With so much backlash in US cities about "gentrification".. Will things change or at least slow down due to awareness ?? (New York: transplants, apartments)
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The last part hit the nail on the head and I agree. Sad part is that gentrification only benefits a small group of people who live in pre existing low income or ethnic neighborhoods. Generally speaking landlords, businesses and educated residents welcome gentrification with open arms. Majority of people in these poor neighborhoods can not benefit from gentrification because they dont own property, dont have an education and dont own a business. Gentrification can not work equally and never will. Gentrification only works on a micro level on an economic scale and not macro.
I think this is somewhat insulting to the poor people who live in these neighborhoods. They have brains do they not? What's to stop them from going out and getting an education? Or pursuing better types of jobs? Or maybe pursuing better lives elsewhere?
Rather than just whine and be negative, those living in ethnic neighborhoods have three options.
Move into a higher tax bracket.
Move out of New York.
Organize into some sort of tenant rights group and fight against the rent changes or other things they perceive as holding them back.
If they do none of the three yes, they will end up in the streets of NYC and it will be there for passively sitting on their asses and complaining. They do not have the luxury of sitting back and going after theory after theory. Some sort of action is needed.
The annual increases in property taxes on 1-family to 4-family houses is very limited. That is why you can have a $2,000,000 house in brownstone Brooklyn with property taxes of $5,000. That is not going to change, so house rich and cash poor owners will not be taxed out of their homes.
However, if long-term homeowners in Crown Heights or Bedford Stuyvesant (typically black families) that are house rich and cash poor can to sell their houses for over $1,000,000 to some white yuppies, they may choose to cash out.
Buildings with fewer than six units are not subject to rent stabilization laws. So the landlords can get what the market will pay.
So yes, gentrification will continue in these neighborhoods. Low property taxes will provide some stability. Homeowners will sell because they want to sell, not because they have to sell. Tenants in small buildings will be subject to large rent increases and will probably be forced to move.
Like it or not, that is what is happening.
New York's bizarre and byzantine property tax system is being challenged in court as discriminatory on the grounds it harms renters. Class action suit slams city
Everyone in Albany and local governments knows NY's property tax system is a mess, but to make it simpler and clearer would mean winners and losers. The latter most likely would be single to four family homes that would see their taxes increase. As would probably a good number of co-op shareholders. Co-ops in New York City and IIRC elsewhere in the state are taxed not as owned property, but based upon the value of rental property on the block. There are co-ops on the UES and UWS with some very well off shareholders that pay less in taxes than you would imagine. This is because often there is a lack of rental housing on the block and often what is there can have a large population of RS residents.
However much of that protection comes as a double edged sword.
By statue increases and decreases in property taxes for one to four family homes are phased in over several years. This can and often means homeowners are paying the higher assessments even when the current value has decreased. This is exactly what happened when the Bloomberg administration won property tax increases. Due to the length of time it takes to fully phase said increases in the financial/credit/housing meltdown occurred. While in theory the current value of many homeowner's property was less, they still were feeling the effects of the increase passed years ago.
Harlem used to be all White. They should never have allowed Blacks in. Lower East Side used to be Jewish and Italians and had peddlers on the streets: that should have been preserved, with billions in government subsidies and coercion to keep the Jews and Italians in place, if need be.
The LES was where everyone lived in the 1700's and 1800's. There were Whites (Dutch then English later joined by Irish), Blacks there since the 1600's from Slavery, and the Chinese. These were joined later by Jews, Italians and Hispanics.
Blacks started moving up to the area from 52nd St to Lincoln Center after Slavery ended in the 1840's in NYC. Harlem had a slave population as there were 2 major areas that slaves lived which was Hamilton Grange owned by Alexander Hamilton and the Bradhurst family. There were also slaves in the Bronx with the Morris family.
In the late 1800's more blacks from the South and the Caribbean starting joining the Black population in already in Harlem. Most of these Blacks were wealthy and educated and the Whites were selling to them rather than live with them.
In the 1920's working class Blacks started moving from the LES and the areas north of 52nd - Lincoln Center up to Harlem and into the Bronx. Only the wealthy whites left Harlem at this time, many remained until the early 1960's.
Italians, Jews and everyone else that could left those miserable LES tenements as fast as they could. The Gov't could not have coerced them to remain unless they invested money in the area, which they did by building the projects. Many of those projects were home to Jews and italians and other Whites for a generation, as well as Blacks and Hispanics.
