Homeowners sue to unpublish list of nearly one million properties
A New York City Council oversight hearing held Tuesday examined concerns about Mayor Zohran Mamdani’s rollout of a “pied-à-terre” tax — an annual fee on second homes worth more than $5 million (£3.7 million), or condos and co-ops worth more than $1 million. The hearing focused on a public list the city’s Department of Finance posted at the end of July identifying nearly one million properties as potentially subject to the surcharge.
The Department of Finance said the addresses and personal information it posted were already available to the public as data the administration is legally required to provide each year. The list included addresses for celebrities and some of the city’s wealthiest residents, including hedge fund manager Ken Griffin and his $239 million penthouse, director Woody Allen, former Vogue editor-in-chief Anna Wintour, and actress Cynthia Nixon. The city ultimately sent tax notices to 17,000 people.
City Council member Gale Brewer said she and some other council members supported the pied-à-terre tax but pointed to “challenges” with its implementation. Council member Kamillah Hanks said the list unfairly targets homeowners and could pose a security concern, calling it “a hit list of the haves and the have-nots — a scarlet letter.” Hanks accused the administration of suggesting that home ownership was something “to be ashamed of.”
Other witnesses at the hearing voiced support for the tax and accused their so-called “wealthy neighbours” of using the hearing as an excuse to complain about rising taxes. Dave Backer, a professor of school finance, told the council that the wealthy homeowners criticizing the rollout “doth protest too much.” Beverly Solo, a New York City resident of 44 years who wore a shirt reading “Tax The Rich,” said the measure could raise important money for city services. “It seems reasonable and fair to ask those who don’t pay full-time income taxes here, but have luxury homes here for pleasure, to contribute to the wellbeing of New York City,” Solo said. She added that the rollout had been “a mess.”
A group of New York City homeowners has sued to unpublish the list of nearly one million properties and names. Mamdani’s representatives did not attend Tuesday’s hearing, which angered some in attendance. A spokesperson for the mayor told the BBC the administration asked to push back the hearing while it dealt with the legal challenge, but the council declined. Officials cannot testify on the matter while it is being litigated, the spokesperson said.
Mamdani has defended the tax as a fair way to generate $500 million in annual revenue in a city with “vast socioeconomic inequality.” The surcharge has won the support of Governor Kathy Hochul, who previously was hesitant to raise New Yorkers’ taxes. Mamdani ran on a campaign platform of affordability, pledging to raise taxes to cover services including universal child care and free and faster buses. His pledge to raise taxes has drawn backlash from some of the city’s wealthiest residents, who have argued it will discourage home purchases and investment in the US’s largest city.
Jason Haber, who runs the American Real Estate Association, said the list of names and addresses threatens residents’ safety. “Imagine the gift this is to scammers, to fraudsters, to anyone with ill will,” Haber said. He added that a foreign actor could download the list and send emails to residents posing as the city and asking for tax money. Haber told the BBC he has seen some buyers pause searches for expensive properties in New York because of the new tax, and that he believes the loss of revenue from fewer high-end purchases could offset the effects of the surcharge.
Morris Pearl, a former managing director at BlackRock and chair of Patriotic Millionaires, a group of wealthy Americans who advocate for taxing the rich, said the idea that the tax would drive buyers away was “absurd.” “The whole point of being rich is you can live wherever you want,” Pearl said. “Someone who owns a residence that is not their primary residence that’s worth more than $5 million has the ability to pay more than most New Yorkers do.”
Several other jurisdictions have experimented with similar measures. In France, homes are subject to an additional charge that varies across the country, with a 60% local tax surcharge for homes in Paris that has generated billions of euros in revenue. Vancouver, Canada, has imposed an Empty Homes Tax on residences that are vacant or under-used for more than six months a year. The 3% tax, launched in 2017 to improve housing affordability, has raised as much as $194 million in eight years and reduced housing vacancies by as much as 21%, according to research from the Canadian think tank C. D. Howe Institute. The same research found the tax did little to bring down the average cost of rent.
In San Francisco, California, residents in 2022 voted for an Empty Homes Tax requiring owners to pay between $2,500 and $20,000 for apartments that are vacant for six months or more. The tax faced fierce opposition from real estate and landlord groups, and after a group sued, a judge found the tax unconstitutional. It remains in limbo as the city appeals.
Pearl said the New York City administration’s decision to launch the tax with a list of wealthy residents may not have been the most diplomatic choice. “I do think that the mayor himself — I have suggested that he sort of unnecessarily antagonises people occasionally,” Pearl said. But he added, “I’m with him on the policy.”