New York’s Businesses Won’t Thrive If Their Employees Can’t Afford to Live Here

The median rent in New York City hit nearly $3,400 in the first quarter of 2025—a 5.6% increase from a year prior. (Spencer Platt/Getty Images)

About the author: Yasser Salem is the chair of OneNYC, an independent expenditure committee formed by business leaders, policy-makers, and former government officials who support policies that make living and doing business in New York more affordable.

Business owners and leaders in New York City face a stark reality: More than half of their workers can’t afford to live here and are rent-burdened, meaning they spend more than a third of their income on housing.

Other numbers tell a dire story. Washington Heights, once one of Manhattan’s last affordable refuges for working families, lost 48% of residents under 18 and 14% of all residents between 2000 and 2020. More broadly, half a million New Yorkers left the city in the last five years—not because of tax rates, but because they can’t afford to stay.

Businesses in the city are already paying the price of this affordability crisis. They have to compete not just with other businesses, but with the cost of living itself. Many provide meals, housing stipends, and premium compensation packages to attract talent. When I ran an urgent care company, I helped a number of employees who were about to be evicted due to rent increases. I felt that made a positive difference in my employees’ lives, and for my business. But company-led fixes like that won’t solve the current crisis.

This is where Democratic mayoral candidate Zohran Mamdani represents a paradigm shift. His tax policy isn’t about redistribution—it is about strategic investment in the city’s competitive infrastructure. By asking the wealthiest individuals and largest corporations to contribute more, we aren’t just funding programs. We are building the foundation for sustained economic growth.

Every business leader knows that talent is our most valuable asset. Mamdani’s comprehensive affordability agenda—universal childcare, fare-free buses, and expanded affordable housing—directly addresses the barriers that prevent top talent from choosing to live in the city. When we make the city livable for middle-class professionals, teachers, healthcare workers, and service industry employees, we create a diverse ecosystem that drives innovation.

The data supports this thesis. Research shows that every $1 million spent on affordable housing generates $1.89 million in local economic activity and creates 11 new jobs. American businesses lose an estimated $12.7 billion annually because of their employees’ child care challenges, according to a Center for American Progress report. Universal childcare doesn’t just help families—it unleashes productivity by ensuring parents can fully engage in their careers.

Fare-free transit reduces the effective cost of employment across all income levels, expanding the talent pool. In cities that have experimented with free transit, such as Kansas City, 82% of surveyed riders said that it allowed them to get or keep a job.

Critics warn of wealth flight. But evidence points to the contrary. According to the Fiscal Policy Institute, high earners leave New York state at one-quarter the rate of the general population during typical years, including years of substantial tax hikes like 2017 and 2021. High earners don’t significantly alter migration patterns in response to tax increases. In fact, they often relocate to other high-tax states—especially Connecticut, New Jersey, and California—not low-tax havens.

Former Mayor Michael Bloomberg, who was probably the city’s most popular, pro-business leader in recent history, sharply raised property taxes by 18.5% in 2002 to reverse the city’s fiscal decline and avoid harsh budget cuts. Experts say there was no exodus of high income earners in response to that tax hike.

On the ground today, New York business leaders aren’t as up in arms over Mamdani’s proposals as some say. CEOs have told me that policies to make living here more affordable aren’t handouts, but critical investments in attracting and keeping the talented workers needed to fuel growth.

This isn’t ideological—it is practical. Cities that prioritize affordability attract diverse talent pools, foster innovation, and create the civic optimism that supports lasting investment. New York City built its reputation as a global capital by being accessible to ambitious people from everywhere. We risk losing that edge if only the ultra-wealthy can afford to live in our city.

These investments will reduce our long-term costs while expanding our competitive advantages, making New York once again a magnet for talent at every level. Universal childcare means our employees can focus on work, not scrambling for daycare. Affordable housing means we can recruit from a national talent pool without offering relocation premiums. Fare-free buses mean our workforce can live throughout the city’s five boroughs, not just in proximal but expensive Manhattan neighborhoods.

Companies won’t need to subsidize basic living costs for employees. We can attract entrepreneurs who currently can’t afford to take the risk of starting a business here. We can retain the diverse workforce that made New York City a creative and economic powerhouse.

The question facing New Yorkers now isn’t how much it will cost to make the city more affordable but how much more it will cost if we kick the can down the road again. Our current approach of tax cutting for the wealthy while affordability spirals has failed spectacularly. Last year, 600,000 people applied for Section 8 housing vouchers when the waitlist reopened for the first time in 15 years.

Business leaders understand that the best investments often require upfront costs for long-term gains. Making New York City affordable isn’t just good policy—it is good business.

Guest commentaries like this one are written by authors outside the Barron’s newsroom. They reflect the perspective and opinions of the authors. Submit feedback and commentary pitches to ideas@barrons.com.