4 ms·

Wouldn't another city just adopt similar systems and over time start to attract billionaires? I'm sure that this effects their decision of where they purchase r

by jbhatab 11y ago

Wouldn't another city just adopt similar systems and over time start to attract billionaires? I'm sure that this effects their decision of where they purchase real estate. I am assuming having rich people in your city is a good thing, but I genuinely think it is overall.

ceejayoz 11y ago
> Wouldn't another city just adopt similar systems and over time start to attract billionaires? 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.
ubernostrum 11y ago
Remember that real estate is about three things: location, location, and location. You bribe your way into tax abatements for luxury condos basically anywhere, but there's currently no way to bribe someone to move Central Park, the museums and arts centers and all the restaurants and other New-York-specific stuff that actually attracts people to within a few blocks of your cheap-tax-rate tower in Wyoming.
- nostromo 11y ago
  You're not being fair to his or her question. 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.
  - warfangle 11y ago
    > 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?
  - mturmon 11y ago
    Hmm, your fun fact (http://en.wikipedia.org/wiki/List_of_U.S._states_by_the_number_of_billionaires http://en.wikipedia.org/wiki/List_of_U.S._states_by_the_numb...) is fun, I agree, but also misleading. 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_search:ohio http://www.forbes.com/billionaires/list/#version:static_sear..., which would remove Ohio from the top 3 per capita.
apalmer 11y ago
These are the richest of the richest people anywhere. They live where they want to live. A billionaire doesn't move his whole existence across the country to save 10 million dollars in taxes.
- logfromblammo 11y ago
  But they don't even need to do that, in this instance. 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.
  - darkstar999 11y ago
    That's flawed logic, as it's $100M + $1417/mo. 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.
    - logfromblammo 11y ago
      The wealth moves from $100M in cash to $100M in ultralux NYC condo. Absent some event that diminishes the value of ultralux NYC condos, the only real sacrifice is in liquidity. It's harder to spend a condo if you need to. 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.
      - s73v3r 11y ago
        You still have to have at least a decent amount of that $100MM in cash to start with.
infinotize 11y ago
Many (most?) of these people don't even live in these apartments. In fact, developers actually use this as an argument in favor of new construction - it won't put any more pressure on local infrastructure, because no one will live here.
s73v3r 11y ago
In order for it to work, it has to be a place that billionaires would want to be at in the first place. Something like this isn't going to work in the middle of nowhere, for example.
m-i-l 11y ago
The article quotes Michael Bloomberg as saying "If we can find a bunch of billionaires around the world to move here, that would be a godsend". But is attracting billionaires to your city a good thing? I can imagine it would be if they paid their taxes and contributed to the local economy, not just themselves but via their companies and personnel. But the article suggests in many cases they don't, i.e. they pay lower taxes and barely visit let alone invest outside the property market.

by jbhatab 11y ago

ceejayoz 11y ago

> Wouldn't another city just adopt similar systems and over time start to attract billionaires? 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.

ubernostrum 11y ago

Remember that real estate is about three things: location, location, and location. You bribe your way into tax abatements for luxury condos basically anywhere, but there's currently no way to bribe someone to move Central Park, the museums and arts centers and all the restaurants and other New-York-specific stuff that actually attracts people to within a few blocks of your cheap-tax-rate tower in Wyoming.

nostromo 11y ago
You're not being fair to his or her question. 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.
- warfangle 11y ago
  > 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?
- mturmon 11y ago
  Hmm, your fun fact (http://en.wikipedia.org/wiki/List_of_U.S._states_by_the_number_of_billionaires http://en.wikipedia.org/wiki/List_of_U.S._states_by_the_numb...) is fun, I agree, but also misleading. 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_search:ohio http://www.forbes.com/billionaires/list/#version:static_sear..., which would remove Ohio from the top 3 per capita.

apalmer 11y ago

These are the richest of the richest people anywhere. They live where they want to live. A billionaire doesn't move his whole existence across the country to save 10 million dollars in taxes.

logfromblammo 11y ago
But they don't even need to do that, in this instance. 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.
- darkstar999 11y ago
  That's flawed logic, as it's $100M + $1417/mo. 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.
  - logfromblammo 11y ago
    The wealth moves from $100M in cash to $100M in ultralux NYC condo. Absent some event that diminishes the value of ultralux NYC condos, the only real sacrifice is in liquidity. It's harder to spend a condo if you need to. 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.
    - s73v3r 11y ago
      You still have to have at least a decent amount of that $100MM in cash to start with.

infinotize 11y ago

Many (most?) of these people don't even live in these apartments. In fact, developers actually use this as an argument in favor of new construction - it won't put any more pressure on local infrastructure, because no one will live here.

s73v3r 11y ago

In order for it to work, it has to be a place that billionaires would want to be at in the first place. Something like this isn't going to work in the middle of nowhere, for example.

m-i-l 11y ago

The article quotes Michael Bloomberg as saying "If we can find a bunch of billionaires around the world to move here, that would be a godsend". But is attracting billionaires to your city a good thing? I can imagine it would be if they paid their taxes and contributed to the local economy, not just themselves but via their companies and personnel. But the article suggests in many cases they don't, i.e. they pay lower taxes and barely visit let alone invest outside the property market.