Blakeman Vows To Repeal the Pied-à-Terre Tax

Suddenly the Republican candidate for governor of New York has an issue — in the so-called pied-à-terre tax that the Democratic leadership has pushed through and the details of which are shocking New Yorkers. It’s now being called a “bungled” rollout, but that understates the scandal of how this Marxist measure has become a cloud that could put a damper on the economy of the city and state for years to come.Mayor Zohran Mamdani’s measure is a reminder of the limits of class warfare as a governing tactic. It’s provoking political pushback, too, as GOP gubernatorial hopeful Bruce Blakeman is pledging if elected to repeal the levy. His vow is a reminder that New Yorkers have for the tax to thank, along with Hizzoner, Governor Kathy Hochul and Albany Democrats. Not to be overlooked in the affray, though, is that the tax would inflict real damage on the city.The scope of that harm is sketched by a senior fellow in Domestic Policy Studies at the American Enterprise Institute, Howard Husock, who tells us that Mr. Mamdani’s pied-à-terre tax “will further distort a city housing market” that is already “made inefficient by rent regulation and affordable housing requirements.” The tax, he warns, “will discourage new investment, including by buyers who will pay high taxes but use few city services.”The lack of substantive debate on Mr. Mamdani’s tax is partly due to a sympathetic press, which has largely failed to probe the implications of the levy. At a time when the far left faction of the Democratic party appears to be ascendant, it’s proven all too easy for liberals to shrug off the idea of taxing the rich, via a levy on largely unused second residences, as a harmless way to help bridge the city’s widening budget deficit.Yet while the mayor’s proposed freeze on rent-stabilized apartments poses an obvious threat to the city’s housing stock — and is poised to trigger rent hikes for tenants of market-rate apartments — the consequences of the pied-à-terre tax could take longer to appear. To be sure, though, the levy on second residences will run afoul of the economic principle that when the government taxes something, the result is that there will soon be less of it to tax.In the case of the pied-à-terre tax, that suggests fewer high earners will choose to buy or maintain second homes at New York City. This would, say, crimp the city’s tax revenues. That’s because, Mr. Husock tells us, these owners pay high property tax bills while, because they don’t reside here full-time, using relatively few city services like schools or parks. In short, these wealthy non-residents are subsidizing public services for the city’s full-time denizens.The higher taxes, too, will discourage investment in new housing stock, hardly a boon for a city in the grip of an affordability crisis. This shortfall poses a problem, Mr. Husock tells us, even if such construction wouldn’t necessarily, in the long run, be used only for second homes. The tax, too, is raising hackles because of the difficulty in determining which homes are taxable, putting property owners in a position of having to prove they are residents.In short, the tax, in Mr. Blakeman’s telling, compels owners “to prove they don’t owe the government more money.” This tension, which has come to a head in recent days, is one reason why Mr. Blakeman is calling the new tax “oppressive” and “reckless.” He warns it will “drive even more families, jobs, and investment out of our state.” That message underscores the economic stakes as New Yorkers get ready to vote on November 3 in the race for governor.

Blakeman Vows To Repeal the Pied-à-Terre Tax

Blakeman Vows To Repeal the Pied-à-Terre Tax

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