New Yorkers could be facing a “one-two wealth destruction punch” if Mayor Zohran Mamdani’s proposed rent freeze and tax hikes are implemented, according to economic experts who warn of potential long-term damage to the city’s housing market.

Mamdani’s housing plan, which formed a key campaign promise aimed at addressing affordability concerns, includes an immediate freeze on approximately 2 million rent-stabilized apartments across the city. Separately, his broader $127 billion budget agenda proposes higher taxes on wealthy residents and corporations, along with a potential 9.5% property tax increase if state lawmakers decline to approve his other revenue measures.

Edward Pinto, senior fellow and co-director of the AEI Housing Center at the American Enterprise Institute, believes the combination of policies would place landlords in an untenable position, simultaneously reducing their revenue through rent caps while increasing their expenses through higher property taxes.

“This would be a one-two wealth destruction punch,” Pinto told Fox News Digital. “The rent freeze would drive multifamily property values down and the increase in property taxes would drive both multifamily and single-family values down.”

The ripple effects, according to Pinto, could extend far beyond rental property owners to impact homeowners whose property values are tied to broader market conditions. He also warned that such policies would likely discourage new housing construction while incentivizing landlords to defer maintenance and improvements on existing properties.

“At the same time, the construction of new supply would contract and property upkeep would diminish as repairs are deferred and improvements are not made,” Pinto explained.

E.J. Antoni, chief economist at the Heritage Foundation, expanded on these concerns, noting that the risks extend beyond property values and could ultimately reduce the city’s housing supply—precisely the opposite of Mamdani’s stated goals.

“Economists—whether they are on the right or on the left—essentially are in universal agreement that when the government implements price controls in the rental market, you end up with housing shortages,” Antoni told Fox News Digital. “And not only do you end up with fewer housing units available, but the quality of those units consistently goes down as well.”

The economic warnings come at a critical time for New York City, which continues to struggle with housing affordability despite being a global financial center. The city’s real estate market has already faced challenges from changing work patterns post-pandemic and ongoing debates about zoning and density.

Emily Hamilton, director of the Urbanity Project at George Mason University’s Mercatus Center, echoed similar concerns about Mamdani’s housing policies but noted some potential positives in his overall approach.

“It’s going to exacerbate the city’s housing quality problems that the current rent stabilization law is already exacerbating. A rent freeze would just make that worse, and ultimately will contribute to the reduction in the supply of rent-stabilized units,” she said.

However, Hamilton did express cautious optimism about another aspect of Mamdani’s housing proposal—the construction of 200,000 affordable rental units. She explained that New York’s 1961 Zoning Resolution created significant barriers to housing development that have contributed to the affordability crisis in the first place.

“It’s regulation on top of regulation, rather than addressing the root cause of housing undersupply and just making it easier to build housing of all types at all price points,” Hamilton said.

The debate over Mamdani’s housing policies highlights the complex challenges facing major urban centers as they try to balance affordability with market sustainability. Critics argue that while rent control measures may provide short-term relief to current tenants, they often result in reduced housing quality and supply over time, potentially worsening the very problems they aim to solve.

Proponents of Mamdani’s approach contend that bold intervention is necessary in a city where housing costs have significantly outpaced wage growth for decades, forcing many longtime residents to leave neighborhoods they can no longer afford.

Mayor Mamdani’s office did not respond to requests for comment on the economists’ critiques of his housing plan.

With billions of dollars in property values and the housing stability of millions of New Yorkers hanging in the balance, the outcome of this policy debate could reshape the city’s real estate landscape for generations to come. As the administration begins implementing its agenda, both supporters and critics will be watching closely to see whether the economic warnings materialize or if Mamdani’s vision for more affordable housing can be achieved without the negative consequences economists predict.