New York City needs to build 700,000 new housing units over the next 10 years, the Mamdani administration said Wednesday, a figure larger than previous estimates. Meeting that goal would require the city to hit very ambitious construction targets.

The report, the first to be issued under a 2023 City Council law requiring regular housing estimates, also reiterates the administration’s goal of 200,000 new, below-market affordable apartments over the next decade, which it set in its “Block by Block” policy announced earlier this year. 

Construction in low-density neighborhoods that have not built much affordable housing will be key. The report notes it will soon assign non-binding growth targets to neighborhoods and ask lagging areas to contribute to meeting New York’s burgeoning demand.

This fall, under charter changes approved by voters last year, the city is required to identify the 12 neighborhoods that have built the least affordable housing. Affordable projects in those areas now get a 90-day review process — instead of seven months — and can be approved by the City Planning Commission without a vote by the Council.

“This new report sets an ambitious citywide target for new housing production that recognizes the scale of the housing crisis,” said Brendan Cheney, director of operations and policy for the New York Housing Conference, an advocacy group. 

“And the targets for housing growth in all neighborhoods are also pretty ambitious, especially lower density and lower growth neighborhoods,” Cheney said. “It looks like it is really pushing all communities to add housing and contribute to the solution.”

Meanwhile, other groups used the announcement to push their key priorities.

The New York Apartment Association issued a press release calling attention to its plan to provide a rent increase for the 60,000 apartments currently vacant because landlords say they can’t afford to make them habitable after a long-term tenant leaves.

The Real Estate Board of New York focused on that issue and the 485-x property tax break whose requirements for union labor on larger projects has resulted in developers building only 99-unit buildings.

If New York is serious about producing 700,000 new homes, policymakers must confront the issues still holding housing back, including fixing 485-x and returning vacant rent-regulated apartments to the market,” board President James Whelan said. 

“The question is no longer whether we need more housing,” Whelan added. “The question is whether government is willing to make it possible to build it.”

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Mayor Zohran Mamdani may have capped rents for tenants in stabilized apartments, but for the rest of the city, the cost of renting just keeps going up.

Average, median and average per-square-foot rents rose to a record in Manhattan in July, with the median rent reaching $5,000 for the first time, 6.4% higher than a year ago, according to a new data tracker from real estate expert Jonathan Miller and industry publication The Real Deal.

All three metrics also hit records in Brooklyn, with median rent now at $4,500, a whopping 17% higher than a year ago.

Several Possible Factors

Miller attributed the increase in part to rising mortgage rates, which have meant New Yorkers who would like to buy homes can’t afford to and have remained in their rentals, diminishing the supply of available units.

But the 2025 FARE Act, which largely eliminated brokerage commissions paid by new tenants, may be playing a role in declining available apartment inventory in both Manhattan and Brooklyn. Miller said he thinks landlords are holding units off the market while they try to figure out how to avoid paying the brokerage fee.

Only 6,000 new leases were signed in Manhattan in July, a 20% decline. In Brooklyn, the 3,000 new leases were down by almost a third.

Other real estate experts have said landlords whose buildings include both stabilized and market-rate apartments would increase rents on the market-rate units to offset the rent freeze on regulated ones.

Apartment rents tend to rise during the summer, when many New Yorkers move, and then level off in the fall. Miller said he isn’t sure that will happen this year.

“I think that rents will continue to rise since mortgage rates are expected to rise, given the forces embedded in the economy, such as tariffs, the Iran War with its higher energy and transportation costs, and a new chair of the Federal Reserve” who is signaling that interest rates may have to increase, Miller said.

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Thank you, Argentina.

With the final numbers on the economic impact still trickling in, it is clear a sudden flood of fans swelled into New York for the World Cup final on July 19, boosting hotel occupancy and the rates hotels were able to charge. 

A Hotel Association of New York City analysis suggests that hotels collected almost $100 million in the last week of the tournament, and the group now says that local hoteliers are likely to see the additional $300 million in revenue that it first predicted back in December. 

The Hotel Association ascribes the last-minute boost to finalists Spain — the World Cup victor — and Argentina having far fewer visa barriers to entering the U.S. compared with some other countries in the playoffs, allowing fans to visit New York en masse for the Sunday match at MetLife Stadium.

“This was unexpected but welcome,” said Vijay Dandapani, the hotel association’s president and CEO. “But one summer does not make a turnaround.”

The figures will be welcome news to officials at New York Tourism + Conventions and the Mamdani administration, which had insisted last-minute bookings would show big gains, even as early numbers were disappointing.

Manhattan was awash in fans wearing Argentina’s blue and white colors the weekend of July 18 and 19, even as the defending champions lost 1-0. Red-clad supporters of Spain packed into Times Square and venues around the city for the match. 

Dandapani noted that bookings for the rest of the year trail comparable numbers for the record tourism year of 2019, when the city saw 66.6 million bookings — a number 2026 is unlikely to beat. A report last week from state comptroller Tom DiNapoli showed that hotel employment is 13% below pre-pandemic level, and that New York rooms rates also lag 2019 when adjusted for inflation.

