Kalshi places democratic socialist Zohran Mamdani’s odds of winning Tuesday’s New York City mayor election at 93%. His dominance has been stable and consistent since prediction markets started tracking him. Mamdani is a member of the Democratic Socialists of America (DSA), which is explicitly anti-capitalist and for defunding the police. Mamdani wants to raise taxes on companies by $5 billion and on individuals by $4 billion to increase the government’s reach into new areas such as government-run grocery stores.
This appears to be a winning political message. While he has never run a large complex organization such as the city of New York, he is likely to be at least partially effective at implementing his priorities. A caveat is that he has far more leeway on some such as shutting down the city’s merit-based gifted and talented school programs than on others such as raising revenue without the state government’s agreement. He could lose the election, could water down his plans, or could fail to implement them. But I expect none of those to derail him.
Law enforcement will be immediately impacted. Police modify their behavior based on political leadership. For example, where they expect district attorneys to prosecute criminals, they make more arrests. Where they expect DAs to let criminals off, they show far less curiosity. They literally get out of their vehicles less – it is safer and more convenient than chasing around criminals that will just be let off. At least it is safer for them; it is far less safe for everyone else. People respond to incentives. In an anti-police administration, the incentives will shift against stopping crime.
Families that want the best schools for bright kids could flee to the suburbs. New York has long had diverse quality in its elementary schools, with some excellent schools at the top where bright kids of all races and socio-economic backgrounds could thrive. Mamdani is explicitly anti-meritocracy in education and wants to shut down programs that appeal to education-oriented families. This is an area where New Yorkers will soon discover the mayor has broad latitude to act on his preferences. This will be especially hard on families that value education but can’t yet afford private schools.
Mamdani’s plans are premised upon a $9 billion tax hike. He will have a small and big problem to contend with. The small problem is that this part requires the acquiescence of Albany. Surmountable. He’s been endorsed by the state’s governor. Many moderate Democrats are more at risk of crossing him as their major electoral threat comes from their left in primaries. The big problem is that New York has a highly mobile revenue base. The wealthy taxpayers that Mamdani hates can leave. Many have homes in Florida and planes to get them there. But those left behind will suffer.
So what? So it could be a tough time for New York City real estate. SL Green’s (SLG) core commercial real estate portfolio is 92% in Manhattan. It can’t leave. Shares currently cost $51.25 but could have a lot of exposure to companies leaving for more hospitable jurisdictions. The St. Joe Company (JOE) is a decent proxy for Florida real estate, where there’s no state income tax and a government trying to attract instead of repel productive citizens and their businesses. It popped from under $50 to $56.80 since I started writing this, but it could continue to do well as Florida absorbs economic refugees.