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Paying Top Dollar for Condos, and Leaving Them Empty
- michael_miller 14y agoGiven NYC's sky-high rent, I wonder what would happen to the real estate market if these apartments were occupied by full-time residents. It seems grossly inefficient to have an apartment sitting empty for that long, no matter how much money you have. I guess there aren't too many good options, since airbnb-style renting is probably a) illegal and b) frowned upon by the building. If I were these people, I'd just treat the apartment as an investment property and stay in a really nice hotel when I was in town.
- segmondy 14y agoIf you really where those people, it would be too much of a burden and hassle to have to deal with it as an investment property. They just don't want to deal with booking hotel rooms, the hassles. They can store whatever and know that it will remain untouched, they can fly into town and have an affair and leave, and best of all, it's prime real estate that figure will stay in high demand for the foreseeable future.
- fixedd 14y agoThe article says some of these people are doing it as a secure way to store money. Maybe not a classical investment, but not far off.
- gknoy 14y agoThat was my take-away as well. In addition to having a relatively stable investment (prime real estate in a popular city should hold value very well), you get to avoid the hassle of booking travel, and can manage your expectations about what you're getting. It's a more exclusive and more-personal place to visit or rest than a hotel, since it can have YOUR art, YOUR bathrobe, etc.
- zmanian 14y agoMy impression is that Bloomberg has consciously chosen the strategy of encouraging second home ownership in Manhattan as an attempt to decouple New Yorks service and consumer economy from the financial services sector. This trades off the progressive goals like affordable housing against providing a baseline of consumption activity to sustain NYC's tax base and its service workers.
- rdl 14y agoDo people not spending much time in NYC actually contribute much beyond property tax?
- zmanian 14y agoAn apartment in a condo in NYC will be about $100k+ per year in fees and taxes. Dozens of people will be employed in the management and maintenance of the building. I've also got the impression that consumption of various luxury goods and services in NY is highly coupled to bonus season in the financial sector. Millionaires from Kansas etc are likely to consume such services like Broadway, Bergdorfs etc year around because there are a lack of equivalent services back home.
- endtime 14y ago>An apartment in a condo in NYC will be about $100k+ per year in fees and taxes. [citation needed] Property tax in NYC is pretty low; this $3.35m condo in Tribeca is just over $20k/year in taxes and maintenance: http://streeteasy.com/nyc/sale/809162-condo-22-warren-street-tribeca-new-york http://streeteasy.com/nyc/sale/809162-condo-22-warren-street...
- zmanian 14y agoIt depends on the buildings amenities and staffing levels. You can find multimillion dollar properties with no staff but generally there is a dozenfull time staff members is a 100 hundred unit building
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- dfxm12 14y agoOthers, however, describe living in a deserted piggy bank as something else: lonely If you live in New York, even in an otherwise empty building, and feel lonely, you're doing it wrong.
- hkmurakami 14y agoDoesn't this happen to many professionals in NYC or elsewhere?
- pdog 14y agoActually, one of the ironies of living in a big city like New York is that even with all of the options, loneliness is more prevalent[1]. [1]: http://www.aeonmagazine.com/being-human/olivia-laing-me-lonely-in-manhattan/ http://www.aeonmagazine.com/being-human/olivia-laing-me-lone...
- speeder 14y agoI live in São Paulo (the whole metropolis has 30 million people) and I feel horribly lonely. Plainly because everyone is like visitors, I see thousands of people every day, and I don't know any of them, as I move around the city (I lived in 4 different places in the city over the years), I noticed that I never felt at home, it is like being a eternal stranger, a eternal visitor. When I lived in a 100k people town, I remember that I could realiably find the same people in the same places, for example I could go eat a hot dog at night in a park, and talk with the regular, build friendships, and so on. And yet, it was still strange... But São Paulo? Well, I could take the same route every single day, and don't see the same people twice. It is just horrible. I only don't feel depressingly lonely, because I made friendship with some people over internet, and every month we all meet on someone house.