Restaurants and bars have more to celebrate, though the boost to their business was also uneven.

Seated diners increased by 15% in June and 13% in July, compared to last year, according to reservation data from Open Table. However, the NYC boost trailed other cities including Baltimore, which saw an increase of 25% in June, while Minneapolis posted an increase of 62% in June and 54% in July. (Reservation data may also understate the World Cup effect, since fans are more likely to walk into venues to watch games rather than make a reservation.)

But if a restaurant or bar did air the games on big TVs, the gains were impressive. Sixty-three percent of respondents to a snap survey by the New York Hospitality Alliance reported a boost in sales and almost a third experienced a significant sales increase.  

Andrew Rigie, the alliance’s executive director, said that restaurants who did not have a TV fared worse than the venues that were able to stream the matches. 

Out of the surveyed businesses that did not air the matches, two-thirds reported that their sales declined from a normal business period. 

“The World Cup brought energy, visitors, and business to many bars and restaurants,” Rigie said in a press release. “It’s clear New York can host major events, but earlier communication, stronger coordination, and broader promotion can help even more local businesses and neighborhoods benefit.”

Some other numbers are subject to more analysis. For example, the economic impact is the sum of two figures: direct spending by visitors and the added spending that money generates as it flows through the economy. 

Gov. Kathy Hochul said the tournament delivered $1.2 billion in direct visitor spending, which generated a $2.1 billion total economic impact through the first five group-stage matches. Such estimates are always prone to exaggeration, but if accurate the final number might come close to matching an early FIFA prediction of a $3 billion economic boost.

The governor also said the event had brought $228 million in state and local tax revenue. But the governor’s press office didn’t respond to a question about whether that was a total or an increase over the same period a year ago. Before the World Cup got underway, city Comptroller Mark Levine estimated added tax revenue for the city would not offset the costs it incurred through police overtime and other measures.

One number is for certain. All eight matches at New York New Jersey stadium, the temporary name given to MetLife stadium, were sold out, packed with a total of 562,000 fans.

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Editor’s Note: On July 27, economist James Parrot of The New School informed The City Reporter he had mistakenly said New York City had gained 40,000 jobs in the first six months of 2026 when his analysis of state data had actually shown 21,000. The story and headline have been corrected.

New York City added 21,000 jobs in the first half of the year, more than expected, as a boom on Wall Street continues to support the economy.

The strength of hiring in the financial sector has allowed the city to overcome the cost of tariffs that squeezed small firms, inflation that exceeded the national average and soaring rents for market-rate apartments that have surged 35% since the COVID-19 pandemic.

The numbers are good news for Mayor Zohran Mamdani because they have translated into increased business taxes that are improving what loomed as a cash crunch at the end of the year.

“The recent jobs numbers show New York City remains on strong financial footing,” said Cassio Mendoza, a spokesperson for the mayor. “Despite national headwinds, business leaders keep betting on our city. The Mamdani administration will continue to grow the economy by retaining and attracting good jobs while relentlessly working to drive down the cost of living.”

The new jobs numbers come as Mamdani is expected to announce Wednesday that he will  appoint government veteran Anthony Shorris, currently a partner at mega-consultant McKinsey & Company, as head of the city’s Economic Development Corp. — a clear sign that the mayor has heeded the calls of business leaders to name someone who can boost the economy rather than emphasize progressive policies.

Shorris, 69, was a first deputy mayor under Bill de Blasio, ran the Port Authority and served in the Koch administration in the 1980s.

The mayor, a democratic socialist, has worked in recent weeks to emphasize he understands the role of business in the economy, especially in a July interview with columnist Errol Louis in connection with the groundbreaking for an American Express tower at 2 World Trade Center.

Finance Drives New Jobs

The biggest gains in jobs have come from business and professional services — a category that includes accountants, lawyers and consultants — as well as finance and health care. Home health care jobs had provided much of the growth in the economy in 2023 and 2024 but now the gains are for broader types of health care jobs.

Tracking job gains this year is more difficult because the state Labor Department data on home health care in 2024 and 2025 overestimated the number of jobs.

The 21,000 first-half gain figure comes from economist James Parrott, senior advisor to the Center for New York City Affairs at The New School, who adjusted the state data to correct for previous errors.

But the driving force of the city’s economy is Wall Street, where a rising stock market and lucrative deals involving artificial intelligence have sent profits soaring.

Profits from those deals for the five biggest banks headquartered in New York jumped 36% in the first half of the year, according to the most recent monthly update from the city comptroller’s office.

When Wall Street does well, it lifts demand for lawyers, accountants and consultants. Finance workers with an average annual compensation of more than $500,000 boost spending on retail and housing, generating billions for city government. Business tax collections surged in recent months on the strength of Wall Street.

Tariffs and Inflation Cost Small Businesses

The economic strength is surprising given the toll the Trump administration’s tariffs have taken on small firms amid higher inflation as gas prices soar over the war with Iran. The Manhattan Chamber of Commerce in February estimated that tariffs imposed additional costs of more than $4 billion on small businesses in the New York area.

