7 ms·

Why NYC Rent Is So High (It’s Not Airbnb)

48 points by maratd 10y ago

PaulHoule 10y ago
The NYC Hotel industry also has an unusual alliance between the hoteliers and the unions. In places like San Francisco you regularly see strikes outside Hotels where people are chanting "Don't check in, check out!" In NYC business is good enough that the hoteliers (Republicans) and the unions (Democrats) agree to get along so politically the opposition to things like AirBNB is united.
- geebee 10y ago
  Interesting angle. Funding for prop F in SF (which would have placed tighter restrictions on airbnb) largely came from the hotel unions and affordable housing advocates, not the hoteliers themselves. http://www.businessinsider.com/airbnb-spends-8-million-against-prop-f-2015-9 http://www.businessinsider.com/airbnb-spends-8-million-again... I wonder if these are somehow connected, interesting to think about. It might also explain the huge gap in funding on the measure. It'd be interesting to see if this were the case for a similar measure in NYC.
  - spoonie 10y ago
    My rental agreement (in a 4-storey apartment building) in SF forbids me from subletting (without consent), or from having overnight guests for more than N days a year. Are most other rental agreements more lax or do many Airbnb hosts operate in violation of their contracts?
jack_quack 10y ago
Without reading the article, isn't the answer always supply and demand?
- keeganjw 10y ago
  Ha, you should've read the article.
- hx87 10y ago
  In this case, it's supply, demand, and tax (abatements).
- _rpd 10y ago
  Article blames high city taxes. I always thought it was that rent is price controlled, resulting in undersupply.
  - tsaoutourpants 10y ago
    This is certainly another issue. There are many reasons why NYC rent is so high. But >50% of your rent going to property taxes may be the #1 most significant.
- thegayngler 10y ago
  Reading is your friend. 56% of the income generated from renting in an old building goes to taxes. That's scary high.
  - toomuchtodo 10y ago
    Or, conversely, its better that the city is extracting those taxes for services instead of it being straight profit for landlords. Lowering taxes would not lower rent charged, it'd just be more money in the pocket of landlords.
    - deleted 10y ago
      [deleted]
    - lintiness 10y ago
      if taxes were lower, it's possible landlords would rent for less to make the same marginal dollar.
      - deleted 10y ago
        [deleted]
  - krschultz 10y ago
    In this case not reading was the correct call, since this article just made a bunch of people on HN less informed. I look forward to the echoes of this showing up in every future HN thread on housing prices. I should save the debunkers for future reference.
  - pg_is_a_butt 10y ago
    Logic is your friend. supply and demand regulate taxes the same way they regulate price. that's scary obvious.
pg_is_a_butt 10y ago
oooh.... all the ignorance of a "Is AirBNB the reason NYC Rent Is So High?" headline, now with more Asterisks!23$&*^%!% you're all idiots.
yolesaber 10y ago
> If you like the thrill of gunshots on your way to work, Chicago’s tax rate is 1.86%. For the record I live in NYC and there were gunshots Sunday morning a block from my house
- ghostly_s 10y ago
  And gun violence is quite rare in the great majority of neighborhoods middle-class people inhabit in Chicago. An ignorant pointless dig like this is not building much authorial credibility.
- tsaoutourpants 10y ago
  Author here. The murder rate in Chicago is about 3.5x that of NYC... https://en.wikipedia.org/wiki/List_of_United_States_cities_by_crime_rate_(2014) https://en.wikipedia.org/wiki/List_of_United_States_cities_b... Anyway, the point was not which city was safer, but that compared to virtually any major city in the U.S., New York's tax rates are several times higher.
  - ghostly_s 10y ago
    You're casually implying that the tradeoff for the more affordable rent in Chicago is a greater likelihood of being the victim of gun violence. While it is a major problem, that's not the nature of gun violence here. It is highly localized to communities below the poverty level. If you're willing to casually and irresponsibly reduce the Chicago gun violence issue to a flip claim like this, then I have little faith in your ability to faithfully summarize the taxation situation (which seems to be a correct deduction based on the holes everyone is pointing out here.)
mikeryan 10y ago
Note California Property Taxes are abnormally low due to Prop 13. More importantly there seems to be a disconnect on the rate here and the way assessesd taxable values get calculated here https://www1.nyc.gov/site/finance/taxes/property-calculating-your-annual-tax-blll.page https://www1.nyc.gov/site/finance/taxes/property-calculating... In general it looks like a standard Class 1 home gets an assessed value of 6% of market value, some classes end up at 45% market value. My quick read says anything higher then 3 stories would be at the 45% rate which seems like most of Manhattan living? According to that page a home with a value of $450,000 ends up with a tax of $4,705.88 which is about %1. That being said the calculation is complex and I don't completely grok it.
- bradleyjg 10y ago
