It’s usually advised to avoid discussing politics in polite company.
But we’ll break that rule today…
New York City has a new mayor-elect. It’s none other than Mr. Zohran Mamdani, its first openly socialist mayor.
Supporters will tell you he’s actually a democratic socialist, which is just a distinction without a difference.
This is an organization, after all, whose 2021 policy platform included this gem: “We fight for the abolition of capitalism and the creation of a democratically run economy that provides for people’s needs.”
They go on to demand “Social ownership and democratic control of utilities and key industries including railroads, water, gas, electric, telecommunications, media, and internet service providers.”
If it walks like a duck…
This will be disastrous for the Big Apple’s residents, businesses, and backers alike.
Mamdani’s official campaign site states that his “campaign is for every person who believes in the dignity of their neighbors and that the government’s job is to actually make our lives better.”
In reality, they’ll make New York City’s existing problems worse.
For starters, Mamdani wants to:
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“… immediately freeze the rent for all stabilized tenants…”
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“… triple the City’s production of permanently affordable, union-built, rent-stabilized homes…”
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“… overhaul the Mayor’s Office to Protect Tenants and coordinate code enforcement under one roof, making sure agencies work together to hold owners responsible for the conditions of their buildings…”
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“… create a network of city-owned grocery stores focused on keeping prices low, not making a profit.”
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“… permanently eliminate the fare on every city bus – and make them faster by rapidly building priority lanes, expanding bus queue jump signals, and dedicated loading zones…”
That’s on top of “no-cost childcare” and “green schools” through “unprecedented investment[s],” offering free baby kits for newborns, funding more libraries and healthcare initiatives…”
The list goes on…
If that all sounds expensive, you’re not wrong.
Estimates are that the policies would cost somewhere in the ballpark of $10 billion per year.
If any city could pull that off, it might be New York. The city counted a budget of $117 billion in its most recent fiscal year. NYC, after all, is the financial capital of the world. The financial industry can be very profitable, so can taxing it.
But there could be a problem…
Other People’s Money
It’s an indisputable fact that a bigger government needs bigger financial pools to draw from. For a city, that means taxes. And, yes, Mr. Mamdani intends to raise them.
But raise them too much, and New York could very well run low on its most important resource… New Yorkers.
Earlier this week, ABC7 News reported poll findings that “close to 9% of people will flee” the city “if Mamdani becomes mayor.” That’s 765,000 residents, for the record.
And those are just the ones in the “definitely leaving” category. Other polls indicate that 2.12 million residents are considering it.
Either way, that equates to a whole lot of lost tax revenue – especially if there are wealthy members among them. Which there are and will be.
Take John Catsimatidis, CEO of Gristedes, a grocery chain with 31 locations throughout the Big Apple. Back in June, after the mayoral primaries, he told Fox Business, “If the city of New York is going socialist, I will definitely close, or sell, or move, or franchise the Gristedes locations.”
After all, there’s no way they’ll be able to compete against city-run supermarkets.
Now, he said he won’t leave until after the official election is decided. But plenty of other people have already done so or already started making plans.
I’ve been hearing for weeks from my contacts that you can’t rent a U-Haul anymore; they’re all sold out. And Isaac Toledano, CEO of Miami-based real estate developer BH Group, says he has signed more than $100 million in contracts with New York buyers since June.
As he told Fox Business, that’s around twice the amount he saw in all of 2024.
Nor is he the only luxury real estate agent down there reporting a surge in interest – and activity. Ask offices in Dallas, Austin, Boston, Philadelphia, Orlando, and even Baltimore… They’ll all say the same thing.
In-the-know New Yorkers are getting the hell out of Dodge while they still can.
Big Apple Exodus
On Tuesday, economist Stephen Moore, a friend of mine who served on President Trump’s first-term advisory board, posted on X that:
If Zohran Mamdani wins, the exodus of talent and capital will accelerate, and Wall Street may soon find a new home in Dallas.
New York has already lost $500 billion in income over the last decade. High taxes and overregulation have consequences.
Already, the bank to beat, JPMorgan Chase (JPM), employs more workers across Texas than the Big Apple. In fact, Texas now hosts more Fortune 500 companies than the entire state of New York: 54 to just about 50.
Florida’s count, meanwhile, is now 22 – and probably rising.
So it only makes sense that the city’s larger financial services sector lost 8,400 jobs between New Year’s Day 2025 and August. That was after it only added 6,400 jobs during that same eight-month span in 2024.
It’s clear that New York – the state, much less the city – just isn’t as attractive as it used to be, even without Mamdani.
State Comptroller Thomas P. DiNapoli recently forecast that New York City’s budget shortfall will be a whopping $13 billion within the next three years. “If this economy falters in any way or slows,” residents could “really be in for some very challenging decisions on spending and taxation.”
And we’ve known for months that, since its 2023 fiscal year, NYC has spent more money than it’s received. CBCNY.org reported in March that:
Adjusted for the City’s ability to shift the timing of paying some bills, expenses exceeded revenues by $636 million in fiscal year 2023, $1.11 billion in fiscal year 2024, and the imbalance may be even higher in fiscal year 2025. Still, the City has been able to balance its budget by using the surplus funds it had accumulated through fiscal year 2022.
Again, that’s without Mamdani’s stated plans to have the government pay for everything under the sun. And it’s without the loss of at least 75,000 tax-paying residents, many of whom are currently expected to fund those plans.
In other words, things aren’t going to get any better from here.
Two Bright Spots About the Mamdani Situation to Remember
Business podcaster Xavier Miller posted earlier today that there’s no way Mamdani will be able to implement all his goals. Free buses, for instance, “sound good during campaigns but collapse under basic math. You can’t run a city on ideas that cost billions and produce no revenue.”
And thank God he’s right about that. That’s bright spot No. 1.
But as he also points out, New York City – and other socialist-minded locations – have a very bad history of trying to make housing more affordable. And Mamdani will almost certainly be able to implement some of those plans.
Being a commercial real estate guy, I can tell you right now: This will not end well.
I’ll be covering those details on Monday, laying out exactly why government attempts to make housing more affordable usually accomplish the opposite.
For right now, though, I’ll leave you with one final bright spot to take with you into the weekend…
New York is an important city, but it’s not the only one. My hometown of Greenville, South Carolina, was just voted No. 4 on U.S. News and World Report‘s Best Places to Live.
There are greener pastures everywhere you look. It’s only a matter of time before New York residents, and businesses, start looking.
Regards,
Brad Thomas
Editor, Wide Moat Daily
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