In addition, inflation in the New York area has averaged 4.1% over the past year, compared with 3.5% nationally. Key has been the sharp increase in electricity costs.

Another major drag on the economy has been rising rents for market-rate apartments. Summer typically sees rent increases as more tenants are looking to move; this year has seen record prices in both Manhattan, where the median rent for a new lease hit $5,295, and Brooklyn, where it was $4,350.

But unless the economic outlook changes dramatically, the city will surpass the expected 2026 increase of 34,000 new jobs the mayor had predicted when he presented his executive budget in the spring.

While the economy is doing better than expected, many New Yorkers continue to lose ground.

The city’s poverty rate is at a record high — 26% — and twice the national average. Cash assistance and SNAP food benefit rolls are also at a record level. And the lowest-paid workers in the city are seeing the smallest increases in wages.

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Situated in prime Midtown locations near Grand Central, the boutique Fitzpatrick hotels were perfectly positioned to take advantage of a surge of tourists flooding into New York for the World Cup. But with seven of the eight World Cup matches to be played at MetLife Stadium across the Hudson completed, revenue increased only about 15% over June last year.

“The World Cup brought business to the city and it helped us, but I was expecting a lot more,” said CEO John Fitzpatrick. “It’s not the big hype everybody was talking up.”

But it was a different story at the Bronx Beer Hall in Belmont, where match days saw business spike anywhere from 85% to almost double at a time in the summer.

When Colombia went to a penalty shootout against Switzerland last week, bartender Kaliee Pierce could not hear herself over the roars of the crowd. “The energy is just unmatched right now in New York in general but especially at the beer hall,” she said.

With only the World Cup final yet to be played at MetLife, an event with sky-high prices expected to attract a corporate crowd akin to the Super Bowl, the premiere sporting event’s economic impact on New York is becoming clear: Hotels saw an uptick in business but far below expectations, while bars have cashed in on the soccer fever that infected so many New Yorkers.

“I think we will end up with a very fun event that did a lot to rehabilitate America’s image in the world — or at least it did until Trump intervened to get an American player’s red card overturned,” said Victor Matheson, a sports economist at Holy Cross University and a dedicated soccer fan. “And cities should see a modest benefit that should mostly cover hosting costs.”

The hype came from a FIFA projection of the economic impact. It estimated that the events would generate $3 billion in economic activity in the New York area based on the assumption that 1.2 million extra visitors would come for the tournament. They were expected to spend $1.7 billion, support 26,000 jobs and produce $432 million in state and local tax revenue, the international football group predicted.

FIFA did not respond to a request for comment.

While it will take a while for final numbers to be collected, it is clear from the hotel figures that nowhere near that number of people came to New York for the matches.

For example, the Hotel Association of New York projected that if more than 1 million visitors came to the city, hotel revenue would increase by $300 million. With one match to go, the association says it now expects the increase will be only $100 million — just one-third of the original estimate.

A key reason is that when their rooms didn’t fill up, hotels had to reduce rates, which happened in all 11 U.S. cities that hosted games. 

Matheson got tickets to one of the matches in Kansas City. With downtown hotels asking $500 a night, he booked at a Motel 6 40 miles away to save money.

“Three days before the game I cancelled that room, and moved to a nice Hilton near the airport for the same price,” he said. “Tons of affordable rooms available days before a game doesn’t give off ‘biggest event ever’ vibes.”

The reason became clear when he attended the match. Most of the crowd were residents of the Kansas City area. 

TV or Not TV

When it comes to bars and restaurants in New York City, those that did best were the places fans already knew.

Houston Hall, a downtown sports bar, is equipped with a giant projector screen and attracted three to four times its usual visitors on match days, said owner Jeremy Merrin. But his Times Square restaurant Havana Central saw revenue increase only 10% or 15%, even on match days. 

“It definitely matters what kind of venue you are. And whether you have TVs or not,” he said.

This is why Frantz Metellus, the owner of Rustik Tavern, a cozy American restaurant bordering Clinton Hill and Bedford-Stuyvesant, has not seen dramatic increases in his numbers despite running promotions on food and drinks during game time, and advertising watch parties. His revenue for the quarter containing the tournament’s opening weeks grew about 5% above the same quarter last year, compared to a 4% year-over-year growth rate in the first quarter of 2026.

“It hasn’t really been that huge for us. A handful of people are probably coming in to watch … maybe it’s a group of eight to 10,” he said.

Metellus said the diehard fans who plan their day around a match already know where they are going — usually to local sports bars. He described watching bars in his neighborhood prepare for this moment since the last World Cup — hanging up soccer jerseys and flags.

“I think it was intentional,” he said of the marketing.

For the bars on the winning side of the line, the boost is that customers are showing up on weekdays and afternoon hours, when these places would usually be empty. 

Anthony Ramirez, who co-owns the Bronx Beer Hall with his brother Paul Ramirez, said he has not seen higher spending by customers, but higher total revenue with increased visitors.

“People are coming during times they normally wouldn’t come,” he said. They are also staying longer. “It becomes their day,” Ramirez added. 

