Group pushing pied-à-terre tax among others for wealthy
By Sabina Mollot
On Monday, a coalition of 35 millionaire New Yorkers, including Abigail Disney and Morris Pearl, retired managing director at asset manager BlackRock, signed onto a letter asking Albany to tax them higher. The reason, they explained in their open letter, which was in the works even before the coronavirus, is to help meet the “urgent” budget needs the state is currently facing.
“If we want our state to continue being a national leader, we need to continue investing in our people and our communities, and that requires higher taxes for wealthy New Yorkers,” said Pearl. “There’s no reason that millionaire investors who have profited the most from our state’s success should have lower tax rates than regular New Yorkers who have to work for a living.”
Among the taxes they’d like to see include the proposed “pied-à-terre tax” on second and additional homes over $5 million, which is having a second go in Albany after being previously shot down. Other taxes the wealthy letter signers say they ought to be saddled with are what they’re calling a “strengthened millionaire’s tax,” with a new marginal rate of 9.62 percent on income over $1 million, and new income brackets starting at $5 million (10.32 percent marginal rate), $10 million (11.32 percent) and $100 million (11.82 percent). This tax, they said, would bring in roughly $4.5 billion per year. They’re also calling for a “modest” annual tax on net assets, applied to households with over $1 billion in assets.
Seven New York landlords have joined the Rent Stabilization Association (RSA) and Community Home Improvement Program (CHIP) to sue over new rent regulations they claim are ‟unconstitutional.”
The 125-page complaint, filed in the U.S. District Court, Eastern District of New York, names the city, the Rent Guidelines Board along with each of its members, and the state Homes and Community Renewal Commissioner RuthAnne Visnauskas as defendants.
“The main complaint is that, after 50 years of rent stabilization, it is clear that the system doesn’t work,” said the RSA’s general counsel, Mitch Posilkin.
“If the supposed housing emergency continues to exist, maybe there’s something wrong with the system, and we believe the system violates the United States Constitution.”
State Senator Brad Hoylman discusses his legislation in Albany, which the Council is now actively supporting. (Pictured with Hoylman) Assembly Member Harvey Epstein, Council Member Mark Levine and Assembly Member Deborah Glick (Photo by Sabina Mollot)
By Sabina Mollot
A few weeks after an out-of-state hedge fund billionaire purchased a $238 million penthouse apartment on Central Park South, two City Council members have introduced a resolution in support of a pied-à-terre tax.
Currently, in New York, non-residents are not subject to state or city income taxes and do not pay New York sales tax while outside the state. The proposed tax, which would affect homes that cost over $5 million if they’re not the owners’ primary residences, isn’t new. It was first introduced in 2014 by State Senator Brad Hoylman and Assembly Member Deborah Glick. However, with Senate Democrats now in the majority in Albany, it has a better chance at getting passed this year than ever before.
The City Council resolution was essentially a show of support for the tax, made by Members Mark Levine and Margaret Chin. At a press conference in front of City Hall on Monday, Levine and other Manhattan lawmakers argued that such real estate investments by out-of-state and foreign buyers are keeping buildings dark while the city gets done out of badly needed revenue.
“It’s a surcharge on property tax, so we can capture taxes from people who don’t really live here,” added Glick, who was also at City Hall.
The bomb cyclone of 2018 is believed to be the reason for a dip in 311 calls about a lack of heat in 2019. (Photo by Maria Rocha-Buschel)
By Sabina Mollot
With temperatures over the weekend and stretching into Monday and Tuesday feeling absolutely bone-chilling, it may seem hard to believe that the amount of heat complaints made by New Yorkers this year is dwarfed by the number of similar calls made last year by the same time period. The reason is most likely that last year, there was the “bomb cyclone” causing heat-related 311 calls to spike.
RentHop, an apartment listings service, has been conducting annual studies to determine which neighborhoods in New York have the most freezing renters based on the volume of 311 calls about lack of heat. What they have found, in comparing the 2019 data to 2018, is that it’s mostly the same neighborhoods each year with a direct correlation showing neighborhoods with rents lower than the city’s median (around $3,000 for a one-bedroom unit) producing more heat complaints.
The study also came up with a formula that “de-dupes” or ignores duplicate complaints (more than one from one address on the same day) as well as a formula that “normalizes,” taking into account that some neighborhoods are bigger than others by calculating unique complaints per 1,000 rental units. The study also looked at the average asking rents of one-bedroom apartment listings in 2018.
This year’s worst neighborhood was the same as last year’s, Erasmus in Brooklyn with 86.5 normalized complaints, down from 117.5 last year or 1,081 actual complaints this year vs. 670 when de-duped. Median rent for a one-bedroom is $2,140.
