What pro-housing, pro-public service Mayor Mamdani ought to do with limited resources
It is budget season and New York is arguing about the numbers as City Hall and its defenders and opponents frame their tax proposals. Is the mayor’s proposed tax increase on high earners 2% or 2 percentage points? (It’s two more percentage points on incomes over $1 million.) Is an alternative property tax increase 9.5% or 1.17 percentage points? (It’s the former — which happens to also be the latter.) Is the city’s deficit $5 billion, $7 billion or $12 billion? (The current figure, down from earlier estimates, stands at around $5 billion.) The differences matter, both for substance and presentation, but any way you slice it, the City has a substantial hole in its budget, the economy is not to blame and the City’s commitments are set to continue to grow. On top of local structural issues, Mayor Zohran Mamdani faces a Trump administration that is likely to be more of an obstacle than a backstop, no matter how many pleasant meetings the mayor and president may have.
To address the budget gap, Mamdani proposes increasing taxes on high earners and corporations. Given substantial inequalities in recent wage growth — incomes for high earners are outpacing those for everyone else — there is a strong argument for more progressive taxation. That said, the move is fiscally and politically challenging. Despite the Trump administration’s giveaway to high earners and big businesses nationally, New York City is still a high-tax place to work and do business relative to elsewhere in the country, which could eventually hurt its competitiveness. Given the disproportionate share of taxes that high earners pay, this is a fiscal risk for New York. Further, Gov. Kathy Hochul, who is up for reelection and who has taken a collaborative approach to working with the mayor, seems to be drawing the line at a tax hike (for now).
Whether or not the mayor wins this budget battle with Albany, he should consider emphasizing reforms that give the City more bang for its buck by pursuing an abundance agenda — namely, making it easier, faster and cheaper to build what New Yorkers need, and that close the gap between what government promises and what it delivers. These reforms are achievable in tight fiscal conditions and would set the stage for a higher-capacity public sector when fiscal conditions improve and spending can increase.
The place to start, as detailed in our recent policy agenda, is improving the government’s own capacity. For example, the City had pursued reforms to its own capital construction process under the Adams administration. Mamdani should return to those efforts and push them even further. Currently, the School Construction Authority and Economic Development Corporation enjoy flexible authorities that allow them to build and procure without many of the requirements that the City’s departments of Transportation, Design and Construction or Parks have to follow. While some argue that the state should make some of these agencies authorities with some of the same flexibilities, Mamdani should argue for a comprehensive reform to reduce the requirements on City agencies and make it easier to build.
Alongside empowering agencies, the mayor could push to make it easier for them to hire. More than 13,000 city positions sit vacant, leaving departments unable to keep pace with basic demand. The civil service exam system — designed a century ago to prevent patronage — now makes hiring far too cumbersome and time-consuming. The State’s NY HELPS program proved that flexible, experience-based hiring can work, cutting weeks and months off timelines without leading to corruption. Under the last administration, the City nearly followed the state’s lead — and then backed off under union pressure. Mamdani should revisit that decision. And as the state pursues a permanent reform to civil service rules, the City should join efforts that would make the exams faster and job-appropriate and in the meantime use plainer language, more user-friendly design and better track applications to improve the hiring process.
Further, while Mamdani’s primary instinct may be to augment the public services that New Yorkers already receive and increase the number of eligible recipients, a more progressive approach would be to improve access for the people already eligible, who tend to be the neediest. Fair Fares, for example, reaches only 40% of eligible riders. Rather than having to find $600 million or more to enable everyone to take the bus for free, the City could improve coordination and auto-enrollment to ensure that everyone eligible gets the benefit they are due. The same is true for housing and cash assistance benefits, which have burdensome requirements aimed to prevent fraud, putting a time tax on the city’s poorest. Indeed, City Hall could start by extending the time between required renewals and then assemble a team of technologists from within and outside of government to overhaul application processes across government.
On housing, the mayor has already demonstrated the right instinct. His support for Hochul’s SEQRA modernization, which would exempt infill housing from lengthy environmental review, is aligned with his support of last year’s City Charter amendments. Now, the mayor should build on City of Yes and the charter amendments by rezoning along subway lines to both add homes and improve subway revenue. Fixing permitting is equally essential: Between 2010 and 2023, the average permit for a new residential building of five or more units took 18 months, with four years typically passing from initial filing to occupancy. Other cities have cut permitting to weeks. The mayor should also focus on building codes to make elevators cheaper for buildings to install by reducing size requirements and allow for bigger single-stair buildings to cut costs. The administration also seems interested in expanding modular construction and mass timber, which bring factory efficiency to home construction.
The mayor also should throw his weight behind making it cheaper and easier to build and establish new lines. Without reform, Phase 2 of the Second Avenue Subway could cost as much $4 billion per mile, many times the global average. To make projects like it and the Interborough Express cheaper, the City could reduce and streamline demands it makes on the MTA and support the MTA’s ongoing efforts to reduce costs (such as by right-sizing stations). On buses, results are available sooner: busways, all-door boarding, automated bus lane enforcement and curbside improvements would meaningfully accelerate the system. Combined with more Fair Fares uptake, this would result in a huge improvement for affordability and quality of life for working-class families.
Many of these reforms would involve Albany, but progress to improve the government’s plumbing may be easier now that the state sees the City’s fiscal challenges and the voters’ clear demand for change. And relative to a bruising budget fight, Albany lawmakers may well welcome the opportunity.
By moving on these fronts, Mamdani would be doing a few crucial things to advance his agenda. First, he would make life more affordable for millions of New Yorkers who cannot access public services and who see themselves as being squeezed out of their city. Second, he would be delivering on his promise to create a government “where excellence is no longer the exception.” Mamdani generated an enormous amount of hope and goodwill in his campaign. He may well win the state revenue fight eventually. Federal funding will eventually start flowing again to New York. If those new resources come, New Yorkers would benefit even more from having them flow through a more streamlined, outcome-oriented process.
