HUD Secretary Warns Mamdani is Breaking Promise, Rents Will Go Up
Housing and Urban Development Secretary Scott Turner is sounding the alarm over what he says is a predictable and damaging consequence of New York City’s latest tax-and-spend ambitions. In an appearance Thursday on “The Alex Marlow Show,” Turner cautioned that Mayor Zohran Mamdani’s threat to raise property taxes would not punish the wealthy — it would hit renters and working families almost immediately.
“Rents are going to go up. You’re going to see people who are going to be out of housing, not be able to afford rents. Housing costs will go up,” Turner said.
His warning comes as Mamdani advances a $127 billion municipal budget and pressures Albany lawmakers to increase taxes on high earners. The mayor has stated that if Gov. Kathy Hochul and the state Legislature refuse to enact what he calls a “rich tax,” he will be “forced” to implement a 9.5% across-the-board property tax hike.
“There are two paths to bridge the city’s inherited budget gap,” Mamdani said during his budget presentation. “The first path is the most sustainable and fairest: raising taxes on the wealthiest and corporations.”
“If we do not go down the first path,” he continued, “the city will be forced to go down a second, more harmful path of property taxes and raiding our reserves.”
The Economic Reality for Renters
While political rhetoric frames the debate as a showdown with millionaires, housing economists point to a simpler economic truth: when the cost of owning and operating property rises, those costs are often passed downstream.
According to New York City Department of Finance projections for fiscal year 2027, rental properties across the five boroughs face an average effective property tax rate of roughly 12.4%. A 9.5% increase would push that rate to approximately 13.6%.
On a per-unit basis, the average property tax bill for a rental apartment stands near $5,886 annually. Under the proposed hike, that figure would climb to about $6,445 — roughly $560 more per apartment each year.
For landlords operating multiple units, those additional expenses quickly compound. In market-rate buildings, owners may seek to offset rising costs through higher renewal rates or steeper listing prices for new tenants. In an already constrained housing environment, renters have limited bargaining power.
New York City rents are currently up 6.6% year-over-year, according to Realtor.com, while vacancy rates hover around 1.4% — historically low. Nearly 90% of renters renewed their leases last year, leaving scant inventory for newcomers and intensifying competition for available units.
In such conditions, economists note, landlords retain pricing leverage when operating expenses climb.
Pressure on Small Property Owners
Even in rent-stabilized buildings, where annual increases are regulated, higher property taxes can squeeze operating margins. Owners may respond by trimming services, delaying maintenance, or cutting back on capital improvements to remain solvent.
Small Property Owners of New York has warned that the proposed tax increase could be the “final nail in the coffin” for family-run landlords managing rent-stabilized buildings. Critics argue that layering new taxes atop rent freeze policies could force smaller operators to sell — often to larger corporate entities better equipped to absorb regulatory burdens.
Mamdani recently appointed six new members to the Rent Guidelines Board, which determines allowable rent adjustments for nearly one million stabilized apartments. A central promise of his campaign was to “freeze the rent” for those tenants — a move supporters frame as relief, but critics argue could further strain housing supply.
A National Housing Debate
Turner framed the issue as emblematic of a broader policy divide. As President Donald J. Trump enters his second term committed to restoring economic growth, lowering inflation, and strengthening American homeownership, local leaders pursuing aggressive tax hikes risk undermining affordability in one of the nation’s tightest markets.
When government raises fixed operating costs, Turner argued, the ripple effects are unavoidable.
“Rents are going to go up,” he said again. “You’re going to see people who are going to be out of housing.”
As Albany deliberates whether to raise income taxes on high earners and New York City weighs its fiscal options, the stakes are clear: in a housing market defined by scarcity and rising prices, additional tax burdens are unlikely to fall on the wealthy alone. More often than not, they land squarely on the shoulders of working renters striving to remain in their homes.