Experts say New York mayor-elect Zohran Mamdani’s selection of Lina Khan, the former Federal Trade Commission (FTC) chair, for his transition team acts as a warning to private equity firms in the state that have raised rents and monopolised local healthcare industries.
Throughout the US, private equity has increasingly monopolised industries through the practice of “roll-ups”, acquiring many small local firms and rolling them into one larger firm, giving them power to simultaneously raise prices and lower quality. This practice is especially problematic in healthcare, where private equity involvement has been linked to worse health outcomes, including death.
Serving as FTC chair under Biden, Khan was among the first to aggressively go after this practice on the national level, said Martin Kenney, distinguished professor at the University of California, Davis. While Khan might have comparatively less power on a transition team for a city government, Kenney said her appointment is “a signal” to New York private equity firms and that younger Democrats like Mamdani are taking a new approach.
In New York City, private equity firms have been known to use aggressive tactics to get residents of rent-controlled buildings to leave so they can raise rents. Mamdani’s campaign centred around making rent more affordable; Kenney thinks that Khan’s appointment is most directed at private equity landlords.
Loren Adler, associate director at the Brookings Institution’s Center on Health Policy, agrees that Khan’s appointment is largely symbolic, given that “municipal power is only so strong”. However, he noted that while the mayor might not have power to stop acquisitions, “it’s pretty easy to force transparency at the municipal level”.