- potatolicious 14y ago> "Well, I could take the same route every single day, and don't see the same people twice. It is just horrible." Have you tried to see them twice? Have you asked? Having lived in quite a few large metros in my life, and now living in NYC, I have to say: the city is as impersonal and isolating as you let it be. My challenge to you: forget every preconceived notion you have about strangers, how you're supposed to behave in public, and the how and the whys of friendship and hanging out - and go talk to some strangers. You'll get some weird looks, but your success rate will be 1-2 orders of magnitude higher than what you'd expect. I've seen this stance expressed on HN before and receive some flak - but I say fuck the naysayers. They can have solitude if they wish, but there is no crime in asking a stranger to shoot the shit over coffee, and anyone whose day would be ruined by such a request is oversensitive and paranoid to the point of absurdism.
- cletus 14y agoIt's worth noting that some ~85% of apartments in Manhattan are coop not condos where this often wouldn't happen. Developers like condos because they can sell to anyone. Buying in an established building means meeting whatever requirements the coop board sets. This can vary from the easy to the onerous. What side effect is that I would posit that coop owner-occupancy rates are much, much higher. Coop boards tend to have heavy restrictions on subletting too, which admittedly is more of an issue to lower income earners than the megawealthy (that seem to be the "culprits" for vacant luxury condos). Personally I'd find it eerie living in a large apartment tower and never seeing any other residents. Lonely is right.
- oijaf888 14y agoI live in a coop in Manhattan and I would guess at least 30% of the building doesn't live here full time or they are just holding on to the property until we surpass 2008 real estate values (from checking streeteasy and the previous sale price/ask price today). Also this isn't a super luxury place.
- segmondy 14y agoso? millionaires also pay tens of millions for private planes and it sits in the hanger most of the time!
- xradionut 14y agoNot the smart ones. They lease shares.
- aresant 14y ago"Then there is the $88 million crash pad at 15 Central Park West, bought last year by a trust linked to Ekaterina Rybolovleva, then 22 years old." Can somebody send me the AirBNB link to that one please?
- oijaf888 14y agoOr her okcupid profile... :)
- w1ntermute 14y agoEh: http://i.imgur.com/i8L0JUW.jpg http://i.imgur.com/i8L0JUW.jpg She looks much older than 22. Then again, with all that money, you'd never have to worry about finding funding for a startup again.
- elchief 14y agoAre there occupancy rules for insurance in the USA? I know there are in Canada and UK "Not living full-time in your home can invalidate your insurance" http://www.bbc.co.uk/news/business-19422609 http://www.bbc.co.uk/news/business-19422609
- abat 14y agoOne thing to note about the buildings in the article, is that they're all in fancy areas for shopping and tourists but not really places that long time residents want to live. I would be more interested in knowing the stats for luxury housing across the whole city.
- rayiner 14y agoWhat're you talking about? The examples are: Columbus Circle, 157 W. 57th street, 65th and lex. The last one is in the heart of the UES old money residential area, and the former two are right where the fancy central park view housing happens to be. You know those rich kids whose parents are paying for their apartment in Williamsburg? Those are the places where those parents live.
- bvcqw 14y agoThis is what happens when you treat houses as an asset class...
- pkaler 14y agoI live in a Vancouverism condo and about half the units on my floor are currently empty. http://en.wikipedia.org/wiki/Vancouverism http://en.wikipedia.org/wiki/Vancouverism These residents winter in Hong Kong, Phoenix, San Diego, etc. I don't really blame them. I'd rather spend the rainy months in a warmer climate, too. I would imagine that the case may be similar for New York. If you can afford a multi-million dollar place in New York, you can probably afford another multi-million dollar place in some other place, too.