LLC involvement has been increasing in residential real estate purchases in the last 15 years, a new study has found. RealtyHop, a sister site of rental listings website RentHop, looked at data from 2004 to 2018 in four of the five boroughs, as well as co-op versus condo purchases.
One of the key findings of the study was that LLC (limited liability corporation) involvement increased to nearly 14 percent of transactions and accounts for almost 25 percent of the value of residential real estate purchases in that time frame.
The data science team combed through records on ACRIS (Automated City Register Information System), information made public by the city government, to examine how the use of LLCs has changed over time. Staten Island was not included in the study because data for the borough is not published on ACRIS.
State Senator Brad Hoylman and Assembly Member Harvey Epstein at a rally on Sunday, held in front of a Jared Kushner-owned property on East 12th Street (Photo by Maria Rocha-Buschel)
By Maria Rocha-Buschel
State Senator Brad Hoylman and Assembly Member Harvey Epstein hosted a rally in the East Village on Sunday to slam local predatory landlords and to announce a bill calling for more transparency in real estate lending.
The rally was held in front of a building owned by presidential son-in-law and accused slumlord Jared Kushner, Westminster City Living at 504 East 12th Street.
At the event, the elected officials announced the joint legislation that will direct the New York State Department of Financial Services to collect data on financial institutions lending to landlords acquiring property that include rent-stabilized tenants and investigate the role financial institutions play in encouraging anti-tenant practices.
The legislation argues that predatory equity has destabilized rent regulation and the affordable housing market in the city. The practice of predatory equity involves landlords acquiring rent-regulated properties with low to moderate-income tenants through highly speculative loans and then attempting to harass those tenants out to replace them with those who’ll pay market rent.
In Long Island City, with a $3,300 two-bedroom apartment median rent and a median household income of $28,378, tenants pay 139.54 percent of their incomes on rent. (Photo by King of Hearts/via RentHop.com)
By Sabina Mollot
In news that is certain to surprise absolutely no one, New York City fared the worst when compared to four other major cities in a study looking to determine which cities have the fewest neighborhoods with affordable two-bedroom apartments.
Additionally, in New York City, the neighborhoods with the highest low income to high rent ratio were the Lower East Side, Williamsburg and Long Island City.
Upper East Side-Carnegie Hill was actually the most affordable to the neighborhood’s own residents with an average household income of $155,213 and average two-bedroom rent of $3,555. The median income for all of NYC is $55,752 with a 2.4 person household.
The study was conducted by RentHop, an online apartment listings directory.
A protest for stronger rent laws spanned three days outside the governor’s midtown office. (Photos by Maria Rocha-Buschel)
By Maria Rocha-Buschel
Tenant activists, including some who are homeless, gathered in front of Governor Andrew Cuomo’s midtown office for three days last week from Wednesday evening to Saturday to demand rent reform in Albany.
A coalition of tenant groups organized the efforts, including New York Communities for Change, Tenant Power NY, Community Voices Heard and others. The groups dubbed the temporary encampment on the sidewalk “Cuomoville,” and linked the governor’s failure to enact stronger rent laws with the increase in homelessness throughout the city.
Gigi Morgan, an activist from Brooklyn who currently lives in a women’s shelter in Harlem, was at the protest on Friday morning after having slept there Thursday night and participating on Wednesday and Thursday.
Various empty storefronts in State Senator Brad Hoylman’s District, the subject of his recent study, “Bleaker on Bleecker” (Photo collage courtesy of Brad Hoylman)
By Sabina Mollot
State Senator Brad Hoylman, whose district includes Stuyvesant Town, Gramercy, Chelsea and Greenwich Village, recently conducted a study that found a high percentage of vacant storefronts in the district, with some retail corridors about 10 percent vacant and on Bleecker Street, a vacancy rate of 18.4 percent.
This is no breaking news to area residents of course; but the senator’s study “Bleaker on Bleecker,” which focuses on what’s been dubbed “high rent blight,” has led to his offering a few proposals to combat the problem.
In particular, the phenomenon of landlords of choosing to keep a space vacant “suggests waiting for Marc Jacobs instead of renting to Jane Jacobs,” the study quotes economist Tim Wu as saying.
The study also mentions the closure last year of the Chelsea Associated Supermarket, which had seen its $32,000 rent jump by $100,000. The now-shuttered store had the same owners as the Associated in Stuyvesant Town, the future of which is still murky.
The P.C. Richard & Son store on East 14th Street where the Tech Hub is proposed
Three of the candidates running to replace term-limited Councilwoman Rosie Mendez in District 2 have all pledged their support for rezoning the area around the proposed “Tech Hub” on East 14th Street. The candidates committed their support at a candidate night hosted by historic preservation groups at the Third Street Music School on Monday night.
