Long answer: New York City has historically had a policy that NYC is for New Yorkers. There are several aspects to this. One is the cooperative ("coop") structure that came about as rent control was (largely) unwound. Coops are typically owner-occupied and coops tend to have limits on renting out your property or even just not living in it that may require you to sell it. This is (IMHO) a good thing as condos, which don't tend to have the same restrictions, are often ghost buildings (the NYT has done pieces on this where occupancy rates can be 30% or lower).
This has meant that condos in the same area have tended to attract a premium of ~20% versus an equivalent coop. Condo buyers are dominated by foreign buyers paying all cash who are parking money in the US and/or buying an apartment they might occupy a few days a year.
This sort of thing is not good for the city as a whole. These residents aren't funding city services. Foreign buyers have I believe decimated neighbourhoods in other cities (eg I heard of this happening in Tel Aviv).
Now Bloomberg kinda went too far on this as he believe that you should attract the billionaires to the point that someone who owns a $100m condo (of which there are now several) pays only about 10-15x the property tax of a $1m condo. This is something that needs to be reformed.
I'm very much in favour of public policy that benefits residents be they owners or renters.
Now other commenters have pointed out one issue and that is you have to be careful you don't catch landlords in your net. Landlords provide a useful service in providing a rental stock for people to rent. There are various reasonable ways to handle this. Some options:
- Don't tax a property (extra) if it's occupied by somebody;
- Exempt landlords from the higher prices if they're a resident of the state (and paying state income taxes).
This can be a way of handling illegal hotels too. Have much higher taxes for non-active properties and reporting AirBnB type income can trigger whatever housing regulations apply so illegal hoteliers are faced with a choice of paying higher property tax if nothing else.
Long answer: New York City has historically had a policy that NYC is for New Yorkers. There are several aspects to this. One is the cooperative ("coop") structure that came about as rent control was (largely) unwound. Coops are typically owner-occupied and coops tend to have limits on renting out your property or even just not living in it that may require you to sell it. This is (IMHO) a good thing as condos, which don't tend to have the same restrictions, are often ghost buildings (the NYT has done pieces on this where occupancy rates can be 30% or lower).
This has meant that condos in the same area have tended to attract a premium of ~20% versus an equivalent coop. Condo buyers are dominated by foreign buyers paying all cash who are parking money in the US and/or buying an apartment they might occupy a few days a year.
This sort of thing is not good for the city as a whole. These residents aren't funding city services. Foreign buyers have I believe decimated neighbourhoods in other cities (eg I heard of this happening in Tel Aviv).
Now Bloomberg kinda went too far on this as he believe that you should attract the billionaires to the point that someone who owns a $100m condo (of which there are now several) pays only about 10-15x the property tax of a $1m condo. This is something that needs to be reformed.
I'm very much in favour of public policy that benefits residents be they owners or renters.
Now other commenters have pointed out one issue and that is you have to be careful you don't catch landlords in your net. Landlords provide a useful service in providing a rental stock for people to rent. There are various reasonable ways to handle this. Some options:
- Don't tax a property (extra) if it's occupied by somebody;
- Exempt landlords from the higher prices if they're a resident of the state (and paying state income taxes).
This can be a way of handling illegal hotels too. Have much higher taxes for non-active properties and reporting AirBnB type income can trigger whatever housing regulations apply so illegal hoteliers are faced with a choice of paying higher property tax if nothing else.