Unlock the free White House Watch newsletter
Your guide to what Trump’s second term means for Washington, business and the world
The author is Visiting Professor at Vanderbilt University, Professor at the University of Toronto, and a Fellow of the Kresge Foundation
The approach of Zohran Mamdani being sworn in as the next mayor of New York puts the city’s economic establishment at risk. Hedge fund managers, private equity partners, investment bankers and real estate titans warn that new taxes and regulations will drive away business. Conservative pundits say capital and people will flee and the city’s economy will collapse.
But this is not the first time New York has been written off. The city has survived much worse – the Spanish flu, recession, de-industrialization and white flight, the financial crisis that almost left it bankrupt, riots and the crack epidemic of the 1980s. Every time, it came back stronger.
If you want to know where business really stands in New York, follow the money. JPMorgan Chase is spending $3 billion on a new Park Avenue tower. Google is completing its billion-dollar Hudson Square campus. BlackRock, Disney and Pfizer have each bet billions of dollars on Manhattan real estate. These are not steps by exiting companies.
New York’s staying power rests on fundamentals that few cities can match. The tri-state metro area of ​​more than 20 million people generates $2.5 trillion per year. Anchoring the Acela Corridor with a population of 50 million people from Boston to Washington DC, New York lies at the center of a mega-region worth more than $5 trillion, making it the world’s third-largest economy in terms of output – larger than Germany, Japan or the UK.
New York has also become a technology powerhouse. High-tech employment has increased by more than 25 percent since 2019. It is now the center of a digitally connected global meta-city linking London, Dubai, Singapore and other economic centres. Even Miami, where New York’s billionaires moved to avoid taxes, now serves as its economic suburb.
More than anything else, New York’s edge comes from its unmatched ability to attract top talent from around the world. The real threat to its prosperity is not capital flight; It’s the extremely high cost of living that is eroding the city’s ability to attract and retain talent.
Addressing the housing affordability crisis is essential to the city’s continued prosperity. And New Yorkers made that clear on Election Day. On the same ballot, he approved charter reforms to accelerate housing construction and remove zoning barriers that had hindered supply for decades.
Most of the young professionals in finance, tech and creative industries who supported Mamdani are not radicals. These are people who played by the rules, worked hard and built careers. Yet they still can’t see how they’ll afford a home, raise a family, or build a life in New York. His vote was not for socialism or upheaval. This was for their better future.
To the business community, this is not a threat – it is a warning. When a city becomes too expensive for talented and ambitious people to live in, it loses its edge. The most savvy members of New York’s financial and real estate elite already know this. Katherine Wild, president of the Partnership for New York City, which includes major city businesses, said she supported him in the general election. Even President Donald Trump, a longtime opponent of liberal cities, invited Mamdani to the White House and was visibly upset. “I’m confident he can do a great job,” he said.
The new mayor’s policies target a weakness that could actually undermine the city’s prosperity. But their agenda faces real obstacles — tight budgets, state oversight of major projects and vested interests that can stall initiatives in court for years.
He will have to face other serious challenges. Housing is the bitter truth of economics. New York’s affordability problem lies in a brutal combination of intense demand and construction costs that are among the highest in the country. Yet, even if some policies falter, larger imperatives will persist and shape the city’s politics and priorities long after this mayor is gone.
New York’s inherent strength has been its ability to correct its excesses. The extremes of the Gilded Age led to labor reform. New York was the birthplace of the modern union movement, which helped create the social compact that allowed working families to achieve the American Dream after World War II. The fiscal collapse of the 1970s led to public-private partnerships that revived its economy. And the chaos of the 1980s and 1990s inspired innovations in policing and public safety.
Mamdani’s agenda is the latest in a long series of adjustments that have kept New York at the center of the global economy for more than a century. And that’s why, despite the noise, you still shouldn’t bet against it.