For example, sales at the beer hall rose 86% on June 13, a Saturday, when customers were expected. But the following Tuesday, June 16, saw an increase of 95%, marking a slightly larger increase than the weekend. The summer is usually the slowest stretch of the year for the bar, Ramirez added, which makes the numbers all the more impressive. 

Although venues interviewed had not hired any additional staff to help with the rush, the employees are getting more shifts and, with the increased traffic, significantly more tips.

On the beer hall’s biggest match days, according to figures provided by the bar, tips went up more than 130%. Pierce said the tips of her team have been increasing at similar rates as the gross revenue: “It’s great for bartenders right now.”

Ramirez said nobody has turned down a shift since the tournament began. “Everyone wants to come in,” he said.

Matheson said most cities’ additional revenue probably covered their hosting costs. But that will not be true for New York City.

Even before the World Cup began, City Comptroller Mark Levine had estimated the event could cost the city more than it generates. He estimated that even if 1.2 million visitors came, the actual revenue would cap at $55 million, compared to an estimated $70 million in security and emergency costs. With nowhere near the expected number of tourists, the city’s red ink is likely to balloon.

Ramirez is not counting it this way. “The energy of the city, the sort of unity that everyone’s feeling, it’s pretty awesome.” he said. “Forget business.”

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The second largest bank in the country.

The biggest cosmetics company in the world.

Two of the top 50 U.S. law firms.

And a score of AI companies ranging from industry leader Anthropic to small startups.

What they all have in common is that in the last three months they signed long-term leases for office space in New York.

New York City may be led by a democratic socialist who spends a lot of time castigating big business and landlords and leading a progressive coalition determined to raise taxes on the wealthy and corporations. But leaders at some of the largest companies and professional service firms remain firmly committed to New York, the latest data on the office market shows. The mayor has taken note.

“The fact that companies across sectors are continuing to make major investments in our city speaks to the strength of the fundamentals of our city’s economy,” Mayor Zohran Mamdani told The City Reporter in a statement. “They believe in New York’s future.”

Real estate executives, who remain skeptical of the mayor’s initiatives, say the good news comes with a caveat.

“When companies are making 10-, 15- and 20-year real estate decisions, they are betting on where they believe talent, innovation and opportunity will be concentrated in the future,” said James Whelan, president of the Real Estate Board of New York. “The surge in major office leases across industries reinforces the need for policies that keep New York competitive for employers and workers alike.”

Whelan’s warning came as Mamdani’s allies in the Democratic Socialists of America are preparing to push Gov. Kathy Hochul for long-sought new taxes on the rich and big businesses after the November election.

“Our focus is on maintaining New York’s competitive advantages and continuing to attract investment so that New Yorkers benefit from good jobs and share in the prosperity of our city,” Mamdani said. 

Rising Commercial Rents

The Manhattan office market is the strongest it has been in years, going back to well before the pandemic, according to a report from the real estate brokerage firm Colliers.

Leasing in the first half of the year was about 23 million square feet. If the second half is equally strong, the amount of space leased will be the highest since 2000. Each of the last three quarters has exceeded 11 million square feet contracted-for, the first time that has happened since 2002.

The amount of vacant New York office space declined by almost a percentage point to 13% and, in a sign of demand, the average asking rent has jumped by 6% over the past 12 months to $78.03 a square foot.

“It is not just by one key industry but financial services, professional services, tech, artificial intelligence, consumer goods,” said Frank Wallach of Colliers.

New York has one of the strongest office markets in the country, with the vacancy rate in the country’s major cities averaging more than 20%. Back-to-the-office requirements are strictest in the financial service companies that are such a big part of the New York economy. Landlords are aggressively converting obsolete office buildings to residential use, a trend not expected to be derailed by the near-collapse of the former Pfizer building on 42nd Street. 

And the diversity of the city’s business base plays a key role. For example, San Francisco, which is benefiting even more than New York from AI company growth, still has more than 22% of its office space available.

It has been clear for months that Wall Street firms and banks remained firmly tethered to New York despite a public confrontation between Ken Griffin, one of the wealthiest hedge fund executives in the country, and the mayor and complaints about plans for higher taxes from executives like J.P.Morgan Chase’s Jamie Dimon.

Those commitments were confirmed in the last three months when Bank of America announced that it would expand its presence from 1.8 million to 2.4 million square feet in a 20-year lease, taking all the office space at a tower on 6th Avenue and 42nd Street.

“One Bryant Park is a critical cornerstone for our global business,” the bank, which is headquartered in Charlotte, N.C., said in a statement.

The law firm of Simpson Thacher & Bartlett signed an almost 1 million square foot lease on Fifth Avenue and Cleary Gottlieb Steen and Hamilton reupped for 500,000 square feet downtown at 1 Liberty.

Cosmetics giant L’Oréal Groupe also renewed a lease for almost half a million square feet in Hudson Yards.

The AI Surge

Artificial intelligence may someday eliminate tens of thousands of white collar jobs that occupy so much office space, but for now AI companies are supercharging the market. 