- jcampbell1 14y agoNYC should decrease income taxes and increase property taxes. I don't mind out of towners buying expensive condo's, but they should help pay for the services that make New York great. Right now, because their income is all earned out of town and property taxes are very low, so they are not really supporting the city.
- robotic 14y agoBut they aren't really using the city services either.
- runT1ME 14y agoIf their vacant house catches on fire or someone ransacks it, will the police or firemen not intervene?
- fleitz 14y agoSeriously? Buildings with modern working sprinkler systems are rarely an issue for firefighters. As for break-ins the concierge rarely let roving bands of hooligans in to trash places / squat. Empty luxury condos are not the fire / squat hazard that abandoned warehouses, etc are. Nice try. It's pretty likely that someone would notice a squat in a luxury condo. As for city services the NYPD could probably greatly improve their budget by not unconstitutionally stopping and frisking people.
- afterburner 14y agoThe city costs money to run regardless, and the people buying crashpads there still want it to be the NYC they bought into when they end up sleep there.
- nitrogen 14y agoWhat is the probability that a condo in which no appliances are being used will catch fire?
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- stygianguest 14y agoThis was the reason to allow squats in Amsterdam. It was 'legal' to squat a building or appartment that had been empty for 12 months. Moreover, the burden of proof (for new plans with the building and/or use in the preceding 12 months) was on those seeking to evict. Now squatting is illegal again.
- mwsherman 14y agoSeems like it’s clearly money left on the table. Perhaps someone is rich enough that they don’t care, but that seems odd. Residences have something of a P/E ratio: market rent vs cost of the property. Perhaps the foregone rents are a drop in the ocean, but I don’t think so. If it’s a question of luxury – the desire to have one’s own place even if it lies fallow – well, someone would have to be very idle rich to allow that to happen. Certainly there are high-end brokers who could host parties, or special visitors, in such places.
- zobzu 14y agoI feel a little the same in SF. Maybe not at the same ratio, but still. Quite a few places are rented, but the people are rarely there. I always imagine they're just all very rich and have those places instead of hotels when they move from city to city. But really, i've no idea. Note they all seems to own the place, ie it's not a rent.
- contingencies 14y agoFor the record, empty real estate is the norm over here in China. The government dissuades capital exodus, a strategy which is also partly assisted by cultural and linguistic challenges. The result has been that many people have simply bought, developed, and sat on real estate right across the country, a huge proportion of which is empty. The really poor people (most people) cannot afford anything, and even if you do "buy", it's only a lease from the government for under a hundred years. In other words, even if real estate is perceived as a safe haven, in fact it's not. Nobody's comfortable. Everyone's constantly on edge. The older generation, despite opening their eyes to the world, cling desperately to their children as insurance against the coming winds of change. (And the 'typical' family structure: 4 grandparents, 2 parents, 1 child.)
- wallflower 14y ago"Waiting at a red light, I look up at the large glass windows that are the eyes of Park Avenue. From a population-density point of view, this is the Midwest of Manhattan. Towering above me are rooms - rooms and rooms and rooms. And they are empty. There are powder rooms and dressing rooms and piano rooms and guest rooms and, somewhere above me, but I won't say where, a rabbit named Arthur has sixteen feet square all to himself." -The Nanny Diaries: A Novel by Emma Mclaughlin, Nicola Kraus
- OGinparadise 14y ago“It is a safe haven,” and that's it, especially with Chinese, Russian or ME oil money. If you have $1++ bilion, you want to safely put away enough to live comfortably for the rest of your life, should government act up and taketh it. Maybe you are on a foreign trip, or you make it to the border, fake a passport or whatever, and then your property in NY or London awaits you. No need to work as a busboy or at a dry cleaning service. In US, rich people may buy land, bunkers, gold and silver coins. But USA is much more stable and property rights are relatively safe so we call them paranoid.
- malandrew 14y agoAnything that isn't a primary residence should be heavily taxed. There should be an onerous carrying cost associated with real estate in markets with limited available real estate.