Citadel founder Ken Griffin, speaking at the Milken Institute Global Conference in Beverly Hills on April 8, warned that New York City's proposed pied-à-terre tax and the political climate under Mayor Zohran Mamdani are driving capital away. Griffin, who relocated his hedge fund from Chicago to Miami in 2022 citing crime and hostile state policy, said the current trajectory in New York echoes that experience. "Mamdani is making it really clear: New York doesn't welcome success," he said, referring to the mayor's campaign to increase taxes on the city's wealthiest property owners.
The proposed pied-à-terre tax would impose an annual levy on luxury properties valued above $5 million whose owners do not reside there full-time. New York City estimates the measure could raise $500 million annually, a fraction of its roughly $120 billion budget. The revenue math is modest, but the political symbolism is significant, particularly for high-net-worth clients who own second homes across multiple jurisdictions. For financial advisors, this trend is emerging as a meaningful planning issue, as clients face rising carrying costs and increasingly contentious questions about residency and domicile.
Similar measures are gaining traction nationally. In Rhode Island, a so-called "Taylor Swift tax" targeting homes valued over $1 million that sit empty for at least 183 days a year is set to take effect in July. San Diego residents will vote on a proposed $8,000 annual charge on vacant properties. Courts in Montana and San Francisco are weighing comparable policies. These initiatives reflect a growing political appetite for taxing second homeowners, a constituency that holds little electoral power in most cities where their properties are located.
Griffin's frustration extends beyond fiscal policy to political tone. He described a video filmed by Mamdani outside his $238 million Manhattan penthouse, released on Tax Day, as "creepy and weird" and raised security concerns about publicly spotlighting a private citizen's home address. The mayor's office responded by calling the tax system "fundamentally broken," one that "rewards extreme wealth while working people are pushed to the brink." Mamdani, a Democratic socialist, lacks unilateral authority to enact tax changes—that power rests with Governor Kathy Hochul and the state legislature. Hochul, who reportedly met privately with Griffin last week, has recently signaled support for the pied-à-terre proposal as a mechanism to address the city's budget shortfall.
Griffin indicated that Citadel's planned 850,000-square-foot development at 350 Park Avenue—a project involving Vornado Realty Trust and a $400 million loan Griffin extended in March—remains under internal deliberation. He later told CNBC the firm will "probably" proceed. Vornado Chairman Steve Roth expressed confidence on an earnings call the same day, stating, "Citadel has to be committed. They will be committed." Analysts at Evercore ISI remain optimistic about the development's progress.
Research on the impact of such taxes is mixed. A 2020 study of a comparable French policy found a 13% decline in vacancy rates in targeted cities, with a shift toward renting as the dominant behavioral response. In Vancouver, a vacant-home tax introduced in 2017 reduced vacancies from over 2,500 to below 1,000 by 2024, but the primary effect was that owners began renting properties rather than leaving the city. Lu Han, a professor of real estate at the University of Wisconsin, found that Vancouver's tax contributed to a lasting decline in rental prices by redirecting vacant stock into the rental market. However, housing analysts caution that these levies are unlikely to resolve structural housing shortages. Shane Phillips, housing initiative manager at UCLA's Lewis Center for Regional Policy Studies, called such taxes a "third-tier solution," though he acknowledged they generate some revenue and bring limited housing supply to market.
Not all second-home owners are ultrawealthy. A significant number of Americans residing outside New York, Rhode Island, San Diego, and Montana who already pay thousands in taxes for properties there could owe more if proposed measures pass. This dynamic is one that financial advisors navigating multi-state real estate planning will increasingly need to address, balancing the political narrative around luxury housing against the practical realities of clients whose situations are far more nuanced. For advisors helping clients think through these issues, the trend underscores the importance of proactive planning around residency, domicile, and property ownership structures.
Griffin, meanwhile, has revised Citadel's Miami tower plans to accommodate a larger office building—a 54-story structure already under construction. The move reinforces his pattern of voting with his feet, a signal that wealth and business will continue to flow toward jurisdictions perceived as more welcoming. As state and local tax initiatives proliferate, advisors should monitor developments closely, particularly for clients with multi-state real estate holdings. For more on how technology is reshaping advisor workflows, see Morningstar, Perplexity, and Plaid Integrate to Streamline Advisor Research with AI. Additionally, the ongoing competition for talent in the wealth management space is highlighted in LPL and Osaic capture $1.4B advisor team in dual breakaway from Raymond James.