Last year AI companies leased twice as much space as in 2024, according to Colliers. So far this year AI companies signed up for about 1.5 million square feet, nearly double the 800,000 square feet they signed up for in all of 2025.

On Wednesday the leading AI firm in the country, Anthropic, confirmed it would lease the entire building at 330 Hudson taking almost 500,000 square feet as it doubles its workforce to 1,000. The neighborhood is also home to Google’s New York campus where 14,000 people work, making it by far the largest tech company in the city.

But most of the AI companies are small startups — and many of them are choosing Brooklyn.

When the landmarked Refinery office building opened at the iconic former Domino Sugar factory in Williamsburg in late 2023, developer Two Trees figured the location would prove attractive to tech companies given the concentration of the talent in Brooklyn. Before too long, it was inundated with interest from the hundreds of artificial intelligence startups emerging in the city.

Today, the Refinery is 90% leased, with AI companies comprising half of the 80 relatively small tenants in the building. Many of the staff walk to work since they live in that part of the borough, and Two Trees found that many of the companies interested in the building find out about it from old-fashioned word of mouth, says Alyssa Zahler, the company’s head of commercial leasing

Two Trees’ asking rent is between $70 and $90 a square foot, not far from what Manhattan landlords get. The average lease is only 3,000 square feet and the company signs two to three-year deals given the uncertainty of where AI is headed and which startups will actually succeed.

But for now the Refinery is a buzz of activity.

“It is super important for them to be in the office five days a week or even seven,” Zahar said. “They are really committed to a team environment and having great views and proximity to other people is of utmost importance.”

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Mayor Zohran Mamdani says his $125.8 billion budget for the fiscal year beginning July 1, which closed a gap which was a large as $12 billion last year, shows that democratic socialists “not only understand economics just as well as the capitalists” but “can solve their years of mismanagement through an embrace of our principals.”

Fiscal experts ranging from city Comptroller Mark Levine to the Citizens Budget Commission have a very different take, since the budget relies on some $8 billion in “one shots” — measures that provide money only for the 2027 fiscal year — and a stretching out of pension payments which will cost billions more in future years.

When the final numbers are released in the coming days, the adopted budget is expected to forecast a deficit for the 2028 fiscal year of more than $7 billion — much larger than is typical and one that could grow substantially if there is any downturn on Wall Street or a recession.

“Yes, next year is balanced, but closing most of the gap with one-shots, short-term savings, and a pension stretch-out which shifts costs to future taxpayers leaves the city facing a gaping hole next year,” said Andrew Rein, president of the Citizens Budget Commission. 

“Groundhog day was a great movie, but it’s no way to manage a budget,” he said.   

Attention in recent days focused on resolving a standoff between the mayor and the City Council over the city’s increasingly expensive housing voucher program, whose cost has increased four-fold in the last four years to almost $2 billion. The closing of the huge $12 billion gap is primarily the result of a Wall Street boom which is boosting income taxes, additional state aid and a new tax on expensive second homes.

But along with those steps are a series of short-term savings that have raised the ire of fiscal watchers. 

“This agreement gets the city through an exceptionally difficult year, but it does not resolve the structural challenges ahead,” said Levine. “With large out-year gaps, limited reserves, and significant economic uncertainty, next year’s budget could be even more difficult.” 

The moves that make it likely next year will see another budget crunch include $5 billion in so-called one-shots, which means revenue the city found for 2027 to support ongoing programs that won’t exist next year. Actions like a delay in a state mandate to reduce class sizes were worth almost $3 billion in the new budget, but those costs can’t be held off forever..

For example, state aid to help the mayor expand the city’s child care programs is only guaranteed for two years.

Also controversial is a pension maneuver which delays payments required to bolster the retirement funds for city employees. The administration argues that its plan merely smooths out those payments, but the Citizen Budget Commission notes that the effect will be to lower contributions by $11 billion through 2032 but then increase payments by $15.6 billion for the following five years. 

“This costs more in the long run and unfairly requires New Yorkers in the 2030s to pay for services delivered over the next six years,” the commission noted in a report headlined “How He Did It.”

The mayor may also have to find money for raises for city workers as he negotiates new contracts with all of its unions. The financial plan includes money for annual increases of less than 2%, which are unlikely to be acceptable to the unions.

Most mayors make the most politically difficult budget moves in their first year when they can blame their predecessor. But a big budget deficit for the 2028 fiscal year is likely to be a key talking point when the mayor and his allies resume their effort for tax increases on the wealthy and corporations when the state legislature reconvenes in Albany.

For example, the Fiscal Policy Institute, a left-leaning group, on Tuesday, quickly pivoted to the need for higher taxes.

“Future expansions of public services — especially childcare and housing — that are central to the Mayor’s affordability agenda must be funded sustainably through new recurring revenue. This revenue must be authorized by Albany as part of the next state budget,” it said in a statement.

Mamdani supporters sent the same message last week when democratic socialists won a series of key races for Assembly and state Senate seats.

