Comment by cletus | Hacker News Reader

Comment by cletus | Hacker News Reader

There's a nuance here the article mentions in passing but missed the significance of (IMHO):

The ARV (assessed rental value) system that produces low effective tax rates for ultra-luxury condos is state legislation that predominantly impacts NYC. This is what makes reform so difficult. Most of NYS are SFH owners who simply don't pay their share of the property tax burden so resist any attempt to reform the system.

Here's what NYC needs:

1. Ultra-luxury condos need to pay a higher effective property tax rate than where normal people live;

2. SFHs and condos owned by corporations or those not tax resident in NYC need to pay a higher rate. NYC shouldn't be simply for billionaires parking money in a city they visit for 2 days a year;

3. No tax abatements (421a) for ultra-luxury properties. Why are we subsidizing this at all?

4. SFHs and condos of similar property value should pay a similar rate of tax.

Currently developers build ultra-luxury property because it's way more profitable than building affordable property. This needs to change.

I'm with you on removing tax incentives like that, but do not think requiring affordable housing is very useful.

I have a friend that lived in a rent controlled unit that did not have hot water for almost an entire year. Requiring 'affordable' units creates really strange incentives. New York should just fix the root cause: zoning.

Upzone the entire city or just remove zoning restrictions everywhere.

I don't know NYC rent control policies but my experience with it in Berkeley was excellent. I negotiated down (in 2010) to $945/mo. After 5 years of rent controlled increases I was still paying less than $1,050/mo. In the same time, the identical next door apartment (new tenant) rented for $2150. When I left, my unit was rented out for $2,500/mo. Professional management company, owner lived on other side of the country, old but everything worked and they always fixed anything that came up. I'm realizing now that you are talking about affordable housing while this was open market but wanted to comment on the power and usefulness of rent control.

It's very easy to support a policy that you benefit from. The property owner effectively missing out on 1,500 a month probably feels a little differently. People who have trouble finding affordable housing there, which may be exacerbated by rent control making being a landlord there less profitable and popular, may also feel differently.

I would support a policy that gave people with my surname $1,500 a month - but that doesn't mean it's a good policy.

> Currently developers build ultra-luxury property because it's way more profitable than building affordable property. This needs to change.

It's possible that developers build 'ultra-luxury' because building affordable property isn't profitable at all. Developing real estate in any major metro area in the US is insanely regulated and time-consuming.

What is the purpose of using rental income instead of comparable sales to set the market value for condos?

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