alt Hacker NewsI'm really curious about this. Wont, as a rule, any super-rich 2nd, 3rd, and 4th homes in New York be completely unaffordable for almost everyone? It feels a bit like you're potentially spreading around the super-luxury homes across a wider breadth of the super-rich, but not much else.
Is there a better way to think about this?
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Yes. A tax on the ultra-wealthy, rather than a measure aimed at increasing housing.
Its very roundabout as NYC can only make taxes for NYC, but the net aim is to increase the effective tax rate for the ultra-wealthy, using secondary property as a proxy for that.
Edit: AND WE (I) LIKE THIS because progressive taxation is the core play of fixing income/wealth inequality
Well it's two-pronged right? They either keep their extra houses and pay the tax, which increases tax revenue which can be used to fund things like constructing housing in NY, or they sell them off. The people potentially buying these houses will be more hesitant themselves to buy, so they're forced to lower the sell prices, making the houses more available to the general public.
I guess three-pronged, cause it says if they turn it into a rental that it's exempt from the taxes, which means someone is still at least living in it rather than just being used as a speculative asset.
For startets, the revenue raised makes NYC as a city more sustainable by funding social programs for the normal people who keep the lights on.
> Wont, as a rule, any super-rich 2nd, 3rd, and 4th homes in New York be completely unaffordable for almost everyone?
??
The point is to raise revenue.
In some sense, City is calling the bluff of these deeply immoral rich fucks; the tax is incredibly affordable for them, and almost all of them will simply complain and pay it, and thus generate revenue for the City.
This is really more about raising revenue for the city than increasing the housing supply.
It's for generating more tax revenue.
Economics always applies at the margins. If this means that no one can afford $500 million homes anymore, then builders will stop building them, and start building slightly cheaper homes. That will increase the supply of the slightly cheaper homes, so they will have to become cheaper, thus putting pressure on the even cheaper homes. Eventually, if other friction isn't too great (which is not given) the downward price pressure and increased supply should reach the regular person market.
If you can afford to pay $238 million for an apartment (the Ken Griffin example from the story) you can afford the annual $1.87 million in tax. That's about 0.785% tax rate.
By comparison, I have an investment property that's worth about $285k, and I pay 1.97% (about $5,800) on that in annual property tax, so esp. considering he's in Manhattan, that rate looks like a bargain.