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New York to tax luxury second homes in NYC

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Re: New York to tax luxury second homes in NYC

#31

Post by busterarm »

lovich wrote: post #27
busterarm wrote: post #22

Earlier quoted context omitted.

I'm familiar with the concept of crabs in a bucket, yes. That's why I left New York and abandoned my rent controlled apartment to do so.

Oh shit, I didn’t realize the billionaires who can have multiple homes in Manhattan are crabs in the same bucket as us. Luckily the law is much more egalatarian and bars the rich and poor alike from sleeping under bridges or stealing bread.

NYC only has 154 billionaires. The percentage of NYC's second homes owned by NYC billionaires is fractional (59,000 total units).

No, this will disproportionately negatively affect middle-class people and families and fuck them hard.

> I didn’t realize the billionaires ... are crabs in the same bucket as us.

All of us go to the same place in the end my dude. Life is too short and too hard to spend all your time living by comparisons. I'm sure the people you're worried about are just as miserable for other reasons.

Re: New York to tax luxury second homes in NYC

#32

Post by giantg2 »

jmclnx wrote: post #7

> an initiative to appease Mayor Zohran Mamdani and liberal voters Taxing the rich is not a Liberal thing, but the Rich is calling it that because they do not want to pay any taxes at all. He was elected because people are starting to feel real pain and seeing the ultra rich paying far less taxes then they are. If it was up to me, I would tax all the second homes above 5 million USD and add a Luxury Tax on all valuab…

"seeing the ultra rich paying far less taxes then they are."

Is this actually true? I thought looking at the aggregates that the top 10% pay something like 1/3rd of all income/cap gain taxes.

Re: New York to tax luxury second homes in NYC

#33

Post by jonfw »

tekla wrote: post #26

I dunno why anyone thinks this matters. https://comptroller.nyc.gov/reports/the-pied-a-terre-tax-and... "We find that, before adjusting for these factors, our choice of tax rates and brackets could raise almost exactly $500 million from a little over 11,200 properties. However, revenues could be reduced to between roughly $340 million and $380 million based on assumptions on exclusions for rented units and behavioral…

I think that this has the benefit of both raising a non trivial amount of money as well as reducing housing demand from the wealthy in a supply constrained market

Re: New York to tax luxury second homes in NYC

#34

Post by asdff »

nickv wrote: post #17
ch4s3 wrote: post #4

Earlier quoted context omitted.

It seems like a place like Manhattan might benefit from first up-zoning the low slung sections that are currently 4-8 stories. My point here is that I'd start with trying to build enough housing before spending political capital on marginal things that neither unlock supply nor generate much revenue.

You're right, when I think of a place that has an overabundance of 2 floor single family homes, I think of Manhattan.

It isn't that which is the issue. It is the fact greenwich village has been at the same height since even before Don Draper's time. You see, the suburban enclaves of long island and upstate and new jersey and the comparatively more built up areas of manhattan do have the exact same issue with regards to housing, and that is there is little room in the zoned capacity to legally add any more housing.

In 1961, NYC adopted a zoning plan that saw zoned capacity reduced by 80%. These sort of changes to zoning happened around the country in the 1960s and 70s in response to red lining being made illegal. If you can't prevent black people from living near you by law, maybe you could instead prevent anyone from living near you and guarantee a supply side crisis such that the wealthiest individuals in the economy are who can afford to be your neighbors, and in 1961 surely they won't be black. You should look up the median income differences between a white nycer and a black nycer today, it is shocking. Median household wealth for whites just within the scope of new york state, not even at city resolution, is nearly 15x higher (1).

Today, 80 years later, we have kept the racist-by-transitive-property laws on the books all over the country. And as such, cities remain highly segregated by both race and class. Civil right era in terms of housing was essentially a failure to achieve any change from this status quo.

1. https://comptroller.nyc.gov/reports/the-racial-wealth-gap-in...

Re: New York to tax luxury second homes in NYC

#35

Post by [deleted] »

ch4s3 wrote: post #4
mikeweiss wrote: post #2

Good! Second homes in any region with low inventory should be taxed...

It seems like a place like Manhattan might benefit from first up-zoning the low slung sections that are currently 4-8 stories. My point here is that I'd start with trying to build enough housing before spending political capital on marginal things that neither unlock supply nor generate much revenue.

[deleted]

Re: New York to tax luxury second homes in NYC

#37

Post by WarmWash »

busterarm wrote: post #5

I strongly doubt that this is going to have the effect that they want it to. It won't raise the taxes that they expect it to. It won't free up inventory. It will halt construction.

New York City rent exists at an equilibrium.

The draw for people to move there is so intense, that any draw downs in rent are met with upticks in immigration.

Adding housing stock in NYC is not like adding housing stock in Lawnsdale Ohio. Almost by definition you cannot out build the demand for housing.

Re: New York to tax luxury second homes in NYC

#38

Post by stavros »

JuniperMesos wrote: post #15
galleywest200 wrote: post #11

Earlier quoted context omitted.

Taxing second homes would halt construction? Plenty of people out there wish to own a first home, myself included.

How will that tax result in more houses existing?

It will result in fewer second homes existing, therefore more first homes.

Re: New York to tax luxury second homes in NYC

#39

Post by bryanlarsen »

giantg2 wrote: post #32
jmclnx wrote: post #7

> an initiative to appease Mayor Zohran Mamdani and liberal voters Taxing the rich is not a Liberal thing, but the Rich is calling it that because they do not want to pay any taxes at all. He was elected because people are starting to feel real pain and seeing the ultra rich paying far less taxes then they are. If it was up to me, I would tax all the second homes above 5 million USD and add a Luxury Tax on all valuab…

"seeing the ultra rich paying far less taxes then they are." Is this actually true? I thought looking at the aggregates that the top 10% pay something like 1/3rd of all income/cap gain taxes.

Top 10% is the upper middle class, not the ultra rich. A successful surgeon making $1M per year is paying well over 40% a year in taxes, while Bezos is paying 1%.

Re: New York to tax luxury second homes in NYC

#40

Post by bsimpson »

Reactionary taxes like this have a tendency to be ill-considered and have unintended side effects.

NY also has a 1% penalty on paying more than $1 million for housing, which was probably enacted to proletariat applause when $1 million was still considered a lot of money. Now it distorts the value of entry level housing in NYC, where you'll have a hard time finding anything more than a studio apartment for $1 million. High closing costs and similar distortions mean people tend to lose money on housing in NYC unless it's held for many years.

$5 million is expensive enough that this probably won't add much housing stock in the short term. Still, politicians never seem to think through the consequences of headline-grabbing tax policies.

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