On election night, Gustavo Gordillo, a DSA co-chair in New York, said that his organization was already casting its attention to next year’s budget fight in Albany and beyond. “We’re going to start thinking about 2028 and what comes next,” he said

How Gov. Kathy Hochul will respond to the pressure isn’t clear if, as expected, she wins a new term in November. A few weeks ago she made it clear she thinks restraining spending, not more revenue, should be the priority.

“He inherited a financial shortfall that could hurt the bond rating of the city and result in a loss of confidence of investors as well as the business community, and I couldn’t let that happen — that was my motivation this year,” Hochul said in an interview with POLITICO. “Now they have their own team in place. They control the budget. They need to look hard at spending.”

Meanwhile, the fate of the city’s finances depend on economic factors beyond his control. 

Because Wall Street profits are soaring as the stock market continues to show gains and AI spurs its lucrative initial public offerings and business arranging corporate mergers, the city since November has increased revenue for the 2027 budget by $5.5 billion and for 2028 by a little more than $4 billion.

“Recession remains the number one risk for the city, particularly given current revenue projections,” said Rahul Jain, state deputy comptroller for New York City. “The additions made to the budget during the adoption process underline the importance of monitoring policy choices to expand affordability to ensure they are reaching those who need it in a cost-efficient manner.”

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New York should not stop at city-owned grocery stores when the need for a robust city-owned pharmacy network is even more compelling, argues a new proposal from a progressive policy group that will test the Mamdani administration’s appetite for challenging for-profit sectors of the economy.

But in a twist designed to broaden the plan’s appeal, the Vanderbilt Policy Accelerator says the city should combine that effort with ways to bolster independent pharmacies, who have remained a more robust presence in New York than in other major cities.

“Big chains are leaving the city, making large holes in the health care infrastructure in neighborhoods,” said Joel Dodge, director of industrial policy and economic security at the group, which is a project of the Vanderbilt University law school.

The idea may be not as far-fetched as it sounds. The city already runs a major pharmacy operation through its public health system, New York City Health + Hospitals, which could be expanded, the proposal says. And the plan is anchored in a growing progressive movement to find new ways to make health care cheaper and more accessible.

“We have seen over and over as we try to regulate health insurance or try to regulate pharmaceutical companies that it is hard to rein these companies in when their highest obligation is to shareholders,” said Christopher Morten, an associate professor at the NYU law school and a key academic in the effort. “We might be able to do better by allowing the public sector to compete with these companies — and government can out-compete them.”

Chain Pharmacies Cutting Back

The number of pharmacy stores in the five boroughs has declined by 45% since 2019, according to the annual report on chain stores released late last year by the Center for an Urban Future. An analysis by the city comptroller issued earlier this month showed that 9% of spaces previously occupied by essential retailers including grocery stores and pharmacies remain vacant. Many of the stores abandoned by the chains are covered by long term leases giving the landlords little incentive to release them.

As a result, says Dodge, many residents have long trips to pharmacies and the lack of competition leads to higher prices as well as inconvenience. Morten adds that many pharmacies don’t stock a wide range of drugs resulting in long delays in filling prescriptions.

The Vanderbilt Accelerator plan envisions three steps to improve access to drugs and claims New York City is uniquely positioned to implement them.

“New York has independent pharmacies that exist throughout neighborhoods and it has this existing Health + Hospitals pharmacies which gives it internal expertise which it can draw on and leverage,” Dodge says.

Big Purchasing Power

The first step would be to launch a delivery service that expands the one Health + Hospitals uses to stock community health centers. It should make the service available to all residents and use its purchasing power to demand lower prices from manufacturers, the plan says.

But since a delivery system won’t meet everyone’s needs, Health + Hospital should make its pharmacies available to anyone on Medicare, Medicaid or with private insurance. That would be followed by opening satellite locations — starting with the city-owned grocery precedent of one in each borough.

The final step would be to create a CityRx alliance of independent pharmacies that qualify by committing to minimum standards of scale and service and use its clout from the health plan for city workers and Health + Hospitals to win big discounts on drugs for its members.

Independent pharmacies need help, says Abby Mouzakitis-Fazio, who just relocated her Chelsea-based New London Pharmacy around the corner to 23rd Street to reduce her rent. The $12 million a year operation, which serves about 1,200 patients, earns so little in iinsurance reimbursements that Mouzakitis-Fazio keeps the operation running by selling high-end fragrances, skin and nutritional products.

A city-backed network of independent pharmacies could help, she thinks.

“The benefit to me by joining this would be if it reduced my wholesale price so I would be able to get more profit to cover the staff I need to hire so that it would reflect the work we need to do to advise patients about their medicines,” she said.

“We proved ourselves during the pandemic when we provided vaccines,” she added.

Efforts are underway around the country to involve governments more directly in the pharmaceutical business. 

California has established CalRx to help nonprofit manufacturers produce low-cost insulin and is being pushed to expand the initiative to other drugs. Massachusetts Biologics develops and distributes vaccines. A bill to create a state-owned drug manufacturing operation passed the New York Senate but wasn’t acted on by the Assembly.

A spokesperson for the Mamdani administration says it doesn’t know enough about the proposal to comment. Proponents see the report as the first step.

