Question A:
The New York governor has proposed a pied-à-terre tax to support the New York City mayor’s efforts to close the city’s budget gap: https://www.governor.ny.gov/news/governor-hochul-announces-pied-terre-tax-proposal-luxury-second-homes-valued-5-million-or-more
Details are starting to emerge: https://www.nytimes.com/2026/04/17/nyregion/second-home-tax.html
In the meantime, consider a tax that starts at 0.5% of assessed value over $5 million and rises to 4% of assessed value over $25 million, as in this 2019 proposal: https://www.nysenate.gov/legislation/bills/2019/S44/amendment/original
An annual property tax surcharge on second homes in New York City valued at $5 million or more would raise annual revenues of at least $500 million for the city over the next five years.
Responses
Responses weighted by each expert's confidence
Question B:
An annual property tax surcharge on second homes in New York City valued at $5 million or more would lead to a substantial exodus of businesses and high-net-worth individuals from the city over the next five years.
Responses
Responses weighted by each expert's confidence
Question C:
An annual property tax surcharge on second homes in New York City valued at $5 million or more would make housing substantially more affordable for ordinary New Yorkers over the next five years.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Mark Aguiar |
Princeton | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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 Dirk Bergemann |
Yale | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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Seems unlikely given the transition matrix implied by the Vancouver experiment. But there is a mansion transfer tax on induced sales so the total short run revenue effect is potentially in the ballpark.
-see background information here |
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 David Cutler |
Harvard | Bio/Vote History | ||
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I can find enough on what elasticity range would make this true.
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Edward Glaeser |
Harvard | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Many will find ways to avoid paying the tax - e.g., by renting out their properties. And there are also many questions regarding the valuation of the apartments.
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 Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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Far from a sure thing but it seems plausible
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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This depends on the empirical elasticities of migration and home buying that NO ONE in the economics panel knows. So, anyone who purports to give a definitive answer is just guessing without data. We are not supposed, as good economists, to guess without evidence.
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Some owners will undoubtedly leave. London has seen an exodus after raising taxes on this high wealth group. Uncertain how many will be left to pay the tax. And valuations will go down.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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I expect litigation to slow this down and then implementation will take time. So even without any behavioral responses I expect it to harder to raise any revenue than is being promised.
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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Many properties are valued below market.
-see background information here |
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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 William Nordhaus |
Yale | Did Not Answer | Bio/Vote History | |
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 Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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 Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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I suspect that the 500 million figure as calculated by proponents of the tax on the assumption that there will be no behavioral response, whereas I expect a behavioral response that will diminish the tax revenue.
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 José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Not an expert on revenue estimation.
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 Fiona Scott Morton |
Yale | Bio/Vote History | ||
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People with expensive unoccupied homes in Manhattan are wealthy and likely have inelastic demand.
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 Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Litigation, sales, and restructured ownership will reduce tax revenue.
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 Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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 James Stock |
Harvard | Bio/Vote History | ||
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 Nancy Stokey |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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 Ivan Werning |
MIT | Bio/Vote History | ||
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It should be straightforward to compute an upper bound, but I do not have the detailed information for that. Unknown elasticities make the effect lower, but there is a lot of uncertainty on that.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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A "substantial" exodus in response to such a modest tax would require a huge elasticity of mobility, which is unlikely to apply given the amenities and services that the very rich enjoy in New York City.
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Mark Aguiar |
Princeton | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Dirk Bergemann |
Yale | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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The tax induces a little in-migration of permanent residents and these properties will not remain vacant. "Substantial" depression of business activity seems unlikely.
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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There are few individuals affected to start with, and most of those affected would not pay much or would find ways to avoid taxation. But if someone like Ken Griffin leaves the city, this could have significant consequences for the finances of NYC.
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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See my previous response. Do not guess without evidence, my fellow economists.
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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NYC efftective property tax rates are about 1%. Any of the surtax proposals would make the marginal effective property tax rates for high value property very high by US standards, and create a large competitive disadvantage for NYC property.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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It will lead to a reduction. The question is how substantial. But, I will vote for substantial assuming it coincides with a deterioration in other services in NYC.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Disclosure: Ken Griffin was an early supporter of the Clark Center. I have not spoken to him about this. It depends on how this is might be implemented. If Citadel alone pulled the plug on its new project on Park Avenue that would be substantial. Be careful what you wish for!
-see background information here |
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Only income taxes have been shown to have much impact.
-see background information here |
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Did Not Answer | Bio/Vote History | |
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Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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Larry Samuelson |
Yale | Bio/Vote History | ||
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I do not expect residents to respond substantially to a tax on second homes.
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José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Massachusetts' millionaires' tax hasn't done so, and New York has more magnetism. But who knows.
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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If a wealthy person chooses to sell their expensive apartment to a wealthy resident, that is likely to generate more economic activity for the city than the visitor does
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Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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Nancy Stokey |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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It's second homes, so probably more responsive to property tax changes. But not enough to amount to a substantial impact.
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Ivan Werning |
MIT | Bio/Vote History | ||
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This is a possibility, but I see it as remote now. The direct effect is likely low. But there is a risk if starts to signal higher progressively in other ways that may lead to more significant migration decisions.
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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I don't see how a tax can make housing more affordable. If the argument is that people would leave their secondary homes in response to the tax and this would increase the supply of housing for low-income or middle-income households, then it seems a very strange argument.
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Mark Aguiar |
Princeton | Bio/Vote History | ||
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Dirk Bergemann |
Yale | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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On net, given how inelastic supply is, we don't expect this to stymie construction much. The tax should have price effects, but something substantial for typical NYers is unlikely.
-see background information here |
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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The tax is totally irrelevant for the question of affordability.
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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This is obvious. The amount of space to which this would apply is trivial, so that the effect on the supply of housing would be trivial. This could not possibly affect the price per sq ft of housing for people with modest incomes.
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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The increase in property tax rates would cause substantial reductions in the market value of the affected properties. This would not help many people. Being a Stanford home owner, I know that the increase in property taxes is capitalized into the home prices.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Will make it more affordable for rich New Yorkers. Unlikley to help the median New Yorkers. In fact, might hurt as the city gets less vibrant and there are fewer jobs. Again, see London and the UK.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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This is not going to change building supply anytime soon. See Rollet's job market paper for all the impediments.
-see background information here |
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Did Not Answer | Bio/Vote History | |
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Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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Larry Samuelson |
Yale | Bio/Vote History | ||
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"Affordability" typically refers to prices and rentals below the luxury housing market; I expect limited trickle-down.
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José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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No reason to expect this.
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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The policy either generates revenue OR expands the supply of housing, in which case prices must fall. But the effect will be small, not "substantial".
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Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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Nancy Stokey |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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Ivan Werning |
MIT | Bio/Vote History | ||
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No, quantitatively that is clearly impossible. I see way the spillovers from this small slice of land and building can affect the much greater issue of relative housing scarcity.
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