I am assuming having rich people in your city is a good thing, but I genuinely think it is overall.
Yes, most cities cannot attract billionaires like New York. But London or Hong Kong can. And London has been much more successful at it than New York lately.
Fun fact: the states with the most billionaires per capita are... Oklahoma, Oregon, and Ohio. New York comes in at #4.
In residence, perhaps.
Yet how many own a pied-à-terre in New York, while residing primarily elsewhere?
According to the above link, Oklahoma has 5 billionaires, Oregon has 2, Ohio has 4. New York, at #4 per capita, has 88; California has 111. The "surprise" is mostly due to low counts.
For any process (like wealth) with large extremes, if you subdivide it into bins, you are going to get local extrema just due to low counts. The only mildly informative thing is Oklahoma (oil and gas). Ohio is a few elderly (ages 77, 74, 70) manufacturing folks -- their count seems to have dipped to 3, according to http://www.forbes.com/billionaires/list/#version:static_sear..., which would remove Ohio from the top 3 per capita.
They're willing to pay $100 million for apartments that'd probably go for a tenth or less of that in any other city. Let's not pretend having to pay a bit more tax is going to drive them to live in Tulsa. The prestige of living in NYC is the main draw, I'd imagine.
The article stated $17k tax on a $100M (market value) condo. Assuming the buyer pays in cash, the property retains its value, and ignoring the condo fees, that person is paying $1417 a month for the option of living in one of the most prestigious places in the world.
I'm not an expert on housing costs in NYC, but that seems like a pretty good deal.
If you asked me if I wanted to rent that place for $1417 I would absolutely say yes. But I don't happen to have $100M lying around.
When you can pay cash for everything, the budgetary math is more oriented around periodic cash flows. Taxes and insurance and depreciation become monthly accounting expenses that have to be paid from monthly incomes. The actual sale price of the place is almost irrelevant.
What if you had so much money that you have already bought everything you ever wanted? Keeping it all is now just a matter of keeping the monthly expenses below the monthly incomes.
Having money makes it easier to save money, even on a much smaller scale.
If you can pay cash for your commuter car, you pay $15000. If you get a 48-month loan at 5%, you pay 10.5% more total over those 4 years. That additional expense is not added to the resale price of the car.
If you can pay cash for your house, you pay $250000. If you get a 360-month loan at 5%, you pay 93% more total over those 30 years. That additional cost is not added to the value of the property.
Loan interest is an expense that is consumed. It does not return to you as equity in any asset. Rent and taxes are similar, in that the money you pay does not return to you as retained value. They are gone, in the same way that a cake that is eaten cannot be saved for later.
If you're rich, you can establish an accident liability escrow account instead of buying car driver's insurance. You can effectively self-insure with a risk pool of one person. The money in the escrow account still earns interest. Not only do the people who do that not pay premiums, which are lost, they can keep all their money, and even pay themselves a little extra, for not causing accidents. But if they have one, no big deal. They pay for the damage, then top up the escrow account. Their premiums do not increase.
All you need to save money is to be rich. So simple. Everyone should do it, right?
That's what the extreme frugality crowd does. If you drastically reduce your living expenses, you can save more rapidly, and begin to take advantage of the lowered expense opportunities available to people with lots of savings, such as the incredibly simple elimination of all loan interest payment expenses. And that allows you to save more.
And the calculations don't care about how much you earn. The only thing that matters is what proportion of your income you can save, and how much your savings can return in excess of inflation.
But you can't just become rich by doing the things that rich people do. They already have their rich people membership cards; their discounts are not yet available to you. You have to get rich first, then do those things to stay rich or become richer.