“These ideas are starting to get attention,” said Tahir Amin, founder and CEO at the Initiative for Medicines, Access, and Knowledge and a member of the Mamdani health transition team. “The foundation could be laid over the next year and the idea is gaining momentum.”

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One year after President Donald Trump signed the One Big Beautiful Bill to cut federal taxes and shrink spending, New York’s federally funded safety net is beginning to fray. But New York officials are taking very different approaches to deal with reductions in health care programs and food aid.

The budget signed by Gov. Kathy Hochul provides about $150 million to help with food insecurity and at least another $70 million is likely to be allocated in the city budget to help food pantries. Mayor Zohran Mamdani this week detailed the intensive city effort underway to make sure as many of the 2 million New Yorkers getting SNAP benefits will keep their eligibility.

But the Legislature went home last week without taking any steps to help 450,000 New Yorkers deal with work and paperwork requirements going into effect next year for the NY Essential that could push as many as 1 million New Yorkers out of the health insurance program.

What’s the difference? Money. Boosting food aid costs millions. Health care comes with a price tag in the billions.

Hochul has long argued the state can’t afford to pick up the cost for federal health care cuts and Assembly Speaker Carl Heastie agreed with her as the session neared its end, even as he called the decision “heartbreaking.”

“We’ve kind of bounced around some ideas, but no matter which iteration you try to come up with, it still requires the state to come up with billions,” Heastie said. “I’m not sure the money is there under our current tax structure.”

Progressive groups and advocates insist the more important cost is what will happen to the nearly half a million people who lose their health insurance.

“The health care cuts will take us back to an uninsured rate that is the same as before the Affordable Care Act was passed in the Obama administration with less than 90% with insurance,” said Emily Eisner, interim director of the Fiscal Policy Institute. “We have already seen a 100,000 decline in SNAP enrollment in the state. It’s a smaller decline than in other states but it is still precipitous.”

The 450,000 people who will be without health insurance on July 1 is a result of a deal the Hochul Administration reached with the Trump administration on the state’s Essential Plan which used a provision of the Affordable Care Act to provide cost-free coverage to people who made too much money to qualify for Medicaid.

It originally covered people making up to 200% of the federal poverty line but the limit was increased to 250% in 2024, or about $40,000 for a single person.

But the Trump tax bill sharply reduced funding for the Essential Plan and the Hochul administration won federal approval to restructure it so that only people making less than 200% of the federal poverty line would continue to receive coverage. 

Statewide that will continue insurance for about 1.3 million people — but 233,000 city residents will lose coverage.

Some argue that progressive groups like the institute are exaggerating the impact, said Bill Hammond, a longtime analyst of the state’s health care policies at the conservative Empire Center. 

Those losing coverage only were insured in 2024 and some may be able to purchase subsidized coverage on the Affordable Care Act exchange even though those subsidies have been reduced.

The Affordable Care Act exchanges are the only option for people with that income elsewhere in the country, he added.

In 2027, new rules will require a majority of Medicaid recipients to prove twice a year that they have  worked or volunteered for 20 hours a week. The Fiscal Policy Institute estimates that could force as many as 20% of the 3.6 million recipients statewide off the program. 

In all, the state’s impressive rate of insured residents — 95%, trailing only Massachusetts — is expected to drop to around 90%, the institute says.

Those estimates may also be inflated, Hammond argues, because the required work and volunteer hours are based on the federal minimum wage of $7.25 an hour. Since New York’s minimum wage is more than twice as high, recipients will only have to prove they have averaged 10 hours of work per week.

The Hungry City

The cuts to federal SNAP benefits come as demand for help with food has soared.

The number of visits to food pantries in New York City reached 47 million last year, up 87% from 2019, before the pandemic, according to figures from City Harvest.

“That’s about a million extra visits to food pantries a month for certain groups, especially households with children,” said Jerome Nathaniel, director of policy and government relations at City Harvest.

Effective last March 1, the Trump tax law expanded an existing set of SNAP work requirements to anyone 64 or younger, up from 54, and lowered an exemption for people with children to 14 years from 18.

The requirements were also extended to anyone who is homeless, to veterans and to young adults who had been in foster care. Those people began to lose coverage at the start of June if they hadn’t submitted documentation showing they met the work requirements.

The mayor this week said that outreach efforts had reduced by two-thirds the number of New Yorkers at risk of losing their SNAP benefits, reaching 223,000 of the 343,000 people who might be affected. The city worked with about 100 community groups to make sure they reached participants to file the necessary paperwork.

City Harvest, for example, hosted a training session for food banks on how to help people remain eligible, including by showing pantries how they could use some recipients as volunteers, allowing them to meet the requirements for work or volunteering.

Most of the government funding goes to help food pantries and other emergency providers meet the demand. The mayor has proposed $75 million in city assistance for the new fiscal year beginning July 1, but Council Speaker Julie Menin said the Council is trying to increase that to $100 million.

“There is still a lot of uncertainty,” said Nathaniel. “If this year was hard, next year will be one of the hardest years” as more provisions of the Trump tax law take effect. “We need to do more.”

