Why millionaires are planning to escape from New York

Times

7 hours ago

The morning after Zohran Mamdani's surprise victory in the New York City Democratic mayoral primary, Tom O'Donoghue's phone was ringing off the hook.
O'Donoghue, who runs a luxury construction firm in the Hamptons — the summer playground for rich New Yorkers — said his clients were in 'complete disbelief' that a socialist was suddenly the favourite to win November's general election.
'One of my clients has 150 commercial buildings in the city and he just told me that he had contacted his attorney this morning. They're getting out of New York,' he said.
• Meet Zohran Mamdani, the man who promises to make NYC affordable
Though the former New York governor Andrew Cuomo had been the favourite to win Tuesday's primary, Mamdani snared 43.5 per cent of the vote, compared with Cuomo's 36.4 per cent. By 10.30pm local time, the ex-governor had conceded, saying of his opponent: 'Tonight is his night. He deserved it — he won.'
Mamdani, a 33-year-old state assemblyman, promised to freeze rent on stabilised apartments, impose a 2 per cent wealth tax on New York residents who earn more than $1 million a year, and raise the corporate tax from 7.25 per cent to 11.5 per cent. New York is home to approximately 350,000 millionaires and 123 billionaires, according to Forbes, and many are seriously thinking about leaving the city.
Bill Ackman, one of New York's most vocal billionaires, has long said that a Mamdani victory could lead to an exodus. In a post on X on Thursday, he said: 'The ability for New York City to offer services for the poor and needy, let alone the average New Yorker, is entirely dependent on New York City being a business-friendly environment and a place where wealthy residents are willing to spend 183 days and assume the associated tax burden. Unfortunately, both have already started making arrangements for the exits.'
In 2021, the top 1 per cent of New York City taxpayers paid 48 per cent of taxes — up from 40 per cent in 2019, according to a report from the city's finance department. Wilbur Ross, who served as commerce secretary in President Trump's first term, predicted that a Mamdani mayoralty could increase the city's financial difficulties. 'I don't understand how New York is going to survive the desertion of wealthy people,' Ross, a former Wall Street banker, told The Times. 'New York City does not have strong financials and there is significant risk that the city will get into financial trouble because a few tens of thousands pay the bulk of income tax.'
Harriet Newman Cohen, a divorce attorney to New York's wealthiest, is already worried about the exodus. The lawyer represented Mamdani's mother, the Indian-American filmmaker Mira Nair, when she split from her first husband in the late 1980s, but she says Mamdani's platform will make life harder for her clients. 'This will be hard on business,' said Newman Cohen, who also represented Cuomo during his 2005 divorce from JFK's niece Kerry Kennedy. 'I may see my practice go down because wealthy people will move out of New York City and my client base may go down.'
• What Zohran Mamdani's win means for the Democratic Party
Charles Saffati, who owns the Carlton Fine Arts gallery on Madison Avenue, where a $100,000 Marc Chagall painting was lost in a smash-and-grab robbery in 2023, said Mamdani's plans to cut the budget of the city's police department and create a new department focused on mental health intervention was 'crazy'.
'The quality of life would be disgusting,' he said. 'Wealthy people, along with anyone afraid of crime, will go to the suburbs and many companies will be looking for other places to move.
'All I've heard in the last day and a half is people saying they want to move their businesses out of the city.'
Wealthy New Yorkers have long been attracted to the Republican stronghold of Florida thanks to the warm weather, low cost of living and lack of state income tax. During the pandemic, an influx of wealth reshaped the luxury property market in south Florida; from September 2019 to January this year, the median listing price in Palm Beach nearly doubled from $1.5 million to $2.9 million, Realtor.com figures show. Even before Tuesday's upset, the Florida governor, Ron DeSantis, trolled New Yorkers over the prospect of a Mamdani victory. 'Just when you thought Palm Beach real estate couldn't go any higher,' he posted on X this week.
Mamdani, who has been called a 'TikTok savant' by The New York Times, won nearly half of early voters younger than 45 — many of whom recently have moved to the city and are struggling with the high cost of living and unaffordable rents. He also has a few wealthy backers, including the Sex and the City actress Cynthia Nixon, who celebrated his election win at a rooftop victory party in Long Island City on Tuesday night. 'Zohran's victory was so hard-fought, so hard-won and so deeply needed,' the actress wrote in an Instagram post, calling it 'one of the greatest nights ever'.
Euan Rellie, the managing partner of the Wall Street investment bank BDA Partners, said he noticed this enthusiasm for the young mayoral candidate when he was dining at his favourite restaurant Malaparte in the West Village this week. The young waitresses were 'cockahoop' about the prospects of a Mamdani victory — a feeling he has some sympathy for.
But he said he hoped that Mamdani would temper some of his policies before the general election. 'I just wish he would reach out to business and say, 'we recognise business does something for New York',' Rellie said. 'Because honestly, if you get even 10,000 rich people leaving New York and going to Florida — 10,000 more on top of all the ones who've left — that's a terrible dent to the tax base.'
Mamdani's win has already had an impact on publicly listed firms with a stake in the New York property market. Shares of Flagstar, a regional New York bank which has billions in outstanding loans to rent-stabilised apartment buildings, fell by 6 per cent on Wednesday.