  Class 1 properties (residential properties with 1-3 units) pay considerably lower rates than Class 2 properties (all other residential properties). Which doesn't make a whole lot of sense, because the poorest people in the city live in big apartment buildings and many of the wealthiest people in the city live in single family town homes. Of the wealthiest people that don't live in single family homes, many live in new construction trophy condos that have multi-decade tax abatements. Even when they come out of tax abatement status, the law requires fair market value for condo/co-op buildings to be calculated by finding a comparable rental building which is impossible for the high end of the market. Almost every aspect of the NYC property tax regime is regressive. We also have a progressive income tax and a regressive sales tax. I wonder whether or not the system as a whole is progressive or regressive.
  - vostok 10y ago
    > the poorest people in the city live in big apartment buildings The poorest people live in rent regulated or subsidized housing so this discussion is not relevant to their situation. > Which doesn't make a whole lot of sense, because the poorest people in the city live in big apartment buildings and many of the wealthiest people in the city live in single family town homes. My experience is that the wealthy in NY prefer apartment buildings to townhouses.
vostok 10y ago
> But in New York City, you owe the city between 10.6% and 20.0% of your property’s assessed value, every year. > Let’s put this in perspective. In the very residential and fairly affordable (for Manhattan) East Village, a pre war, 5-story, apartment building with 15 1-bedroom units and a storefront may have a market value of about $5M. “Assessed values” tend to be lower than actual market values (both in NYC and most other cities), so you might end up with an assessed value of half the actual value, or $2.5M. The author of this article is highly misinformed. The assessed value of a property is often well under 50% of the market value. I know someone who recently bought a place for just over $7.5m, but the assessed value is under $500k. This property does not have any abatements. The exact tax rules are somewhat complicated and involve the interaction between rules on assessment ratios, caps on assessed value increases, fair market value models, transitional assessed values, tax rates, abatements, and probably a few other things that I missed.
- clamprecht 10y ago
  Why don't they just assess it accurately and lower the tax rate to a normal amount, making it more transparent and predictable? It seems owners are at the mercy of the assessed value, which the city could crank up arbitrarily?
  - soreal 10y ago
    Well, the assessment in NYC, unlike other places is actually pretty predictable and transparent, but not simple. If you are Class 1, it is 6% of FMV If you are Class 2+ it is 45% of FMV https://www1.nyc.gov/site/finance/taxes/definitions-of-property-assessment-terms.page https://www1.nyc.gov/site/finance/taxes/definitions-of-prope...
    - bradleyjg 10y ago
      Except the FMV of condo and condominium units aren't actually fair market values. Instead they are based on a model designed to figure out what income the building would produce if it were a rental building. And that's before taking abatements into account. The system overall is not very transparent.
forrestthewoods 10y ago
"In the very residential and fairly affordable (for Manhattan) East Village, a pre-war, 5-story, apartment building with 15 1-bedroom units and a storefront may have a market value of about $5M. [...] You might end up with an assessed value of half the actual value, or $2.5M. That building would likely be subject to the Class 2 tax rate of 12.9%, meaning $322,500 in taxes every year. A typical apartment in these buildings may be $2,500 monthly, and a typical storefront may be $10,000 monthly, making annual rent revenue $570,000. In this scenario, 56.6% of your rent money goes to the city in taxes, and that’s in addition to the NYC income tax of up to 3.876%, NYS income tax of up to 8.82%, sales tax on everything you buy of 8.875%, and other hidden taxes like the MTA tax on every taxi ride you take." Holy shit. That's insane. That should be criminal.
- dionidium 10y ago
  Thankfully, none of those numbers match reality.
  - epistasis 10y ago
    Can you provide some numbers that do match reality? I'm really curious how this works out because the tax rates are an order of magnitude higher than elsewhere. Either the assessed values are an order of magnitude lower, or there's a tremendous amount of grift that leaves NYC public schools in poor conditions despite huge amounts of tax revenue.
    - dionidium 10y ago
      Incredibly, they may be closer to reality than I thought. All buildings with more than 3 units (Class 2) are assessed at 45% of market value. https://www1.nyc.gov/site/finance/taxes/property-determining-your-assessed-value.page https://www1.nyc.gov/site/finance/taxes/property-determining...
  - tsaoutourpants 10y ago
    Author here. The income tax rates reflect the highest brackets, so if you are not the 1%, you will be paying somewhat less. Regarding sales and property taxes, unfortunately the 99% is indeed paying those rates (with an exception if you live in a building with less than 3 units).