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Even as their finances deteriorated and the values of their buildings declined, owners of larger rent-regulated buildings saw their property taxes increase.

Meanwhile, the disparity between the assessments on high-end condos and co-ops grew, giving the owners of some of the most expensive homes in the city a huge property tax break.

Those two data points, in a report released Tuesday by the NYU Furman Center, spotlight how the city’s widely derided property tax system places an enormous burden on larger rental buildings, especially those with mostly rent regulated units, while providing huge tax breaks to homeowners, especially those who occupy the priceless condos and coops.

While the Furman report is the latest in a long line of studies to document the flaws in New York City’s byzantine rules, it comes amid conflicting signals over whether Mayor Zohran Mamdani is committed to delivering on his campaign promise to fix the property tax system.  The administration has been unwilling to give a deadline for proposing a reform package although on June 6 it agreed to negotiate changes with advocates under court supervision.

“The important thing to keep in mind is that these disparities will discourage new development and undermine preservation,” said Brad Greenberg, Furman’s executive director.

The analysis by Furman, released as part of its annual survey of the city’s residential real estate market, shows:

• Buildings with three or fewer units, primarily-single family homes, comprise almost half of the market value of all residential buildings but pay only 15% of property taxes. Rental buildings account for a quarter of the market value, but pay 40% of the levy.
• No city in the country places such a huge burden on rental properties compared with homeowners, the report notes, citing data from the Lincoln Land Institute. New York taxes rental buildings at 5.67 times the rate of owner-occupied homes. By comparison, the disparity in Los Angeles is 1.01 and Chicago is at 0.98.
• Taxes are rising for rent-regulated buildings that have seen their finances squeezed. Since 2019, net operating income for rent regulated buildings after adjusting for inflation declined by almost 15%, but their inflation-adjusted property taxes per unit have increased from an average of $2,843 per unit to $3,082.
• Co-ops are valued at only a quarter of their market value and condos at only 20%, according to a Furman analysis of 10,000 sales in 2025, resulting in the lowest taxes when compared with market value.

The unfairness of the system begins with assessing single-family homes based on market values but rental buildings on income and expenses. The inequities are exacerbated by caps on increases in values of single-family homes, which gives an advantage to homeowners in areas with rising property prices. 

With homeowners among the most active voters, the City Council routinely reduced increases in their property taxes and transferred the burden to apartment buildings and other types of real estate, all of which pay more in taxes compared to their market value than homeowners.

The biggest strain has been placed on buildings which are almost entirely rent regulated, in part because, in a quirk, the city caps how much of their increased expenses can be considered for assessment purposes, the report says.

Meanwhile, while the law requires single-family homes to be assessed using market values, it mandates  the city to assess condos and coops as if they were rental buildings. With few “comparable” buildings in prime Manhattan areas, those assessments are particularly low.  In Furman’s analysis of sales data, the biggest gap between assessed and market value came from the top 10% of sales by price.

“It is a pretty important fact,” said Vicki Been, faculty director at Furman and the deputy mayor for housing during the Bill de Blasio administration. “The owners  of the top-valued apartments in the city are getting a huge tax break.”

Both Mayors de Blasio and Eric Adams promised to overhaul the property tax system but failed to develop a proposal to send to Albany for legislative approval. Since most proposals are designed to keep the actual amount taxes collected the same as now, reforms would likely anger homeowners who would see their taxes increase, although the impact would be phased in.

Mamdani pledged during the mayoral campaign and again in his inaugural address to do what his predecessors would not, in part because he said the system was unfair, but also because it would help landlords of rent regulated buildings deal with his proposed four-year rent freeze.

Now the Administration is sending conflicting signals about what it intends to do.

At a May breakfast sponsored by the Citizens Budget Commission, city budget director Sharif Soliman would only say that the administration was still studying the issue and suggested it was also looking at taxation of commercial and utility properties, which would make change even more politically challenging. 

But Friday, the city agreed to negotiate reforms with the Tax Equity Now Coalition, which is pursuing a lawsuit that argues the city’s system is unconstitutional because it discriminates against people of color.

It isn’t clear what could come of those talks, but the coalition has insisted that the city on its own has the power to make changes that would reduce inequities.

‘Comprehensive Reform’

Mamdani’s office reiterated its plan to reform property taxes in a statement to The City Reporter.

“Our administration intends to fix this system through comprehensive reform. The passage of the pied-a-terre tax demonstrates the mayor’s ability to work with our partners in Albany to get complex tax policy changes over the finish line,” said spokesperson Matt Rauschenbach.

The newly enacted pied-a-terre tax complicates the issue further, since it requires the city both to use market values to determine the additional tax on luxury second homes for the next two years, which suggests it expects the system to be reformed by then.

In the meantime, the disparities on the way the city taxes the most expensive condos and co-ops will become even clearer both to those who want reform and to those who don’t.

“You’re basically telling everyone how much their tax might increase if you started valuing coops and conds according to market value,” said Been. “And that’s going to create a very noisy group wanting to hold on to their existing tax break.”

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