federal $17 minimum wage by 2029 could eliminate up to 2 million jobs nationally. Now imagine the havoc a $30 wage floor would wreak on NYC‘s local labor market.
What’s more, a growing literature finds that even where firms avoid layoffs, they often adjust in ways that mitigate the net benefits to many low-skilled employees: by reducing non-wage benefits, altering schedules, cutting back on workplace amenities and training, demanding more of their workers, or hiring more experienced employees.
Ultimately, the economic effects of Mamdani’s $30-per-hour wage proposal appear clear: substantial income gains for many workers who remain employed, but significant job losses, reduced work hours, business closures, accelerated automation, and regional employment shifts.
New York City‘s rent-stabilization program already makes it impossible for some landlords to cover their costs. Others find it cheaper to leave apartments empty if needed repairs aren’t worth the investment. Tens of thousands of rent-stabilized units sat vacant in 2023, according to U.S. Census data. More will be empty if landlords can’t pay their mortgages, and tighter supply pushes prices up.
What would be the correct response? Austin‘s leading the way. Rent control isn’t permitted in the state of Texas and even Democratic Mayors have focused on expanding supply through a combination of legal, regulatory and zoning reforms, rather than on mindlessly subsidizing demand.
The results? Since 2022, prices and rents are down sharply in Austin. Not pleasant if you bought a house or broke ground on an apartment building at the peak. But for Austin, it’s a very good thing. Falling home prices are a sign of a functioning, self-equilibrating market. A surge in demand raised prices, which led to more supply and, eventually, cooling prices and rents.
There is nothing self-equilibrating about New York’s housing market. Supply has been stubbornly unresponsive to steadily rising prices and rents. Should Mamdani go on to win the general election, sticking to his adversarial approach to landlords and private developers won’t fix this.
Austin and New York are mirror images of American housing policy. Austin’s approach is typical in Southern and Southwestern and primarily red and purple states, with fewer restrictions on construction and rents. New York is an extreme example of coastal and Midwestern blue-state metros with less land, and more-restrictive building and rent rules.
The city of Austin loosened building restrictions, including allowing up to three houses on a single lot, reducing minimum lot size, reducing parking requirements, exempting small developments from the site-plan process, and making changes to design standards. The state has played a part too, limiting lot-width minimums and restrictions on housing in commercial zones.
By contrast, New York’s housing supply is heavily regulated and totally dependent on complicated pieces of legislation.
Zoning changes in the 1960s made it harder for supply to respond dynamically to rising demand. Idiosyncratic regulations, such as on the use of stationary cranes and liability for accidents, raise construction costs.
Rent control or rent “stabilization,” now covering roughly half the city’s units, discourages tenants from moving and landlords from upgrading the quality of units. Mamdani’s rent freeze would make that worse. After a 2019 state law tightened conditions for rent increases, vacancy rates plummeted. On top of that comes a 2025 ban on the longstanding practice of brokers charging tenants fees. Rents rose overnight and have continued to climb.
New York has generally sought to boost supply via subsidies and tax inducements. Mamdani has proposed publicly subsidizing 200,000 more affordable units. But even if he had the funding, such units typically cost far more than their purely private equivalents, in part because of all the attached conditions, such as using unionized labor
What about free buses? They’re already free to many riders—about 50% evade the fare, according to the MTA. But no-cost public transit tends to attract more crime, homelessness and soliciting. Officials in Portland, Ore., cited upticks in each when they ended fare-free rides downtown in 2010.
So what’s to be expected?
#1 Home prices and property tax revenue will decline in NYC.
#2 Home prices and property tax revenue will increase in the NYC suburbs.
#3 Home prices and property tax revenue will increase in the City of Boston and Philly.
#4 While Finance firms have been leaving NYC for decades, this process will now accelerate.
#5 Free public transit will cause many quality challenges that will surprise the Socialist Mayor.
#6 The rise of Work from Home will allow more firms and their workers to move outside the NYC jurisdiction and to more infrequently visit the high tax city for group meetings.
#7 Public Sector unions will negotiate more aggressively with the Socialist Mayor and this will increase NYC’s deficit challenge.
#8 The City’s bond rating will decline and this will mean that the City will borrow at a higher interest rate.
#9 NYC will become even more of a poverty magnet as poor U.S residents and poor international residents will be more likely to move to NYC.
#10 While a NYC Mayor can only serve for 8 years, the resulting policies will have a persistent impact on reducing the vibrancy of the NYC economy and its quality of life.
#11 The police will face extreme oversight and they will reduce their policing. While Murders will be investigating, other crimes will not be. This anticipated lack of deterrence will further reduce urban quality of life.
#12 Building on #11, the city’s nightlife will decline in quality as people are afraid to venture out at night and use the public space such as the parks.
#13 Real estate owners in NYC will invest less in maintaining the building capital stock. A “Detroit Effect” will emerge.
#14 Gifted public school programs will receive less $. The parents of these kids will be even more likely to suburbanize to move to a Scarsdale.
#15 As productive firms leave NYC, this disruption of idea production and intellectual interaction will reduce overall U.S economic growth.
Mamdani’s proposed minimum-wage increase from $16.50 to $30 an hour by 2030 makes California look conservative. The Golden State has already seen the consequences of a $20 minimum wage for fast-food workers: fewer jobs and higher prices.