Nearly 100 concerned residents packed a recital hall in the East 11th Street building while District 2 candidates, as well as candidates running against incumbent Margaret Chin in District 1, fielded questions about their commitment to historic preservation in the neighborhood.
Candidates Erin Hussein, Carlina Rivera and Mary Silver, all Democrats, were all in attendance for the event, although Jasmine Sanchez and Ronnie Cho, who are also running for the seat, were unable to make it.
Stuyvesant Town’s Associated Supermarket (Photo by Sabina Mollot)
By Sabina Mollot
Last week, following an op-ed being published in the newspaper The Villager in support of the Small Business Jobs and Survival Act, many Stuyvesant Town residents became alarmed after reading a sentence that mentioned the owner of the complex’s Associated supermarket was told he would not get a lease renewal.
Town & Village since reached out to Blackstone, and a spokesperson for the landlord, Paula Chirhart, said a final decision on whether to renew or not has not yet been made. Joseph Falzon, a co-owner of The Associated, confirmed this when we called although he added he wasn’t feeling confident that he’d get a renewal. He added that he was “99 percent sure” he wouldn’t.
Tenant activists gather outside an event held by the Real Estate Board of New York. (Photo courtesy of Faith in New York)
By Sabina Mollot
A group of tenant activists, dressed in black, disrupted a real estate industry luncheon in midtown last Wednesday to mourn the loss of affordable housing in the city. One of the groups organizing the effort was Faith in New York along with Tenants and Neighbors, the latter of whom have a tradition of protesting at events held by the Real Estate Board of New York.
“REBNY has led the charge for pro-gentrification and pro-displacement policies across New York for decades,” Katie Goldstein, executive director of Tenants & Neighbors later said in a written statement. “We are here standing with faith leaders and tenants across New York to mourn the death of affordable housing as we actively organize against REBNY’s policies and practices.”
The owners of the former Peter Stuyvesant Post Office, who’d proposed a 12-story residential building for the site, have since changed their request, by proposing a smaller, nine-story building instead. In January the owners, Benenson Capital Partners, partnering with Mack Real Estate Group, had gone to the Board of Standards and Appeals to request a zoning variance they’d need to build 12 stories since current zoning only allows for an eight-story structure. Their plan however was fought by community residents as well as the Greenwich Village Society for Historic Preservation.
The owners’ most recent proposal, which would boost height 14.5 feet higher than what is currently allowable, has also already been blasted by the preservation group. The GVSHP has argued that a building that high is out of context for the East Village and has also claimed that the owners’ main reason for wanting the variance — higher than expected construction costs due to underground water and soil conditions — doesn’t constitute a unique hardship.
Following the announcement that the Stuyvesant Town lottery would be reopening for would-be residents in the upper income tier, Town & Village asked a few market rate residents and former residents as well as others for their thoughts. The market raters we spoke with seemed to think that while the rents weren’t exactly cheap, the lottery was still welcome news. However, those unaccustomed to paying those kinds of rents were wary of labeling the available units as affordable.
After hearing what the rents were for one and two-bedrooms, Larry Watson, a former Stuy Town resident who moved out last year, said he thought the deal sounded better for the two-bedrooms.
He’d previously paid $3,900 for a converted two-bedroom.
“If you look at the price for a studio anywhere in Manhattan, it’s $2,000,” said Watson, “so it’s an $800 leap for a one-bedroom, but for a two-bedroom it’s an extra $1,300. So you get the value in a two-bedroom, but not a one-bedroom. I’d say it’s a decent offer,” he said.
Commissioners of the Board of Standards and Appeals, including (from left to right) Chair Margery Perlmutter, Susan Hinkson and Eileen Montanez (Photo by Maria Rocha-Buschel)
By Maria Rocha-Buschel
The Board of Standards and Appeals accused developers of getting ahead of themselves in a rush to get a new apartment building started before the deadline for a lucrative tax break in the project at the old Peter Stuyvesant Post Office on East 14th Street between First Avenue and Avenue A.
BSA chair Margery Perlmutter said in a hearing this past Tuesday that Benenson Capital Partners and Mack Real Estate Group (MREG) “went ahead and, at enormous expense, installed foundation slabs even though their project wasn’t necessarily viable.”
The developers’ attorney John Egnatios-Beene, of Stroock & Stroock & Lavan, argued at the hearing that the extra cost for building out the foundation was partially due to the construction of a full basement and the difficulties that resulted in building it due to the ground conditions. This rationale was given in addition to the developer’s previous argument that additional apartments were needed to make the project economically viable due to apartments that would be rented below market rate because of the building’s participation in the 421a affordable housing program.