deleted 10y ago
[deleted]
JoelBennett 10y ago
So why are the taxes so high? I can understand that having a higher population density would require potentially more resources, but I wouldn't think that would be a linear relationship. For example, an apartment building with 15 people in it does require more in terms of water and sewage treatment, but it doesn't require a 15x increase in roads when compared to building just a single house.
- untilHellbanned 10y ago
  I base this on no knowledge other than basic facts about human pyschology: It's because they can.
krschultz 10y ago
This is some seriously lax research. Property tax rates in New York City are very complicated. If the phrase 'tax class' doesn't come into the article you can safely discard it as nonsense. http://newyorkyimby.com/2015/06/why-new-yorks-property-taxes-punish-mid-size-landlords-and-poor-renters.html http://newyorkyimby.com/2015/06/why-new-yorks-property-taxes... http://commongroundnyc.org/nicemess.htm http://commongroundnyc.org/nicemess.htm
- maratd 10y ago
  > If the phrase 'tax class' doesn't come into the article you can safely discard it as nonsense. Did you even read the article? Direct quote: "That building would likely be subject to the Class 2 tax rate" And the article even links directly to the class breakdowns on the government website.
  - krschultz 10y ago
    That was added after the negative reaction in HN & Reddit responses. The author was basically scrambling in real time to address the comments here. Not exactly a sign they are an expert on the matter. My comment was written before the article added that information and I stand by it.
    - maratd 10y ago
      > That was added after the negative reaction in HN & Reddit responses. It was there before I posted it to HN, although the author did modify the article after it was posted.
- tsaoutourpants 10y ago
  Author here. All buildings that are more than 3 units are tax class 2, which are taxed at 12.9% of assessed value, which is 45% of actual value, for an effective tax rate of 5.8%. Again, this is about 4x what other cities pay.
deleted 10y ago
[deleted]
deleted 10y ago
[deleted]
danohu 10y ago
Theoretically, this shouldn't affect rental prices. Demand is dictated by the number/wealth/desperation of people wanting to rent in NY. Supply is more-or-less constant (except for new-build, which is excluded from this). So this doesn't affect rental prices, just moves money from the landlord's pocket into the city government. Sounds like a good idea to me.
- bradleyjg 10y ago
  That might be true if they weren't distortionary. But because they are dramatically different for renters and owners they distort behavior and so would be expected to affect rental prices.
- tsaoutourpants 10y ago
  Author here. There is indeed a supply and demand equation here, because demand is not constant. Market forces would drop rents if taxes dropped.
tomweingarten 10y ago
This doesn't seem right to me. I own an apartment in a six story co-op in NYC and pay < 1% of the market value in property tax every year. Not sure where the discrepancy comes in though. According to this site, the effective property tax rate in NYC is much lower than listed in the article: https://smartasset.com/taxes/new-york-property-tax-calculator https://smartasset.com/taxes/new-york-property-tax-calculato... There are also a lot of tax credit programs that the article does not mention: https://www.tax.ny.gov/pit/property/exemption/index.htm https://www.tax.ny.gov/pit/property/exemption/index.htm My property is my primary residence, I don't rent it out, so maybe that explains the discrepancy? But I find it difficult to believe that if there is that much of a difference that landlords are making any profit at all, and I'm quite certain they're not doing it out of the kindness of their hearts :)
mikehines 10y ago
Have you been to San Francisco?
natrius 10y ago
Property taxes don't affect your rent by forcing your landlord to increase prices. Your landlord can only increase prices if someone is willing to pay that increased price. Property tax rates don't affect people's ability to pay rent. Property taxes do affect how profitable it is to build more homes. The higher the taxes, the fewer homes will be built. That's what leads to higher rent as demand increases. To avoid that effect, jurisdictions can try to tax just the value of the land rather than the value of the homes built. http://www.economist.com/blogs/economist-explains/2014/11/economist-explains-0 http://www.economist.com/blogs/economist-explains/2014/11/ec...
Finnucane 10y ago
Just for laughs, you can find information on any Class 2 building in New York City here: https://www1.nyc.gov/assets/finance/jump/property-data-maps/tc2map_mh0201.html https://www1.nyc.gov/assets/finance/jump/property-data-maps/... and then look up the tax bill for it here: http://www.propertyshark.com/mason/info/Property-Taxes/NY/New-York-City/#Search http://www.propertyshark.com/mason/info/Property-Taxes/NY/Ne... It doesn't take too much poking around to see that this guy has overstated his case. (P.S., though I would agree that generous abatements for the benefit of condos for wealthy investors is rather unfair)

