Why California couldn’t do a Mamdani-style pied-à-terre tax

The nation is abuzz with the most exciting kind of news: a local tax policy. 

New York City Mayor Zohran Mamdani and Gov. Kathy Hochul last week introduced a pied-à-terre tax on second homes valued over $5 million in the city. The proposal generated countless headlines, online discourse, and ire from the president, who wrote in a Truth Social post, “the TAX, TAX, TAX Policies are SO WRONG.” 

New York City is facing down a grim budget deficit and hopes this tax, which would levy an annual surcharge on one-to-three-family homes, condos, and co-ops when owners’ primary residence is outside the city, can generate hundreds of millions in annual revenue. The city is a major wealth center with many luxury penthouses and vacation homes. And it has a history of producing bold progressive policy ideas. Sound familiar?

In the wake of Mamdani’s announcement, some have wondered whether California might implement a similar tax. The answer is: probably not. Understanding why starts with San Francisco.