NEW YORK — Last summer, as then-candidate Zohran Mamdani worked his charm on the city’s skeptical business elite, he floated an idea to soften the blow of his most high-profile campaign plank.
Alongside his plan to freeze rents on a million apartments, Mamdani said he would reform a lopsided property tax system that for decades has left rental landlords facing disproportionate financial pain.
It was a savvy rhetorical gambit: The tax system has long been a thorn in the side of New York’s most powerful real estate titans, some of whom backed a lawsuit to upend it nearly ten years ago. Unfortunately for Mamdani, property tax reform is also the city’s ultimate political third rail — one that mayors before him have tried, and failed, to tackle for decades.
Three months into his term, Mamdani appears well-positioned to win a rent freeze for some 2 million tenants who live in rent-stabilized homes, with a key vote slated for June. But there’s scant evidence he’s made any significant progress on overhauling the property tax system itself, which is the city’s largest source of revenue and one of the biggest costs borne by residential landlords — who increasingly warn they’re approaching financial ruin.
“It was a lot of campaign rhetoric,” said Jay Martin, executive vice president of the New York Apartment Association, a landlord group. “The reality when you get into office is much different.”
There’s broad agreement — well beyond the real estate industry — that the tax system should be overhauled. Homeowners, tenant advocates, budget wonks, civil rights groups, left-leaning Democrats and Trump-aligned Republicans all largely agree that the current framework needs to be fixed, and many say it perpetuates racial inequities.
Even renters, who comprise two-thirds of New York City residents, understand that high property tax costs affect their rents, according to a new report from the Community Service Society, a progressive research group that supports both a rent freeze and property tax reform. These renters in many ways powered Mamdani’s victory in a political landscape that’s more often bent to the will of wealthier homeowners.
But the biggest hurdle in the way of major changes is that lowering taxes on one political constituency would require raising them on another, or reducing the total amount generated from property taxes amid a $5.4 billion budget gap. The specific disparity Mamdani suggested taking on — reducing the burden on apartment buildings that are taxed at a considerably higher rate than other homes — is among the most difficult to solve. It’s not clear where that burden would go: Homeowners? Commercial buildings? Utilities?
“It's one of those things where, when you push one button, two other buttons light up,” said Democratic state Sen. Andrew Gounardes, who represents part of Brooklyn and supports property tax reform.
City Hall says it’s committed to overhauling the system, which would need approval in Albany. It has yet to share bill language with state lawmakers, however, saying only that it would do so “soon.”
“As Mayor Mamdani has said, our property tax system isn’t just outdated — it’s fundamentally broken and deeply inequitable,” mayoral spokesperson Joe Calvello said in a statement. “For too long, it has shifted the burden onto working families and tenants while protecting entrenched interests.”
He continued: “That’s why our administration will be working closely with our allies to advance a comprehensive package of reforms that will finally deliver a fair, transparent system — one that treats tenants and property owners with the dignity and equity they deserve.”
‘Built for a different time’
The issue has ramifications far beyond existing rent-stabilized buildings that would be affected by a rent freeze. The current system also drives up the cost, and complication, of new rental development. The city’s currently struggling with a mammoth housing shortage, illustrated by a rental vacancy rate of just 1.4 percent. By some estimates, it needs as many as 500,000 new homes over the next decade to meet demand.
New York City has one of the highest property tax disparities in the country between owner-occupied homes and apartment buildings, according to a survey by the Lincoln Institute of Land Policy. That means properties with comparable market values and sale prices are hit with radically different tax bills.
Take one particularly striking side-by-side comparison from southern Brooklyn.
A 42-unit rental building in Bay Ridge and a six-bedroom mansion in nearby Dyker Heights sold in recent years for roughly the same price: $3.2 million, according to a 2025 report from the Community Service Society.
The properties, which occupy roughly the same amount of land, were also assigned similar market values by the city’s Department of Finance: $2.9 million for the apartment building, and $2.4 million for the mansion. But the apartment building’s tax bill, at $150,700, was more than six times higher than the mansion’s.
The current property tax system, which dates back to 1981, was imagined for a radically different real estate market than the one New Yorkers contend with today. In the aftermath of the 1970s fiscal crisis, homeowners were fleeing the city, condos were far less common and the housing shortage fueled by population growth in subsequent decades had not yet taken shape.
