At the Cato Institute, Scott Lincicome explains that it isn’t billionaires who will be forced to leave New York City; they can afford higher prices and higher taxes if they don’t mind enduring them. Instead, Lincicome reports, it is HENRY workers, “high earning not yet rich” who will be forced to leave the city’s higher costs. He writes:

Yet even a watered-down version of Mamdani’s agenda—partial rent freezes, higher minimum wages for city contractors, more union mandates, expanded public child care, less choice in education, etc.—would impose new burdens on both businesses and most residents, especially HENRY workers who are too rich to qualify for government benefits but too poor to simply shrug off higher costs.

Housing provides the most obvious example. Little chance that a HENRY couple would qualify for new public housing or “affordable” units, either built by public-private initiatives or required to be set aside for low- and middle-income workers. (As an aside, various estimates show that requiring union labor for new “affordable” housing in NYC would raise construction costs by 30 percent or more, with some Manhattan units costing upward of $1 million each! Hence, the snarky scare-quotes.)

Any expansion of rent control, meanwhile, will surely harm more New Yorkers than it helps. As we’ve discussed, the evidence on rent control is overwhelming and unambiguous: It helps a handful of local renters but reduces housing supply, decreases maintenance, distorts markets, and ultimately makes cities less comfortable and affordable for everyone else. Renters competing in New York’s unregulated market would face higher prices when, for example, frozen rents push already-struggling buildings into foreclosure. (The city’s Rent Guidelines Board data shows that 10 percent of rent-regulated buildings—totaling more than 64,000 units—are already operating at a loss.) The additional supply crunch would force HENRYs to bid against each other—and people with even deeper pockets—for whatever housing is left, pushing prices even higher.

New child care policies would likely cause similar problems. The average cost of private, center-based infant care in New York City already exceeds $25,000 annually, while less-regulated “family care” is still more than $20,000. Many New York families with two children often pay more for child care than rent! Mandating higher wages for child care workers while expanding access through new city-run centers will surely serve some people (though, research cautions, probably not well). Yet it’s bound to increase the cost of both public and private child care in the city, with HENRYs—reluctant to use public daycare or ineligible due to income limits driven by politics or the aforementioned fiscal realities—again on the losing end.

For starters, boosting wages for public child care workers would—along with mandatory benefits and union requirements for city-funded facilities—not only increase the costs of that care but likely pull workers and resources away from private facilities used by wealthier families who won’t qualify for public assistance. (And, as we’ve discussed, U.S. immigration restrictions will surely limit any replacements.) Throw in New York’s already high regulatory costs, and the annual private child care expense for HENRYs could easily exceed $30,000 per child once this “affordability” agenda is enacted.

Read more here.