48 points by maratd 10y ago

The NYC Hotel industry also has an unusual alliance between the hoteliers and the unions. In places like San Francisco you regularly see strikes outside Hotels where people are chanting "Don't check in, check out!" In NYC business is good enough that the hoteliers (Republicans) and the unions (Democrats) agree to get along so politically the opposition to things like AirBNB is united.

geebee 10y ago
Interesting angle. Funding for prop F in SF (which would have placed tighter restrictions on airbnb) largely came from the hotel unions and affordable housing advocates, not the hoteliers themselves. http://www.businessinsider.com/airbnb-spends-8-million-against-prop-f-2015-9 http://www.businessinsider.com/airbnb-spends-8-million-again... I wonder if these are somehow connected, interesting to think about. It might also explain the huge gap in funding on the measure. It'd be interesting to see if this were the case for a similar measure in NYC.
- spoonie 10y ago
  My rental agreement (in a 4-storey apartment building) in SF forbids me from subletting (without consent), or from having overnight guests for more than N days a year. Are most other rental agreements more lax or do many Airbnb hosts operate in violation of their contracts?

jack_quack 10y ago

Without reading the article, isn't the answer always supply and demand?

keeganjw 10y ago
Ha, you should've read the article.
hx87 10y ago
In this case, it's supply, demand, and tax (abatements).
_rpd 10y ago
Article blames high city taxes. I always thought it was that rent is price controlled, resulting in undersupply.
- tsaoutourpants 10y ago
  This is certainly another issue. There are many reasons why NYC rent is so high. But >50% of your rent going to property taxes may be the #1 most significant.
thegayngler 10y ago
Reading is your friend. 56% of the income generated from renting in an old building goes to taxes. That's scary high.
- toomuchtodo 10y ago
  Or, conversely, its better that the city is extracting those taxes for services instead of it being straight profit for landlords. Lowering taxes would not lower rent charged, it'd just be more money in the pocket of landlords.
  - deleted 10y ago
    [deleted]
  - lintiness 10y ago
    if taxes were lower, it's possible landlords would rent for less to make the same marginal dollar.
    - deleted 10y ago
      [deleted]
- krschultz 10y ago
  In this case not reading was the correct call, since this article just made a bunch of people on HN less informed. I look forward to the echoes of this showing up in every future HN thread on housing prices. I should save the debunkers for future reference.
- pg_is_a_butt 10y ago
  Logic is your friend. supply and demand regulate taxes the same way they regulate price. that's scary obvious.

