Wednesday, May 11, 2016

The big picture: not enough affordable housing in NYC, and inequitable/inconsistent taxes

With all the focus on "affordable housing" and lotteries that will deliver results to a lucky few but leave many in the lurch, it's worth being reminded of the larger picture.

As Dana Rubinstein wrote in the 5/6/16 Politico, Weisbrod: NYC can’t solve housing affordability crisis on its own, Department of City Planning Commissioner Carl Weisbrod said the city needs 500,000 more affordable housing units.

That's more than six times more Mayor Bill de Blasio's plan would produce: his plan for 200,000 units to be created or preserved includes 80,000 new ones over ten years.

"I don’t actually believe that New York City can solve the affordability housing problem,” Weisbrod said, not unreasonably. “We can address it, we can improve it. But we’re not going to solve it unless there’s a broader regional approach and there’s more affordable housing, not just in the city but in the surrounding region."

Indeed, both the suburbs and smaller regional cities must do their part.

The tax problem

In the 5/8/16 Crain's New York Business, Greg David pointed out, in Disputed tax break should never have been necessary, that Housing Preservation and Development Commissioner Vicki Been defended a notorious tax break: “The reason we need 421-a is that rental housing is unfairly taxed.”

(He didn't mention how 421-a for years fueled luxury development in places that didn't need the tax break.)

According to the Independent Budget Office, David wrote, "the tax rate for rental buildings with elevators ranges from three to five times the rate for single-family homes, co-ops and condos."

He blames the system on a city effort to keep people from leaving for the suburbs, and the inequity has been entrenched for years, with elected officials unwilling to take on homeowners. Council Speaker Melissa Mark-Viverito acknowledged that "the council had little appetite to tackle the issue," in David's words.

Inconsistent taxation

As Jon Lentz wrote in City and State last year, "New York City is notorious for its outdated, inconsistent and mind-numbingly complex method of assessing property taxes, which some experts say could very well be the worst such system in the country."

In other words, de Blasio pays less taxes on his Park Slope home than does a homeowner in a less expensive home in a less chic part of Brooklyn.

Lentz wrote:
At first glance, then, property taxes would be a natural target for the mayor. The status quo benefits wealthier homeowners while hurting renters, who pay disproportionately more in taxes even though they typically have lower incomes. The neighborhoods where the cap saves homeowners the most money, at least in absolute dollars, are those with the highest incomes. Wealthy Manhattan has the lowest effective tax rate of any of the five boroughs.
But that didn't happen:
Wiley Norvell, a de Blasio spokesman, declined to comment for this story, saying in an email only that the questions posed byCity & State had been answered by the city’s Finance Department—even though a Finance Department spokeswoman had declined to comment.

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