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.
Decreasing the number of secondary homes for the wealthy _does not_ create more first homes people can realistically afford though.
It’s a tax on second homes. If a single person sells due to the tax and someone who had 0 homes previously, it’s spread the scarce housing stock.
Not to say we shouldn’t build more but acting like a tax on multiple homes is going to make houses less available to everyone is ludicrous.
The per-apartment cost of construction in Manhattan is more than the retail price of my 3500sq ft house in near-rural South Carolina.
He is economically illiterate.
Edit: scratch that, he also mentioned leaving a rent controlled apartment because of a crabs in a bucket mentality. I think he’s lying to push his own political agenda which appears to be that of the rich never paying taxes.
I’ll lol if he’s some pleb like most of us and is just running defense for his “betters”
You can be in that cohort and not necessarily be the 1%, 0.1%, etc but you are not the middle.
Ideally no second home tax would be implemented, and we could treat housing as an export. But due to intense local planning constraints, housing is scarce.
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.
Would love to see some justification for this claim, which tacitly suggests that adding, say, 2M extra apartments over baseline would have zero effect on our housing market.
I call water safe, but you may say it's a tacit admission that you could drink 5 gallons in an hour an experience zero effects. I wouldn't call that an honest rebuttal
> I call water safe, but you may say it's a tacit admission that you could drink 5 gallons in an hour an experience zero effects. I wouldn't call that an honest rebuttal
I meant it as an honest rebuttal, and I largely disagree that your analogy applies.
Humans obviously die from hyponatremia if they drink massive amounts of water: in your example, 5 gallons of water, which is 5X-10X someone's daily consumption in a short period of time. OK, I agree.
I don't think the theoretical example of increasing the housing stock in NYC by 54% is likely to lead to serious negative effects, especially if it happens over a period of several years, because the city has astronomically high rents and even higher house prices [1]. I believe the culprit is primarily zoning and other restrictions on building, which I defended in another comment upthread.
I do think radically relaxing zoning laws and regulations could theoretically lead to such an increase in supply within a period of, say, ten years. It is politically infeasible and would require basically every voter to understand that supply and demand pricing works in the housing market, which they don't.
The reason I used that exact number—which was deliberately chosen to be large—is that I simply disagree with your claim, if I am understanding it correctly, and I felt a larger number would drive the point home more.
I interpreted your claim as: adding marginal units to the housing market in NYC will not change the price of housing, relative to the universe in which we do not add more units, because there is alway a marginal person waiting in the wings who would like to move to NYC but hasn't yet.
The thing is, what is actually preventing that marginal person from moving here? There is some vacancy here in NYC, even if it's low at 1.4%. Just adding one more unit with no change in price anywhere should not affect anything. In order for that person to actually go from "I am staying where I am" to "I am moving to NYC," the thing that has to change is the value of that apartment: it must breach the threshold at which point they'd move to NYC. I claim this predominantly happens through increased supply driving down price for a given unit compared to the universe where supply is held constant, which happens with basically any additional housing (via the filtering effect). If the increased supply held rents steady, there is no reason for that in-migration. This is the underlying mechanism by which all supply and demand works from my understanding; I don't see a reason why it should be different solely for housing in exactly one metropolitan area.
Obviously individual decision making for a given person is not this simplistic, but at a population level I think the desirability vs. price calculation holds and the increase in supply decreasing price holds, which is why metro areas that have built a lot (e.g. Tokyo, Austin, Nashville) have even seen falling housing prices, while NYC and SF see rising rents.
I picked a large number of units in my initial claim, but I basically do not think the logic changes for a small number of units either. Adding 100 units relative to baseline would nudge it down a smaller, but still meaningful amount.
[0] https://rentguidelinesboard.cityofnewyork.us/wp-content/uplo...
[1] https://www.apartments.com/rent-market-trends/new-york-ny/#:...
It's a complex market and this is definitely a risk.
Why would that be the case?