Zohran Mamdani’s policies would be an economic disaster

Op-ed views and opinions expressed are solely those of the author.

Zohran Mamdani, a New York State Assemblymember and presumptive Democratic nominee for Mayor of New York City, has a platform apparently focused on addressing the city’s affordability crisis while promoting social and economic justice. He has, however, suggested several policies that will worsen just the problems he seeks to solve.

He wants to freeze rents for rent-stabilized apartments.  He says this will provide relief to tenants of those apartments.  The problem is that if the rent is frozen, what happens when costs increase?  He will use taxpayers’ dollars to cover the higher cost.  That means taxpayers will further subsidize this housing, leading to higher taxes for all NYC residents.

He further wants to entirely use only union workers to build 200,000 new housing units.  These, too, will be rent-subsidized homes, meaning the NYC taxpayers will pay more in taxes.  The required union labor will significantly raise the construction cost, meaning more taxpayer dollars are needed.

As he adds more city-subsidized units, private developers of residential units, who can’t compete, will leave the market, or they will build just for the higher end of the market.  The problem is that the higher tax rates will encourage high-income earners to leave the city.  There will be less demand for the higher-priced units.  Private developers will leave the city simply because they can’t sell their units.

Mamdani notes that grocery prices in NYC are too high.  His solution is the remove profit, which, he reasons, will lower prices.  He wants non-profit, city-owned grocery stores.  He says the city owned without earning a profit will lower costs.

He says the non-profit city-owned stores will be the answer to lowering prices.  There is a problem when the profit motive is eliminated. That is, there is no incentive to lower costs.

The result will be that, without the profit motive, costs will escalate.  Since he wants prices to be kept low, the taxpayers will foot the bill for the cost increases.

The longer-term problem is that privately owned grocery stores will not be able to compete.  Most will end up closing, so there will be far fewer grocery stores in the city.  Mamdani’s solution would be to say, “so what.’  He will add more government-run stores, meaning the taxpayers will pay even more to support these stores.

Mamdani wants to ease the burden of high transportation costs on working New Yorkers.  To do that, he will make buses fare free.  Since there is a substantial cost to operate the buses and since the users of the service won’t have to pay fares, the taxpayers will foot the bill.

NYC has a complex corporate tax system.  The corporate tax rate is nearly 9%, depending on a number of factors.  He wants to raise that.  New York has a state corporate tax rate that could be as high as 7.25%.  In total, NYC-based corporations will end up paying up to 16%of the earnings in addition to the federal income tax they pay.

Corporations will leave NYC.  So will the highest-earning individuals.  NYC has already seen an exodus of high-income earners.  Tens of thousands have left the city, and many go to low-tax-rate states like Florida or Texas.

Mamdani also wants to raise the minimum wage to $30 per hour.  That will drive small businesses out of the city, simply because if a worker is worth only $20 per hour and the employer is forced to pay $30 per hour, there will be no profit.  With no profit, businesses will close.

If Mamdani wins the mayoral race and if he implements his policies, which he says will help the lower-income earners, the results will be disastrous.  Residents will flee the city mostly to avoid paying higher taxes and to seek areas where they have grocery store options.

Subsidized housing will be available to the few, while the majority have no options as private developers leave to build in areas with market-rate housing.

For the sake of a prosperous and thriving NYC, let’s hope Mamdani is not elected mayor.