Seattle’s much-cited experiment with a $15 minimum wage notably resulted in a meaningful reduction of hours worked for low-wage employees, for example.
The Congressional Budget Office estimated a federal $17 minimum wage by 2029 could eliminate up to 2 million jobs nationally. Now imagine the havoc a $30 wage floor would wreak on NYC‘s local labor market.
What’s more, a growing literature finds that even where firms avoid layoffs, they often adjust in ways that mitigate the net benefits to many low-skilled employees: by reducing non-wage benefits, altering schedules, cutting back on workplace amenities and training, demanding more of their workers, or hiring more experienced employees.
Ultimately, the economic effects of Mamdani’s $30-per-hour wage proposal appear clear: substantial income gains for many workers who remain employed, but significant job losses, reduced work hours, business closures, accelerated automation, and regional employment shifts.
New York City‘s rent-stabilization program already makes it impossible for some landlords to cover their costs. Others find it cheaper to leave apartments empty if needed repairs aren’t worth the investment. Tens of thousands of rent-stabilized units sat vacant in 2023, according to U.S. Census data. More will be empty if landlords can’t pay their mortgages, and tighter supply pushes prices up.
What would be the correct response? Austin‘s leading the way. Rent control isn’t permitted in the state of Texas and even Democratic Mayors have focused on expanding supply through a combination of legal, regulatory and zoning reforms, rather than on mindlessly subsidizing demand.
The results? Since 2022, prices and rents are down sharply in Austin. Not pleasant if you bought a house or broke ground on an apartment building at the peak. But for Austin, it’s a very good thing. Falling home prices are a sign of a functioning, self-equilibrating market. A surge in demand raised prices, which led to more supply and, eventually, cooling prices and rents.
There is nothing self-equilibrating about New York’s housing market. Supply has been stubbornly unresponsive to steadily rising prices and rents. Should Mamdani go on to win the general election, sticking to his adversarial approach to landlords and private developers won’t fix this.
Austin and New York are mirror images of American housing policy. Austin’s approach is typical in Southern and Southwestern and primarily red and purple states, with fewer restrictions on construction and rents. New York is an extreme example of coastal and Midwestern blue-state metros with less land, and more-restrictive building and rent rules.
The city of Austin loosened building restrictions, including allowing up to three houses on a single lot, reducing minimum lot size, reducing parking requirements, exempting small developments from the site-plan process, and making changes to design standards. The state has played a part too, limiting lot-width minimums and restrictions on housing in commercial zones.
By contrast, New York’s housing supply is heavily regulated and totally dependent on complicated pieces of legislation.
Zoning changes in the 1960s made it harder for supply to respond dynamically to rising demand. Idiosyncratic regulations, such as on the use of stationary cranes and liability for accidents, raise construction costs.
Rent control or rent “stabilization,” now covering roughly half the city’s units, discourages tenants from moving and landlords from upgrading the quality of units. Mamdani’s rent freeze would make that worse. After a 2019 state law tightened conditions for rent increases, vacancy rates plummeted. On top of that comes a 2025 ban on the longstanding practice of brokers charging tenants fees. Rents rose overnight and have continued to climb.
New York has generally sought to boost supply via subsidies and tax inducements. Mamdani has proposed publicly subsidizing 200,000 more affordable units. But even if he had the funding, such units typically cost far more than their purely private equivalents, in part because of all the attached conditions, such as using unionized labor
What about free buses? They’re already free to many riders—about 50% evade the fare, according to the MTA. But no-cost public transit tends to attract more crime, homelessness and soliciting. Officials in Portland, Ore., cited upticks in each when they ended fare-free rides downtown in 2010.
So what’s to be expected?
#1 Home prices and property tax revenue will decline in NYC.
#2 Home prices and property tax revenue will increase in the NYC suburbs.
#3 Home prices and property tax revenue will increase in the City of Boston and Philly.
#4 While Finance firms have been leaving NYC for decades, this process will now accelerate.
#5 Free public transit will cause many quality challenges that will surprise the Socialist Mayor.
#6 The rise of Work from Home will allow more firms and their workers to move outside the NYC jurisdiction and to more infrequently visit the high tax city for group meetings.
#7 Public Sector unions will negotiate more aggressively with the Socialist Mayor and this will increase NYC’s deficit challenge.
#8 The City’s bond rating will decline and this will mean that the City will borrow at a higher interest rate.
#9 NYC will become even more of a poverty magnet as poor U.S residents and poor international residents will be more likely to move to NYC.
#10 While a NYC Mayor can only serve for 8 years, the resulting policies will have a persistent impact on reducing the vibrancy of the NYC economy and its quality of life.
#11 The police will face extreme oversight and they will reduce their policing. While Murders will be investigating, other crimes will not be. This anticipated lack of deterrence will further reduce urban quality of life.
#12 Building on #11, the city’s nightlife will decline in quality as people are afraid to venture out at night and use the public space such as the parks.
#13 Real estate owners in NYC will invest less in maintaining the building capital stock. A “Detroit Effect” will emerge.
#14 Gifted public school programs will receive less $. The parents of these kids will be even more likely to suburbanize to move to a Scarsdale.
#15 As productive firms leave NYC, this disruption of idea production and intellectual interaction will reduce overall U.S economic growth.
