One57 - an ultra-lux building where 2 penthouses recently sold for over $90m...each
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(The
following was an email sent out to members of the Georgist activist
group: Common Ground-NYC, and to select economic reformers and friends
who are not members).
Hello Common Groundlings (and many friends, some for the first time):
Can it be? Is Land Tax justice finally coming to NYC?
It
would be truly ironic if such a move would start at the top and
"trickle down" to lesser properties, but maybe that makes sense after
all, when some ultra-high end properties are paying as little as 1/100th
the property tax as properties selling for 1/100th the price.
The article lists just such an actual example:
With controversial tax breaks granted to the ($100 million) One57 condo tower, the total property tax bill for the spectacular penthouse is just $17,268, an effective rate of 0.017 percent of its sale price.
That's
right. A condo selling for a million dollars is actually carrying a
higher tax BILL, not just a higher RATE, than the recently sold most
expensive condo in the city, which sold for over $100 million ($100,471,452.77 to be exact)!
Here's today's Quiz:
Assume
you are a billionaire looking to buy the penthouse that just sold above
at One57. Now how high would you go if the property tax was
$1.7268m/year instead of just $17,268 (in other words, the tax was about
the same percentage of property value as the $1m condo)?
A. The same $100m
B. $75m
C. $50m
D. Less than any of the above.
Several
factors probably play into your decision, like how long you will retain
the apartment, i.e. how long you have to pay the property tax (which
will probably go up as time goes on too). One thing is for sure
though. A $100m Condo looks a lot less attractive when the property tax
is $1.7268m than when it is only $17,268. Another thing is for sure,
the city would benefit immensely from collection of a more appropriate
property tax.
A
new interactive map has just come out from the Municipal Art Society,
based on hundreds of hours of painstakingly combing through every
property in the 5 boroughs that uses the 421a tax abatement. It was
recently written up in the Gothamist (which is rapidly becoming one of
my favorite online dailies): http://gothamist.com/2015/03/12/map_luxury_apts_your_taxes.php. The now infamous One57 got a $35 million tax break AND
a 94% tax abatement going forward, and for that "developers will build
66 "affordable" units in the South Bronx" says the article.
You can explore the tradeoffs in the interactive map here:
None
of the buildings I looked at caused more than a few dozen "affordable"
housing units to be built as a result of 421a. I wasn't able to find
any that exceeded double digits, even for prime buildings where condos
were selling for high 8 figure amounts.
Many people are not content to look at maps though, and are taking to the streets - 80 of them here: "421-a paid for my bidet"
More
than 80 tenant advocates descended on New York's "Billionaires' Row"
Wednesday to protest against what they believe is an unfair tax break
for the wealthy.
And
an excellent article in The Gothamist
(click here)
explains all the intricacies of the 421-a law, and the proposals for
reform. This article in Crain's is more sympathetic to their base of
Real Estate developers, but even they can't predict what form the new
reforms will take: Real estate developers are wary of changes as expiration looms for popular tax break.
One
thing is clear to Georgists though. Nothing can be done to what's
basically a subsidy program for multimillionaires that will make it
equal in impact to a Land Value Tax.
For
those who are unfamiliar with Land Value Taxation, or Georgism, a
series of recently posted videos by veteran Georgist educator and CGNYC
member Mike Curtis can make it clear, to be found here: https://www.youtube.com/user/HGSOSS
(some videos from the 12-session Teacher's Training, which I also
attended, may not be up yet. My most recent presentation on Case
Studies in New York City Property Development may be found at this same
HGS Youtube page).
My Book -
I
am formally announcing the launch of my own book: "America is Not
Broke!" from Tayen Lane Publishing. The inside jacket blurb reads:
AMERICA IS NOT BROKE!The unsustainability of the American economy is as familiar as the newscycle. There is no money for social programs, no money to run the government, no money to cut taxes, and above all, we have to cut, cut, cut. But, what if it's not true?
Instead of familiar complaints about the national debt, leading to just slicing a shrinking economic pie differently, or worse, to Austerity Economics, the reality is that we already have all the wealth we could ever need. The tried and proven proposals in America Is Not Broke would guarantee America's prosperity, fairness, democracy, and economic and ecological sustainability. Four multi-trillion dollar reforms: Sovereign Money, Georgism, Public Banking, and Ending Government Financial Asset Hoarding, plus a few other major reforms, show how we can have it all, if we only learn where to look.
I have received endorsements from several people familiar to regular readers of this newsletter. Here are just a few:
Scott
Baker is that rare social activist, the holistic thinker who
scrutinises all the structural pillars that support the social system.
He identifies the points of stress that require urgent remedial action. This volume deepens the debate among the millions of reformers who currently punch below their weight because they isolate themselves in single-issue campaigns. Most significantly, this volume integrates the land-rent and money-creation issues to signpost the policies that really would transform society for the common good.
--Fred Harrison, Research Director of the London-based Land Research Trust, Author, Reporter
He identifies the points of stress that require urgent remedial action. This volume deepens the debate among the millions of reformers who currently punch below their weight because they isolate themselves in single-issue campaigns. Most significantly, this volume integrates the land-rent and money-creation issues to signpost the policies that really would transform society for the common good.
--Fred Harrison, Research Director of the London-based Land Research Trust, Author, Reporter
America
Is Not Broke! Four Multi-Trillion Dollar Paths To A Thriving America
will take its well deserved place in the literature of an America
resurgent, an America in which the vast common wealth of the American
people is put to work to take back our stolen economy, politics and
future from the parasites in pinstripes."
--Mike Krauss is the founder and chair of the Pennsylvania Project
--Mike Krauss is the founder and chair of the Pennsylvania Project
Scott Baker, a reliable and powerful supporter of the public banking movement, has now taken his writing and activism to the
next level in writing America Is Not Broke! This book dispels the myths about public banking and our monetary system in general. It is welcome outside-the-box thinking and I heartily endorse it.
--Ellen Brown, Founder, Public Banking Institute, Author of Web of Debt and The Public Bank Solution
next level in writing America Is Not Broke! This book dispels the myths about public banking and our monetary system in general. It is welcome outside-the-box thinking and I heartily endorse it.
--Ellen Brown, Founder, Public Banking Institute, Author of Web of Debt and The Public Bank Solution
The book is available from the Tayen Lane site: https://tayen-lane.squarespace.com/america-is-not-broke and on Amazon: http://amzn.to/1MCxYA2. It is currently only available in hardcover, but the paperback and ebook should be available in a couple of months.
I
and two members of the Public Banking Institute, Walt McRee and Joan
Bartl, gave a presentation/panel discussion at Goshen, NY, last
December, and, thanks to the original footage from Occupy's alt.banking
group member Manny Manhattan, that video is now up on Youtube (it
actually takes quite a bit of massaging from camera to final product,
but Adobe Premier Elements makes some of that easy). It is here, inside
an explanatory article on Opednews: OpEdNews Diary: Public Banking Presentation at Goshen, NY
Finally, on the 150th anniversary of president Lincoln's assassination (April 14), please consider signing this petition:
Until next time, Happy Landings....
Video Appearances & Slideshows here:
http://newthinking.blogspot.com/
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