New York's bizarre and byzantine property tax system is being challenged in court as discriminatory on the grounds it harms renters. Class action suit slams city
Everyone in Albany and local governments knows NY's property tax system is a mess, but to make it simpler and clearer would mean winners and losers. The latter most likely would be single to four family homes that would see their taxes increase. As would probably a good number of co-op shareholders. Co-ops in New York City and IIRC elsewhere in the state are taxed not as owned property, but based upon the value of rental property on the block. There are co-ops on the UES and UWS with some very well off shareholders that pay less in taxes than you would imagine. This is because often there is a lack of rental housing on the block and often what is there can have a large population of RS residents.
However much of that protection comes as a double edged sword.
By statue increases and decreases in property taxes for one to four family homes are phased in over several years. This can and often means homeowners are paying the higher assessments even when the current value has decreased. This is exactly what happened when the Bloomberg administration won property tax increases. Due to the length of time it takes to fully phase said increases in the financial/credit/housing meltdown occurred. While in theory the current value of many homeowner's property was less, they still were feeling the effects of the increase passed years ago.
Yes, the system is nuts, and everyone should be paying taxes based on the value of their property (A $1,000,000 property should pay twice as much as a $500,000 property).
The problem in NYC is that if the court ordered fair assessments, property taxes in places like Bed-Stuy and Crown Heights could quadruple (or more), and there could be a ton of forced sales by cash-poor property owners.
It's a tough issue. But the current system is ridiculous.
Yes, the system is nuts, and everyone should be paying taxes based on the value of their property (A $1,000,000 property should pay twice as much as a $500,000 property).
The problem in NYC is that if the court ordered fair assessments, property taxes in places like Bed-Stuy and Crown Heights could quadruple (or more), and there could be a ton of forced sales by cash-poor property owners.
It's a tough issue. But the current system is ridiculous.
They should do a reassessment when the property is sold. This topic came up awhile back and someone mentioned that some places in Florida did that. This would be totally fair for everyone. If not a full reassessment then at least towards something like 80% when it gets sold. So a 1mil property should be paying about 12-13k if assessed for its full value in NYC. This can also alleviate crazy jumps in real estate prices in traditional NYC slums.
Also regarding RS/RC apartments, add additional stipulations that all RS/RC to market rate conversions will require a full property tax readjustment to market rate as well. So there you go no one can have their cake and eat it too.
Last edited by bumblebyz; 03-07-2014 at 11:11 AM..
I am all for a reassessment of taxes so long as everyone is included..and not just me. If it means some people are forced to sell their homes...this begs the question: Should we allow people to skirt paying taxes that are owed on an asset because they do not have the cash? Does the IRS concern itself with whether you have the ability to pay or that you MUST pay?
If you have a million dollar home and are only able to keep it because you pay $2K in taxes instead of $14K, then that means you cannot afford to live in your home and must sell. It's a harsh thing to say, and it sucks, but you have the asset, you have to pay the taxes...period.
Some of these homes are really not worth a million. Take some of these Brownstones in Harlem that are wrecks, and the area around them no amenities except the subway. But now its worth 1 million because they don't make them anymore. A wealthier person would not move there, pay $14K in taxes and still have to send their children to private school. For that they can move to a suburb with a much better school district.
Some of these homes are really not worth a million. Take some of these Brownstones in Harlem that are wrecks, and the area around them no amenities except the subway. But now its worth 1 million because they don't make them anymore. A wealthier person would not move there, pay $14K in taxes and still have to send their children to private school. For that they can move to a suburb with a much better school district.
It's all about being near Manhattan. Near the Central Park of Philadelphia (Fairmont park), there is row after row after row of spectacular Victorian town homes, most directly over looking the park. Yet they are completely boarded up and anyone who values their money & well being would not go anywhere near them with a ten foot pole. If that were Manhattan, on the other hand, they would be going for $5M to $10M instead of being available at auction for the default price of back property taxes
Some of these homes are really not worth a million. Take some of these Brownstones in Harlem that are wrecks, and the area around them no amenities except the subway. But now its worth 1 million because they don't make them anymore. A wealthier person would not move there, pay $14K in taxes and still have to send their children to private school. For that they can move to a suburb with a much better school district.
If they are not worth a million, they will not be assessed for a million. Just because the renovated house next to you is worth a million, doesn't mean your wreck is worth a million.
So the wreck could be worth $500,000. Someone buys it for $500,000, puts $500,000 into it, and now it's worth $1,000,000. Because of the improvements, the city would then reassess to $1,000,000.
If they are not worth a million, they will not be assessed for a million. Just because the renovated house next to you is worth a million, doesn't mean your wreck is worth a million.
So the wreck could be worth $500,000. Someone buys it for $500,000, puts $500,000 into it, and now it's worth $1,000,000. Because of the improvements, the city would then reassess to $1,000,000.
They are usually never assessed to a million no matter what the condition.
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