By the time New York City’s Local Law 97 went into effect in 2024, the legislation, passed in 2019 and establishing carbon-emissions caps for buildings larger than 25,000 square feet, had undergone five years of implementation work. This included 363 meetings of a city-appointed Climate Advisory Board and working groups, multiple public hearings, and a comprehensive advisory-board report. That onerous process had a simple goal: maximizing compliance.
“This is something we lobbied for,” Charles Diamond, a former attorney for the New York City Comptroller’s Office and Mayor’s Office, told me this week. “We think this is right, and therefore we’re going to work with those who are impacted to get as close to 100 percent compliance as fast as we can.”
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This all stands in sharp contrast with the pell-mell rollout of Mayor Zohran Mamdani’s new pied-à-terre tax. Whatever the administration’s other goals, ensuring compliance seems less important than using the tax as a cudgel against the rich.
That was certainly the impression I got from a city council hearing on Tuesday about the surcharge’s implementation, which critics call “coercive,” “authoritative,” and “outrageous.” Even a woman dressed in an “Eat the Rich” T-shirt and speaking in favor of the levy agreed: “clearly, it’s been a mess.”
Tuesday’s hearing wasn’t intended as a referendum on the tax itself, which was marketed as applying only to a small subset of “global elites”—non-New York City residents who own second homes in the city valued at $5 million or more. Its purpose was to air concerns about implementation. Witnesses and political leaders spent hours highlighting a rollout that some saw as punitive and rushed by design. The city council wanted to pose questions directly to Department of Finance Commissioner Richard Lee, but he didn’t attend, issuing a statement instead that cited ongoing litigation between the city and a group of New York City homeowners challenging the surcharge’s rollout as the reason for his absence.
That explanation rang false to Diamond, who said he felt compelled to testify at Tuesday’s hearing after learning that administration officials would not attend. “We’re under a consent decree about homeless services,” Diamond told me. “That’s active litigation. . . . Are we now going to say that we don’t have to show up to oversight over homeless services?”
In response to my request, City Hall spokesman Matt Rauschenbach said the administration had made a “good faith effort” to work with the council to reschedule the hearing for the near future because it was “explicitly focused on the same issues at the heart of the litigation.” The city council declined, he added. “The administration’s focus remains on ensuring this surcharge can do what it’s intended to do: generate the revenue our city needs to serve New Yorkers across the five boroughs,” Rauschenbach said.
Whatever one’s view of the levy itself, it’s worth asking: Why was a tax of such complexity so hastily assembled and deployed? “I don’t know why it’s so hard for the administration to say, ‘You know what, you’re right. There have been mistakes made, and it’s up to us to fix them.’ But the posture they’ve taken is quite to the contrary,” Jason Haber, co-founder of the American Real Estate Association, told me.
The timeline was extraordinarily compressed. Governor Kathy Hochul introduced the pied-à-terre tax proposal on April 15. The surcharge was presented as a way to help close the city’s budget gap without affecting New York City residents.
With her announcement, Hochul gave Mamdani a green light to pursue enforcing the tax on “the ultra-wealthy and global elites.” The mayor relished this newfound power, as evidenced by his self-congratulatory video filmed in front of a building where Citadel CEO Ken Griffin, whom he called out by name, owns a $238 million apartment. In May, the state legislature approved the measure by including it in the budget, and Hochul signed the budget into law. On June 5, the city’s Department of Finance published proposed rules detailing how the surcharge would be implemented.
The tax took effect on July 1. On July 9, the city held a public hearing to help finalize rules. The next day, Mamdani and Finance Commissioner Richard Lee approved them, invoking a “substantial need” for the law to take immediate effect “in order for DOF to ensure a fair and efficient process.”
On July 25, the city, citing two provisions in the Administrative Code, published a “supplemental roll” of “covered properties” (those possibly subject to the tax) in the “same manner used to administer and enforce real property taxes.” Though both Mamdani and Lee acknowledged that the city was relying on outdated records, the DOF published on its website an easily searchable list of 960,000 properties. Under the rules, the burden fell on the homeowners to prove they qualified for an exemption.
One of the properties included on the list was the home of Representative Gale Brewer. “But I’ve been in that damn home for 365 days a year since 1994,” Brewer said at Tuesday’s hearing.
Despite the administration’s insistence that the information was already public record, critics like Haber said that this was the first time the city had made such a roll so easily downloadable and searchable. “There is a difference between public and published,” Haber said during his testimony on Tuesday.
Haber also testified that he was able to create an app in two hours using the DOF spreadsheet. He kept it on his computer, fearing that someone could use such an app “with malintent.” “I’m not even a computer programmer,” he said. “Imagine what someone could do who wanted to do harm to New Yorkers. It’s just that easy, and it’s just wrong.”
The city mailed letters to 17,000 property owners on July 23 notifying them that they may be subject to the new surcharge. This step was punctuated by more hectoring from Mamdani. “If you have a second home in New York City worth more than $5M, check your mailbox when you’re back in the five boroughs—because you’ve got mail,” the mayor posted on X.
Litigation soon followed. A group of homeowners, represented by former Deputy Mayor Randy Mastro, sued the city over its rollout, prompting a Staten Island judge to halt the levy temporarily. An appellate judge eventually allowed the rollout to continue. Meantime, the city extended the deadline for homeowners to apply for exemptions by one month.
As of August 18, the city had received 9,884 exemption applications and had completed 5,001. In total, 2,318 applications for exemption have been approved, a City Hall official told City Journal. The pied-à-terre surcharge will have just five months—from its April 15 inception to the new September 18 deadline—to evaluate exemptions.
Ryan Foley, a senior real-estate litigator at Starr Associates, told me that the surcharge’s inclusion in the state budget allowed it to bypass a legislative process that should have included committee hearings and floor debates. Its practicality was never fully debated, making problems with implementation and enforcement far more likely. “The tax that New Yorkers were sold is not the tax that is being delivered,” Foley said.
The tax has its defenders. Some spoke in its favor at Tuesday’s hearing, while dismissing the critics. “I think the wealthy homeowners here doth protest a little too much,” said David Packer, a schoolteacher and co-op owner.
“If this tax is blocked or significantly delayed because of the minutiae of the rollout, which perhaps does have problems, New Yorkers will see these hurdles exactly for what they are: ideologically motivated and meant to protect private wealth,” said a Ph.D. student and researcher at University of California, Berkeley who lives in Washington Heights. So far, anyway, the tax’s troubled rollout does not appear to have cost Mamdani any support with his political base.
But the reality remains, as Diamond observes, that “there was a political decision here to create a brand-new tax that’s never been levied before.”
“It appears to have a goal of punishment,” Diamond added.