Hill‑Lewis and Mamdani: Squeezing the Middle Class

Comparing how two ‘cities of hope’ balance ambitious budgets on the backs of a stretched middle class.

In living rooms across Cape Town, one line item on the monthly budget keeps rising faster than almost anything else: the municipal bill. For many homeowners who bought years ago, when their neighbourhoods were still ordinary, today’s rates and fixed charges feel less like a service fee and more like a slow eviction notice.

This is not just a Cape Town story. Across the Atlantic, in New York City, a self-described socialist mayor is relying on the same tool: higher property taxes that fall squarely on the middle class. Strip away the partisan branding, and a clear parallel emerges between Hill Lewis and Mamdani.

Cape Town under Geordin Hill‑Lewis

Cape Town’s system is explicitly redistributive. Property rates and fixed charges help fund services skewed towards poorer areas, with rebates for low-income households. On paper, this is a model of pro-poor budgeting. In practice, middle-class owners who do not qualify for rebates face an increasingly heavy burden that is becoming difficult to bear.

Over the past decade, middle-class homes in suburbs across the city have seen municipal bills rise far faster than either incomes or inflation. Across sampled homes, the property rate components alone increased by roughly 170 % while the underlying property values rose by about 131 %. When fixed charges are added, the combined rates and fixed portion rose by between 208 % and 494 %.

By contrast, average salary growth over the same period sits at around 55 %. In other words, municipal charges on typical middle-class properties have grown roughly four to five times faster than salaries.

Behind those percentages are familiar stories. A homeowner in Kalk Bay has begun renting out half of her inherited cottage to cover the bill. Others in gentrifying areas quietly discuss whether they can remain in long-held family homes.

The city’s 2025-2026 draft budget, with an approximate 7.96 % increase in the rates component against inflation of around 4.4 % and a fixed charge structure, has sparked organised backlash from residents and civic groups. Many describe it as a de facto wealth tax aimed at supposedly rich owners who, by income rather than assets, are firmly middle class.

The outcry intensified after the release of the 2025 General Valuation Roll in February. In response, Hill Lewis has announced mitigation efforts, including a proposed 10.2 % reduction in the residential rate in the rand. City officials stress that Cape Town still has the lowest metro rates in South Africa, and they point to a roughly R68 billion surplus as a buffer that helps limit increases and subsidise lower consumption tariffs.

Critics, including independent analysts, argue that this misses the point. Whatever the headline rate in the rand, the combined effect of sharply higher valuations, rising fixed charges and above-inflation increases is steadily eroding affordability for the middle class. It fuels talk of middle-class pressure, pushes some households to rent out portions of their homes, and contributes to a slow exodus from traditional suburbs to cheaper towns and provinces.

Cape Town’s fiscal model may be redistributive in intent, but in execution it leans heavily on a segment that is increasingly overstretched.

New York City under Zohran Mamdani

New York City’s property taxes are already among the highest effective rates in the United States, and they are a core revenue source for the city. In his preliminary FY2027 budget, released in February 2026 and totalling around $127 billion, Mayor Zohran Mamdani has proposed a 9.5 % across-the-board increase in property tax rates. His administration estimates this would raise roughly $3.7 billion.

The change would affect more than 3 million residential units and over 100,000 commercial properties. For a typical one to three family home, city estimates suggest an additional $700 to $750 a year in property taxes. The median homeowner affected has a household income of around $122,000, firmly within the working and middle-class band by New York standards.

Mamdani insists this is not his preferred route. He has repeatedly described the hike as a last resort and a more harmful path that he would only take if New York State Governor Kathy Hochul refuses to raise income taxes on earners above $1 million and on profitable corporations. He has been explicit that a broad property tax increase would place the burden on the backs of working and middle-class New Yorkers, and that he does not want to do so. Nevertheless, his preliminary budget assumes the increase will go ahead unless the state agrees to higher income and corporate taxes.

As of mid-March 2026, this remains a proposal, still subject to City Council negotiations. Even in draft form, it has drawn backlash from homeowners, renters who fear pass-through costs in the form of higher rents, and business groups, who warn that it could accelerate out-migration and worsen affordability. Some critics tie the move to Mamdani’s broader democratic-socialist agenda and accuse him of reneging on campaign promises to make the city more liveable.

From the vantage point of a middle-class homeowner in Queens or Brooklyn, the ideological packaging matters less than the practical result: another above-inflation increase in an already heavy property tax bill.

Same playbook, different politics

For readers in the Western Cape, New York might feel very far away. Yet the fiscal logic is uncomfortably familiar.

Both Cape Town and New York are high-property-value metros with ambitious spending plans and limited fiscal room. Both brand themselves, in different ways, as cities of hope that offer opportunity and a more liveable urban future. And in both, the same revenue lever keeps being pulled: property taxes that rise as neighbourhoods become more desirable, landing hardest on long-time owners whose incomes have not kept pace with paper valuations.

The similarities are striking.

• Both administrations manage budget pressures by leaning on property taxation, a mechanism that automatically scales with rising home values in sought-after areas.
• In both cases, the burden falls disproportionately on the working and middle classes — people with enough assets to be taxed but with incomes that do not stretch as far as the city’s spreadsheets assume.

For homeowners, the effects are familiar: bills that grow faster than wages; pressure to rent out rooms or parts of the house; reduced disposable income; and in some cases, quiet plans to relocate to cheaper suburbs, smaller towns or even other provinces and states.

The differences lie mostly in narrative and intent. Hill Lewis, governing from a social liberal DA perspective, embeds structural redistribution into the municipal rates system. The stated goal is targeted equity: using higher rates and charges in better-off areas to cross-subsidise services in poorer communities.

Mamdani, from a democratic-socialist vantage point, frames a generalised property tax increase as a reluctant fallback. His first preference is to raise income taxes on high earners and levy more from large, profitable corporations. If the state resists, the city, he argues, is forced back onto the one tax it controls directly: property.

In theory, these are very different political projects. In practice, the homeowner in Plumstead facing another above-inflation increase in rates and fixed charges has something in common with the homeowner in Queens staring at a 9.5 % property tax hike: whatever the ideology in City Hall, the middle is paying the most visible price.

There is an additional irony for readers in the Western Cape. Mamdani spent part of his childhood in Cape Town. Yet both he and Hill Lewis now rely on the same fiscal tool, passing higher costs onto homeowners.

What this means for Cape Town’s future

For a Western Cape audience, the lesson from New York is not that all mayors are the same. It is that political brands often converge on a single dependable source of revenue: the property-owning middle class.

That raises hard questions for Cape Town. How far can municipal bills outpace income growth before traditional neighbourhoods begin to hollow out? What happens when professionals, small-business owners and retirees on fixed pensions decide that the city they helped build is no longer affordable? And can a city still call itself a city of hope if the price of staying in it keeps rising faster than the pay cheques of those in the middle?

If Cape Town wants to avoid New York style tensions, it will need to confront these questions directly. That means more than pointing to low comparative rates or a healthy surplus. It requires an honest debate about who is being asked to shoulder the costs of an ambitious, redistributive city, and whether the middle class, already squeezed, can continue to carry so much of the load.