There's a new mayor in town.
New Yorkers elected 34-year-old Democratic socialist Zohran Mamdani on Tuesday night to lead the nation’s largest city. Mamdani, a progressive upstart from Queens, has made affordability the cornerstone of his agenda.
SOCIALIST SHOCKWAVE: ZOHRAN MAMDANI STUNS NYC AS VOTERS HAND POWER TO DEMOCRATS’ FAR-LEFT FLANK
Yet proposals like free buses, city-owned grocery stores and rent freezes have rattled Wall Street, drawing some of his fiercest critics. The clash underscores a widening divide between progressive visions for the city and the financial sector that has long powered it. Already many firms including JPMorgan have allocated headcount to states, including Texas.
Here’s a breakdown of his economic agenda.
Mamdani has committed to creating a "network of city-owned grocery stores focused on keeping prices low, not making a profit."
"Without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers. They will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing," Mamdani has promised.
MAMDANI’S RISE IN NYC MIRRORS ECONOMIC FLIGHT TO THE SOUTH, STUDY SHOWS
The mayor of New York City has control over city-run programs, so he can accomplish this goal by securing New York City Council approval.
Billionaire John Catsimatidis, owner of Gristedes and D’Agostino’s, the largest independent supermarket chain in New York City, has previously said he would consider moving his corporate office out of New York following a Mamdani win.
Atlanta Mayor Andre Dickens, who won re-election Tuesday night, has already launched a similar pilot program, opening a city-owned grocery store in a neighborhood that had long been considered a food desert.
ATLANTA’S CITY-RUN GROCERY SEES EARLY SUCCESS, SPARKING DEBATE OVER GOVERNMENT’S ROLE
Atlanta's Azalea Fresh Market opened on Aug. 28 in an area the Department of Agriculture classifies as both low-income and low-access, meaning many residents live far from full-service grocery stores.
Mamdani has vowed to "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 to keep double parkers out of the way."
This proposal would require coordination with the Metropolitan Transportation Authority (MTA). MTA is a state-run agency, which the mayor of New York City does not have direct control over.
MAMDANI’S RISE IN NYC MIRRORS ECONOMIC FLIGHT TO THE SOUTH, STUDY SHOWS
According to City & State New York, Mamdani's free bus fare promise would require an additional expense, possibly more than $700 million. It's unclear how Mamdani plans to pay for the additional fee.
Additionally, Mamdani has said that he wants to raise the minimum wage up to $30 an hour by 2030. "After that, the minimum wage will automatically increase based on the cost of living and productivity increases," Mamdani claims on his campaign website.
By allowing the City Council to create its own minimum wage law, Mamdani has proposed a way to raise the minimum wage in New York City without the state's approval. But a state-level increase is unlikely.
Mamdani has also campaigned to provide every New York family that has a child up to 5-years-old with free childcare. It is unclear how he will finance this proposal, which experts estimate could cost billions of dollars annually. He has previously floated a tax increase on the wealthiest New Yorkers and corporations to pay for the increased services, which would require state-level approval.
TREASURY’S BESSENT WARNS NYC: NO BAILOUT UNDER MAMDANI – ‘DROP DEAD’
However, New York Gov. Kathy Hochul has vocalized her opposition to tax hikes, which could create some hurdles for Mamdani. However, Hochul pushed for an increase in the state's child tax credit earlier this year, and she has nearly doubled funding for state-subsidized child care programs to about $2 million, according to The New York Times.
Mamdani said he would fund his programs through a "revenue plan" that would "raise the corporate tax rate to match New Jersey’s 11.5%, bringing in $5 billion. And he will tax the wealthiest 1% of New Yorkers, those earning above $1 million annually, a flat 2% tax."
While Mamdani has certainly done the math, a plan like this requires approval from the state legislature and the signature of the governor.
As Hochul doubles down on her opposition to tax hikes, Mamdani could face some roadblocks in delivering this marquee campaign promise, as reported in The New York Times.
Mamdani has pledged to freeze rents for tenants in rent-stabilized apartments and use every available resource to expand affordable housing.
On paper, a rent freeze might appear to be a simple fix for New York City’s affordability crisis. But experts warn it could backfire over time by discouraging investment and driving up costs for tenants in non–rent-stabilized apartments.
New York Apartment Association CEO Kenny Burgos warned that the policy could make developers wary of investing in New York.
"I don't know any investor or builder who would want to build in a city where the mayor is threatening to cap revenues and an ability to pay back the development of these projects," Burgos told Fox Business. "So you're just going to have a lot less attraction of people to build the housing that we need, which Zohran acknowledges that we need so desperately."
CLICK HERE TO GET FOX BUSINESS ON THE GO
Ed Elson, a business analyst and co-host of the "Prof G Markets" podcast, noted that rents are determined by the forces of supply and demand.
"The solution to high rents, therefore, is to increase supply and incentivize more construction. Paradoxically, rent freezes disincentivize construction, which causes rents everywhere else to go up even higher," Elson said.
He described rent freezes as a "too good to be true" policy that would not ultimately achieve society's goal of alleviating the cost-of-living crisis.
FOX Business' Daniella Genovese contributed to this report.
