Ken Griffin has never been shy about voting with his feet. When Illinois policy frustrated him, he didn't think twice about moving his hedge fund Citadel across the country to Florida.
Now, with New York City edging toward a new pied-à-terre tax and a mayor filming videos outside his $238 million Manhattan penthouse, the billionaire hedge fund founder is making clear that capital has options – and his patience is running thin.
"Mamdani is making it really clear: New York doesn't welcome success," Griffin said at the Milken Institute Global Conference in Beverly Hills last Tuesday, referring to Mayor Zohran Mamdani and his campaign to extract more revenue from the city's wealthiest property owners.
The comments reported by the Wall Street Journal and other outlets landed with particular force given Griffin's history: he relocated Citadel from Chicago to Miami in 2022, citing crime and what he described as hostile state policy.
New York City's proposed pied-à-terre tax – an annual levy on luxury properties valued above $5 million whose owners do not reside there full-time – is one of several such measures gaining traction across the country. 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 similar measures. Taken together, the trend reflects a growing political appetite for taxing second homeowners – a constituency that, in most cities, holds little electoral power where their properties are situated.
For financial advisors serving high-net-worth and ultra-high-net-worth clients, the wave of state and local tax initiatives is emerging as a meaningful planning issue. Clients who own second homes across multiple jurisdictions are watching their carrying costs climb, even as questions about residency, domicile, and the true definition of "primary" address become increasingly contentious.
Griffin's frustration is as much about political tone as fiscal policy. He called a video featuring Mamdani – which was filmed in front of the building containing his 24,000-square-foot penthouse and released on Tax Day – "creepy and weird" and raised concerns about the security implications of publicly spotlighting a private citizen's home address.
In a statement to the Journal, the mayor's office described the tax system as "fundamentally broken," one that "rewards extreme wealth while working people are pushed to the brink."
Mamdani, a Democratic socialist who pledged during his campaign to raise taxes on the city's millionaires and corporations, does not hold the authority to unilaterally enact those changes – that power rests with the governor and state legislature. But New York Gov. Kathy Hochul, who met reportedly met in private with Griffin last week, has recently signaled support for the pied-à-terre proposal as a mechanism for addressing the city's budget shortfall.
Griffin indicated that whether Citadel moves forward with a 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 has since told CNBC the firm will "probably" proceed. Vornado's chairman, Steve Roth, expressed confidence the deal would close: "Citadel has to be committed. They will be committed," he said on an earnings call the same day.
Analysts at Evercore ISI noted they remain optimistic about the development's progress.
Whether the fiscal signals move capital in any meaningful way is debatable. As reported by the Journal, research has found limited evidence that tax increases prompt wealthy individuals to relocate at scale. In Vancouver, a vacant-home tax introduced in 2017 did reduce vacancies significantly – falling below 1,000 by 2024 from over 2,500 – but the primary effect was that owners began renting properties rather than leaving the city. A 2020 study of a comparable French policy found a 13% decline in vacancy rates in targeted cities, with a similar rental-market shift as the dominant behavioral response.
Lu Han, a professor of real estate at the University of Wisconsin's business school, found that Vancouver's tax contributed to a lasting decline in rental prices by redirecting vacant stock into the rental market. Still, 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. As noted by the Journal, a not-insignificant number of Americans residing outside New York, Rhode Island, San Diego, and Montana who already pay thousands in taxes for properties there could owe even more, assuming proposed measures in those states pass. It's a dynamic 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.
New York City estimates its pied-à-terre tax could raise $500 million annually, a fraction of its roughly $120 billion budget. The revenue math is modest. The political symbolism, however, is not – and for Griffin, that symbolism carries a familiar sting.
"Looking at what Mamdani just did to me, and more broadly is doing to the City of New York, is triggering the trauma I went through in Chicago," Griffin said.
He has, in the meantime, revised Citadel's Miami tower plans to accommodate a larger office building – a 54-story structure already under construction. For advisors helping clients think through where to hold property and how to structure residency, the message from one of the most financially mobile individuals in the country will be hard to ignore.
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