The possible victory of Zohran Mamdani, the 33-year-old democratic socialist, in the upcoming New York mayoral polls has people on Wall Street worried. In Manhattan’s financial district, pessimistic predictions are circulating. According to Wall Street recruitment specialist Michael Nelson, his clientele, typically earning above $1 million annually, express serious concerns.“This will be the end of New York City as we know it” reflects the sentiment amongst his affluent clients regarding Mamdani’s potential November victory, he told Bloomberg.The impact is already visible in New York City property-related stocks. Flagstar Financial Inc., which provides loans to apartment complexes, experienced up to 6.7% decline on Wednesday. Property companies Empire State Realty Trust, SL Green Realty and Vornado Realty Trust also registered losses.
Rise of Zohran Mamdani
Even critics acknowledge that Zohran Mamdani, the 33-year-old democratic socialist, has garnered significant public support.“It’s officially hot commie summer,” wrote hedge fund billionaire Dan Loeb on X, following Mamdani’s unexpected victory over Andrew Cuomo in the Democratic primary for the New York City mayoral position.Also Read | Days of South Asians being ignored and erased in New York politics are gone, says Zohran Kwame MamdaniThe statement reflects the genuine concern amongst the city’s wealthy circles that a Mamdani victory in the November general election would result in increased taxation, potentially causing affluent residents to leave the five boroughs.An important detail is that Mamdani’s tax proposals would require approval from New York State Governor Kathy Hochul, who has expressed opposition. Additionally, Mamdani’s plan to raise $70 billion in debt faces significant obstacles.According to Kathy Wylde, a prominent New York intermediary who has facilitated connections between business leaders from finance, real estate and media with city officials for years, whilst Mamdani appeals to the youth, his ideological stance causes significant concern among taxpayers and employers.However, Mamdani successfully gained support from voters across diverse socioeconomic and racial communities.In his Wednesday morning address, he emphasised that “a life of dignity should not be reserved for a fortunate few.”The foundation of his success lay in a strategic social media campaign that combined populist economic policies and progressive cultural messaging through viral-worthy video content.On Tuesday, he featured in an Instagram video alongside Emily Ratajkowski, who commands over 29 million followers. The model and actress sported a “Hot Girls for Zohran” t-shirt whilst encouraging voter turnout.This exemplified the clever strategy that enabled Mamdani to build a substantial volunteer base numbering in tens of thousands. These supporters diligently canvassed neighbourhoods, maintained street presence and utilised social media to reach voters. They promoted his policy agenda: Free childcare, state-operated grocery shops with reduced prices, complimentary bus transport, rent controls and additional measures – largely funded through increased taxation of wealthy individuals.
Wall Street worried
New York’s establishment elite supported Cuomo, a 67-year-old Democratic veteran who positioned himself as an experienced centrist capable of addressing the city’s challenges, from underground transit safety to the widely recognised cost-of-living issues.His campaign received substantial financial backing from prominent figures, including Michael R. Bloomberg, founder and primary owner of Bloomberg News parent Bloomberg LP, along with Bill Ackman, Loeb and Vornado’s Steven Roth. His political action committee, Fix the City, accumulated an unprecedented primary campaign fund of nearly $25 million.However, the campaign’s advertising strategy predominantly focused on criticising Mamdani rather than highlighting Cuomo’s administrative plans. Despite resigning as New York governor following sexual harassment claims, which he contests, Cuomo maintained strong establishment support, including an endorsement from former President Bill Clinton.In contrast, Mamdani received endorsements from progressive leaders, including Democratic Congresswoman Alexandria Ocasio-Cortez and Senator Bernie Sanders.Some financial sector representatives appear to be considering a more accepting stance towards the democratic socialist candidate.“While we might disagree on certain issues, we should always be hopeful that Mamdani — if he ends up being elected mayor — can unite the city to address its critical education, public safety, housing and economic development needs,” said Ralph Schlosstein, former head of Evercore Inc. and a longtime Democrat, according to the Bloomberg report.According to Rich Farley, an experienced Wall Street legal expert, numerous affluent residents view the November general election as crucial. A Mamdani victory could prompt wealthy individuals to seriously consider relocating from the city.Before this contest, high-net-worth donors must determine their stance towards Mamdani. Cuomo, potentially running as an independent, needs to convince supporters of his viability outside the Democratic primary framework.Should he continue his campaign, he will face Republican Curtis Sliwa and incumbent Eric Adams, who is running independently after avoiding the primary following corruption allegations.Some Wall Street professionals are contemplating more decisive actions.“I’ve already talked to hedge fund guys who have told me they have got a foot out the door,” said Eric Rosen, who previously held senior positions at JPMorgan and in hedge fund management.“I left New York City 8 years ago because I didn’t like the way the city was being run,” he said. “I sold my Park Ave. co-op and its now down 25% and my house in Florida is up 250%. The market has spoken.”