pg_is_a_butt 10y ago

oooh.... all the ignorance of a "Is AirBNB the reason NYC Rent Is So High?" headline, now with more Asterisks!23$&*^%!% you're all idiots.

yolesaber 10y ago

> If you like the thrill of gunshots on your way to work, Chicago’s tax rate is 1.86%. For the record I live in NYC and there were gunshots Sunday morning a block from my house

ghostly_s 10y ago
And gun violence is quite rare in the great majority of neighborhoods middle-class people inhabit in Chicago. An ignorant pointless dig like this is not building much authorial credibility.
tsaoutourpants 10y ago
Author here. The murder rate in Chicago is about 3.5x that of NYC... https://en.wikipedia.org/wiki/List_of_United_States_cities_by_crime_rate_(2014) https://en.wikipedia.org/wiki/List_of_United_States_cities_b... Anyway, the point was not which city was safer, but that compared to virtually any major city in the U.S., New York's tax rates are several times higher.
- ghostly_s 10y ago
  You're casually implying that the tradeoff for the more affordable rent in Chicago is a greater likelihood of being the victim of gun violence. While it is a major problem, that's not the nature of gun violence here. It is highly localized to communities below the poverty level. If you're willing to casually and irresponsibly reduce the Chicago gun violence issue to a flip claim like this, then I have little faith in your ability to faithfully summarize the taxation situation (which seems to be a correct deduction based on the holes everyone is pointing out here.)

mikeryan 10y ago

Note California Property Taxes are abnormally low due to Prop 13. More importantly there seems to be a disconnect on the rate here and the way assessesd taxable values get calculated here https://www1.nyc.gov/site/finance/taxes/property-calculating-your-annual-tax-blll.page https://www1.nyc.gov/site/finance/taxes/property-calculating... In general it looks like a standard Class 1 home gets an assessed value of 6% of market value, some classes end up at 45% market value. My quick read says anything higher then 3 stories would be at the 45% rate which seems like most of Manhattan living? According to that page a home with a value of $450,000 ends up with a tax of $4,705.88 which is about %1. That being said the calculation is complex and I don't completely grok it.

bradleyjg 10y ago
Class 1 properties (residential properties with 1-3 units) pay considerably lower rates than Class 2 properties (all other residential properties). Which doesn't make a whole lot of sense, because the poorest people in the city live in big apartment buildings and many of the wealthiest people in the city live in single family town homes. Of the wealthiest people that don't live in single family homes, many live in new construction trophy condos that have multi-decade tax abatements. Even when they come out of tax abatement status, the law requires fair market value for condo/co-op buildings to be calculated by finding a comparable rental building which is impossible for the high end of the market. Almost every aspect of the NYC property tax regime is regressive. We also have a progressive income tax and a regressive sales tax. I wonder whether or not the system as a whole is progressive or regressive.
- vostok 10y ago
  > the poorest people in the city live in big apartment buildings The poorest people live in rent regulated or subsidized housing so this discussion is not relevant to their situation. > Which doesn't make a whole lot of sense, because the poorest people in the city live in big apartment buildings and many of the wealthiest people in the city live in single family town homes. My experience is that the wealthy in NY prefer apartment buildings to townhouses.

