Kenneth Glad
A New York City tax fight has put luxury homes and billionaire wealth at the center of a new political clash. The dispute widened after a prominent real estate executive objected to the language used to sell the proposal.
New York City Mayor Zohran Mamdani is backing a pied-à-terre tax on expensive second homes, a plan announced with Gov. Kathy Hochul as part of an effort to close the city’s budget gap.
The measure is aimed at secondary properties owned by people whose primary residence is outside New York City. The Guardian reported that it would apply to second homes valued above $5 million.
The proposal places high-end real estate at the center of a broader argument over city revenue. Supporters see the tax as a way to ask owners of costly second homes to contribute more toward public services, especially at a time when officials are looking for new money.
Mamdani promoted the measure outside Citadel CEO Ken Griffin’s $238 million penthouse.
The setting turned Griffin’s property into a symbol of the debate over how much luxury homeowners should pay toward the city.
Roth attacks rhetoric
Steven Roth, CEO of Vornado Realty Trust, criticized Mamdani’s message during an investor call, according to HuffPost.
“I must say that I consider the phrase ‘tax the rich,’ when spit out with anger and contempt by politicians both here and across the country to be just as hateful as some disgusting racial slurs ― and even the phrase ‘from the river to the sea,’” Roth told investors.
HuffPost noted that “from the river to the sea” is used by pro-Palestinian activists and is commonly followed by “Palestine will be free.”
Roth’s comments shifted the argument beyond tax policy and into the language politicians use when discussing wealth. His remarks also underscored the tension between progressive tax proposals and business leaders who say the city risks alienating major investors.
Griffin flashpoint
The backlash has also reached Griffin’s business interests. Forbes reported that Citadel suggested it may review plans for a $6 billion New York City expansion after Mamdani filmed the tax video outside Griffin’s property.
Forbes estimated Roth’s net worth at more than $1.1 billion in 2019. HuffPost also cited a 2021 Wall Street Journal description of Roth as a longtime friend of Donald Trump with past business ties to him.
Roth argued that the city should address its fiscal problems through better management rather than new taxes.
He also defended wealthy New Yorkers as major contributors to the city’s economy, rejecting the idea that they should be treated as political targets.
Case for the tax
Mamdani has framed the tax as a fairness measure aimed at owners of expensive second homes who do not primarily live in New York City.
He has said that it would be a part of a broader push to make “the wealthiest among us pay a little bit more so that everyone can afford to live in this city.”
City Hall has said the surcharge would apply to one- to three-family homes, condominiums and co-ops above the $5 million threshold when the owner’s primary residence is outside New York City.
The tax has been described asa way to raise revenue from a narrow group of luxury property owners while helping fund the city’s budget needs.
Sources: HuffPost; The Guardian; Forbes; The Wall Street Journal