“It was built for a different time completely,” said Iziah Thompson, a senior policy analyst at CSS. “It’s just obviously not built for a place that has a housing crisis, an affordability crisis.”
Former Mayor Bill de Blasio pledged to reform the antiquated tax system when he ran for office in 2013. But he made little progress beyond establishing a commission to study the issue, which released proposed changes during de Blasio’s last week in office.
That came as the city fought a lawsuit — still ongoing — from a coalition of developers, civil rights groups and homeowners known as Tax Equity Now New York that alleged the system is unconstitutional. The TENNY coalition argues the city can take administrative actions to reduce inequities, but has failed to do so. Specifically, TENNY says, the city’s assessment practices often contribute to how grossly some of the city’s most expensive properties — like condos on Billionaire’s Row in Manhattan — are undervalued, and therefore undertaxed.
Former Mayor Eric Adams made a desultory attempt at reforming the system last year but failed to find a state lawmaker willing to sponsor the effort, per New York Focus. Adams’ proposal was narrowly-focused, and would not have included rental buildings.
Budget director Sherif Soliman said earlier this year the Mamdani administration would build a reform plan off the recommendations of de Blasio’s commission. But that 2021 blueprint also focused largely on addressing inequities between different classes of homeowners — one-to-three-family homes, condos and co-ops — while floating little that would meaningfully reduce the burden on rental buildings.
Part of the reason was de Blasio placed a requirement on his commission that any solution it proposed must not lower the total amount of money brought in from property taxes.
“[If] you’re going to bring down property taxes for rental properties, how are you going to offset that revenue? We didn’t have a ready solution on that,” said James Parrott, a member of the de Blasio commission and an economist at The New School’s Center for New York City Affairs.
Thompson says Mamdani’s political coalition, which ran through renter-majority neighborhoods, presents new opportunities to reimagine the system to the benefit of tenants. Parrott notes that he had long thought property tax reform could only be achieved by a lame-duck mayor largely free of political considerations — that is, until Mamdani.
A tricky budget environment
While the political will might be there, the fiscal environment is especially inopportune. Mamdani is struggling to identify sufficient savings to fill a $5.4 billion budget gap he’s legally obligated to close, with the next fiscal year slated to start on July 1.
“The conventional wisdom is that the time when property tax reform is most likely is when you have a strong economy and revenues are growing strongly, so you have the opportunity to combine the reform with a tax deduction,” said Ana Champeny, vice president of research at the Citizens Budget Commission, a budget watchdog. “We’re not at that point right now.”
Any comprehensive reform plan would require broad political consensus, since it would need to be approved by the governor and state Legislature. Mamdani is already making another major ask of Albany lawmakers in his push to raise taxes on the richest New Yorkers. Despite Mamdani’s strong working relationship with Gov. Kathy Hochul, a more moderate Democrat, she has thus far resisted this proposal. As a pressure tactic, the mayor threatened to raise property taxes on everyone to fill the city’s budget hole if he doesn’t get the state tax hikes, but appears to have backed off that move.
It’s an open question how much a property tax reduction for rental buildings would trickle down to tenants, especially those in market-rate apartments. The de Blasio commission attempted to understand this better, convening expert panels on the issue, but found that testimony did not reveal conclusive evidence regarding the degree of the property tax borne by renters.
This adds another complication for any push to reduce the burden on rental properties: the lack of an immediate reward for politicians who would be taking on an exceedingly difficult issue.
Meanwhile, rent-stabilized landlords who are bracing for a rent freeze say the status quo is increasingly leaving their buildings in the red. This rent freeze would need to be approved by the Rent Guidelines Board, a nine-member panel that is now mostly comprised of Mamdani appointees. The panel’s annual process kicked off last week, and it’s expected to take a final vote in June.
Brooklyn landlord Lincoln Eccles, vice president of the group Small Property Owners of New York, says his property tax bill is one of the costs weighing down his 14-unit building in Crown Heights, which is mostly rent-stabilized.
“There’s not enough money now to maintain the place,” Eccles said. “The roof leaks, the boiler died — it’s one thing after another and the government is squeezing us.”
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