vostok 10y ago

> But in New York City, you owe the city between 10.6% and 20.0% of your property’s assessed value, every year. > Let’s put this in perspective. In the very residential and fairly affordable (for Manhattan) East Village, a pre war, 5-story, apartment building with 15 1-bedroom units and a storefront may have a market value of about $5M. “Assessed values” tend to be lower than actual market values (both in NYC and most other cities), so you might end up with an assessed value of half the actual value, or $2.5M. The author of this article is highly misinformed. The assessed value of a property is often well under 50% of the market value. I know someone who recently bought a place for just over $7.5m, but the assessed value is under $500k. This property does not have any abatements. The exact tax rules are somewhat complicated and involve the interaction between rules on assessment ratios, caps on assessed value increases, fair market value models, transitional assessed values, tax rates, abatements, and probably a few other things that I missed.

clamprecht 10y ago
Why don't they just assess it accurately and lower the tax rate to a normal amount, making it more transparent and predictable? It seems owners are at the mercy of the assessed value, which the city could crank up arbitrarily?
- soreal 10y ago
  Well, the assessment in NYC, unlike other places is actually pretty predictable and transparent, but not simple. If you are Class 1, it is 6% of FMV If you are Class 2+ it is 45% of FMV https://www1.nyc.gov/site/finance/taxes/definitions-of-property-assessment-terms.page https://www1.nyc.gov/site/finance/taxes/definitions-of-prope...
  - bradleyjg 10y ago
    Except the FMV of condo and condominium units aren't actually fair market values. Instead they are based on a model designed to figure out what income the building would produce if it were a rental building. And that's before taking abatements into account. The system overall is not very transparent.

forrestthewoods 10y ago

"In the very residential and fairly affordable (for Manhattan) East Village, a pre-war, 5-story, apartment building with 15 1-bedroom units and a storefront may have a market value of about $5M. [...] You might end up with an assessed value of half the actual value, or $2.5M. That building would likely be subject to the Class 2 tax rate of 12.9%, meaning $322,500 in taxes every year. A typical apartment in these buildings may be $2,500 monthly, and a typical storefront may be $10,000 monthly, making annual rent revenue $570,000. In this scenario, 56.6% of your rent money goes to the city in taxes, and that’s in addition to the NYC income tax of up to 3.876%, NYS income tax of up to 8.82%, sales tax on everything you buy of 8.875%, and other hidden taxes like the MTA tax on every taxi ride you take." Holy shit. That's insane. That should be criminal.

dionidium 10y ago
Thankfully, none of those numbers match reality.
- epistasis 10y ago
  Can you provide some numbers that do match reality? I'm really curious how this works out because the tax rates are an order of magnitude higher than elsewhere. Either the assessed values are an order of magnitude lower, or there's a tremendous amount of grift that leaves NYC public schools in poor conditions despite huge amounts of tax revenue.
  - dionidium 10y ago
    Incredibly, they may be closer to reality than I thought. All buildings with more than 3 units (Class 2) are assessed at 45% of market value. https://www1.nyc.gov/site/finance/taxes/property-determining-your-assessed-value.page https://www1.nyc.gov/site/finance/taxes/property-determining...
- tsaoutourpants 10y ago
  Author here. The income tax rates reflect the highest brackets, so if you are not the 1%, you will be paying somewhat less. Regarding sales and property taxes, unfortunately the 99% is indeed paying those rates (with an exception if you live in a building with less than 3 units).

deleted 10y ago

[deleted]

JoelBennett 10y ago

So why are the taxes so high? I can understand that having a higher population density would require potentially more resources, but I wouldn't think that would be a linear relationship. For example, an apartment building with 15 people in it does require more in terms of water and sewage treatment, but it doesn't require a 15x increase in roads when compared to building just a single house.

untilHellbanned 10y ago
I base this on no knowledge other than basic facts about human pyschology: It's because they can.

