With a leftist New York City politician appearing likely to be the Democratic mayoral candidate for the U.S.’ largest city, business interests are melting down over the prospects of his tax-the-rich platform aimed at improving basic services.
“The reaction of the business community to the victory of a member of the Democratic Socialists is a combination of surprise and deep concern,” Kathryn Wylde, CEO of the Partnership for New York City, told Fortune via email. Because very few have met him, “their views are defined by his campaign rhetoric and the negative ads cast against him,” she said.
Is New York City at risk of a billionaire exodus? History suggests no.
The reality is, for individuals as well as for businesses, choosing a place to relocate involves many factors, including what the location has to offer, and what it costs.
“What makes New York attractive is we have an excellent labor market in terms of having great human capital; companies want to be here, and their employees like to be in New York City,” Ana Champeny, vice president for research at the Citizens Budget Commission, told Fortune.
Champeny added that high taxes play into the equation, as do other factors. Counting state and local taxes, New York City collects an average of $12,751 per capita, more than California’s $10,346. “We are well above the average, and we are significantly higher than high-tax states,” she said. “There’s always a risk that people are going to choose to relocate and businesses will choose to relocate, but increasing our taxes further would increase that risk.”
Kenny Burgos, CEO of the New York Housing Association, which represents landlords, argued further restrictions on rents would affect landlords’ ability to pay for repairs, making 40% of the city’s properties unaffordable and ultimately causing property owners to “walk away.”
“You will have vacant, deteriorated buildings, abandoned buildings, much like the Bronx had in the ’70s and ’80s,” he told Fortune. “You can’t pick them up and go anywhere else with them, so we are forced to contend with a potential administration who is threatening the very viability of these buildings.”
Partnership for New York City CEO Kathryn Wylde, for her part, is encouraging members to focus on the facts, noting that “much of Mamdani’s agenda cannot be accomplished by a mayor, but are the province of the Governor and state legislature. A mayor cannot, for example, raise corporate or income taxes,” she said. Partnership members plan to meet with the candidate, to which he is “very open,” she added.
Progressive economist Paul Krugman is one of many who thinks the possibility of a crime-fueled doom loop accelerating New York’s deterioration is overstated. Compared to the crime-ridden 1980s, “New York is one of the safest places in America, and probably as safe as it has ever been,” he said on Substack, recalling his own childhood growing up in the city’s suburbs when Times Square was full of sex shops and Columbia University deployed private security to protect faculty homes.
