How will Zohran Mamdani’s agenda interact with New York’s economy?
Economics, often thought of as the least slippery of the social sciences, is simultaneously the most impenetrable for outsiders. At its heart, it is the study of tradeoffs — how dialing up one thing, like prices, often winds up driving down another thing, like sales.
Many of these tradeoffs are especially pointed as New York City considers the ambitious agenda of Mayor Zohran Mamdani. In this issue, we explore the questions that are raised when economics meet public policy.
This isn’t new terrain for Vital City. We’ve been trying to answer closely related questions for the past year. When Mamdani said he wanted to freeze rent-regulated rents for four years, we looked at what it would do to the balance sheets of thousands of buildings, all other things being equal, and asked whether there was a better way. When Mamdani said that he wanted to dedicate $600 or $700 million to making buses free, writers in our pages wondered whether that would really be the smartest use of limited resources. And as the Mamdani administration advanced plans to establish a small network of grocery stores with free rent, no property taxes and heavy subsidy, our commentary asked what impact that would have on the already struggling small businesses in their orbit and why other market-distorting, price-inflating city regulations remain in place.
In this issue, we take a step back to pose a broader set of questions.
In many respects, New York City is an economic miracle. It’s not only the American capital of finance but of culture and tourism. It’s a leader in technology, a behemoth in health care and law and media and so much more. Into this $2.6 trillion ecosystem, running a government that spends $125 billion a year, steps a democratic socialist who hasn’t been shy about his intent to remake the city.
Is Mamdani’s agenda — free childcare to all, free buses for all, frozen rents for all rent-stabilized tenants and a wide range of other pricey promises — achievable, or is it destined to run into the brick wall of reality? Does the mayor’s core promise to make the city more affordable have any honest chance when the forces that move prices and salaries are much more powerful than anything the city’s chief executive can control? Can his promise to inject economic justice into government decision-making coexist alongside the basic responsibility of ensuring the city’s economy keeps growing?
For all his ideological commitments, Mamdani is a politician, and a canny one at that. He’s already demonstrated the ability to adapt when circumstances demand it. If his robust “Block by Block” housing agenda — which seeks to smartly leverage market forces and bulldoze obstacles to private development — is a sign of things to come, he’ll be charting a much more pragmatic course than many seem to expect.
Cities, and New York City especially, are living through a time of profound disruption on multiple fronts. The government in Washington is mercurial and hostile to cities. Amazon and other e-commerce companies keep putting pressure on brick-and-mortar businesses struggling to pay the rent. The Sun Belt continues to lure families and businesses looking for lower taxes and better weather. The work-from-home revolution has made office buildings and business districts more precarious than before (even if the Manhattan office market is booking at the moment). And — oh yeah — AI threatens perhaps the most significant rupture in the nature of work since the industrial revolution.
For this issue, we asked our contributors not just to wrestle with big questions but to try to point toward solutions. We are grateful that leading lights like Ed Glaeser, Sherry Glied, Nicole Gelinas, Martha Stark, Alicia Glen, Arpit Gupta and so many more have answered the call. As always, our contributors often disagree with each other, offering competing diagnoses and prescriptions for what ails New York. But the consistent thread that runs through their pieces is to beware of simple narratives. The “tale of two cities” rhetoric of progressives and the “all the rich people will leave” fears of conservatives don’t adequately represent the complicated economic realities that Mamdani and the rest of us are currently facing.
What we didn’t get to in these pages could fill three more volumes. Exactly what are the ramifications of Trump policies on the city’s economic health? Why do so many storefronts stay vacant for so long, and what can be done about it? What are the contours of the city’s underground economy? How can the city’s economy be better organized for the freelance workers who settle here by the thousands? Watch this space in the months to come.