krschultz 10y ago

This is some seriously lax research. Property tax rates in New York City are very complicated. If the phrase 'tax class' doesn't come into the article you can safely discard it as nonsense. http://newyorkyimby.com/2015/06/why-new-yorks-property-taxes-punish-mid-size-landlords-and-poor-renters.html http://newyorkyimby.com/2015/06/why-new-yorks-property-taxes... http://commongroundnyc.org/nicemess.htm http://commongroundnyc.org/nicemess.htm

maratd 10y ago
> If the phrase 'tax class' doesn't come into the article you can safely discard it as nonsense. Did you even read the article? Direct quote: "That building would likely be subject to the Class 2 tax rate" And the article even links directly to the class breakdowns on the government website.
- krschultz 10y ago
  That was added after the negative reaction in HN & Reddit responses. The author was basically scrambling in real time to address the comments here. Not exactly a sign they are an expert on the matter. My comment was written before the article added that information and I stand by it.
  - maratd 10y ago
    > That was added after the negative reaction in HN & Reddit responses. It was there before I posted it to HN, although the author did modify the article after it was posted.
tsaoutourpants 10y ago
Author here. All buildings that are more than 3 units are tax class 2, which are taxed at 12.9% of assessed value, which is 45% of actual value, for an effective tax rate of 5.8%. Again, this is about 4x what other cities pay.

deleted 10y ago

[deleted]

deleted 10y ago

[deleted]

danohu 10y ago

Theoretically, this shouldn't affect rental prices. Demand is dictated by the number/wealth/desperation of people wanting to rent in NY. Supply is more-or-less constant (except for new-build, which is excluded from this). So this doesn't affect rental prices, just moves money from the landlord's pocket into the city government. Sounds like a good idea to me.

bradleyjg 10y ago
That might be true if they weren't distortionary. But because they are dramatically different for renters and owners they distort behavior and so would be expected to affect rental prices.
tsaoutourpants 10y ago
Author here. There is indeed a supply and demand equation here, because demand is not constant. Market forces would drop rents if taxes dropped.

tomweingarten 10y ago

This doesn't seem right to me. I own an apartment in a six story co-op in NYC and pay < 1% of the market value in property tax every year. Not sure where the discrepancy comes in though. According to this site, the effective property tax rate in NYC is much lower than listed in the article: https://smartasset.com/taxes/new-york-property-tax-calculator https://smartasset.com/taxes/new-york-property-tax-calculato... There are also a lot of tax credit programs that the article does not mention: https://www.tax.ny.gov/pit/property/exemption/index.htm https://www.tax.ny.gov/pit/property/exemption/index.htm My property is my primary residence, I don't rent it out, so maybe that explains the discrepancy? But I find it difficult to believe that if there is that much of a difference that landlords are making any profit at all, and I'm quite certain they're not doing it out of the kindness of their hearts :)

mikehines 10y ago

Have you been to San Francisco?

natrius 10y ago

Property taxes don't affect your rent by forcing your landlord to increase prices. Your landlord can only increase prices if someone is willing to pay that increased price. Property tax rates don't affect people's ability to pay rent. Property taxes do affect how profitable it is to build more homes. The higher the taxes, the fewer homes will be built. That's what leads to higher rent as demand increases. To avoid that effect, jurisdictions can try to tax just the value of the land rather than the value of the homes built. http://www.economist.com/blogs/economist-explains/2014/11/economist-explains-0 http://www.economist.com/blogs/economist-explains/2014/11/ec...

Finnucane 10y ago

Just for laughs, you can find information on any Class 2 building in New York City here: https://www1.nyc.gov/assets/finance/jump/property-data-maps/tc2map_mh0201.html https://www1.nyc.gov/assets/finance/jump/property-data-maps/... and then look up the tax bill for it here: http://www.propertyshark.com/mason/info/Property-Taxes/NY/New-York-City/#Search http://www.propertyshark.com/mason/info/Property-Taxes/NY/Ne... It doesn't take too much poking around to see that this guy has overstated his case. (P.S., though I would agree that generous abatements for the benefit of condos for wealthy investors is rather unfair)