New York To Become Ghost Town After Largest Tax Hike In History?

I am a lifelong democrat, but I have to say NYC and NYS are crazy wasteful spending cesspools. The top marginal rates in NYC, and hell, MY marginal rates are a lot higher than they would be if I worked in our London office, or if I lived in the Netherlands, and I suspect Toronto...and THERE I would get free healtcare!

A ghost town? Oh, okay, as long as we aren't exaggerating at all.

Ghost town? Doubt it. The price mechanisms will work. If every coop and condo in Manhattan cost $100, there would be a line to get in. Chances are they won't go to $100, but they won't stay at whatever the median price is now either. Yet somewhere in between the market will clear and life will go on. Granted, the higher the costs associated with calling Manhattan home, the lower the price of fixed assets(coops and condos). So maintenance, RE taxes, user taxes, income taxes can go to whatever point some deem necessary, but it requires a tradeoff.

There are two sides to the tax increase: those who pay for government and those who receive benefits from government. For the tax payers in the higher income brackets, the tax increases are a clear signal that a move to Connecticut, Virginia, Georgia, Florida, or Texas would be profitable.

For poor people around the world who receive tax benefits, New York is better than ever with more and more services provided by government.

So the effect should be that the rich people move out while more and more poor people move in until the government no longer has the tax base to provide the services and the City's finances implodes again like in 1975.

Columbus, as you point out, that (among other things) is what happened in the 70's.

However, don't think taxes in Florida are lower. You haven't seen the property taxes, or the home insurance premiums.

In NYC the problem is an uneven distribution of the tax burden. A self-employed condo owner in Manhattan would pay three times the tax as an employee single-family home owner in the outer boroughs. That because the self-employed are taxed at a higher rate, and condominium owners pay a far higher property tax burden than single-family home owners whose property is worth the same.

"For the tax payers in the higher income brackets, the tax increases are a clear signal that a move to Connecticut, Virginia, Georgia, Florida, or Texas would be profitable."

exactly right. i'm at the highest income bracket or near it even thought i barely make it as a middle class. for middle class people the move to texas for ex, also pays off. it's not only for the rich. taking into account the lower cost of living, it's going to be a no brainer.

on sunday at best buy a guy from the MTA (with an uniform of those directing traffic) said to a lady next to me "this is my next upgrade, maybe next month", while pointing out at a 65 inch flat screen tv. am i supposed to stay and pay taxes to pay for that?

Yes, but then you have to live in Texas. Everyone has to make their own decisions, but that is one state I'll never set foot in again if I can avoid it, and I have family there (which means that total avoidance is unlikely).

I fail to see why a guy from the MTA talking about buying a large TV should push you out of the city. Maybe he manages his salary well; maybe he's up to his eyeballs in credit card debt. Want a big TV? Buy one; they aren't excessively expensive.

I thought the proposed tax increase on people earning over $300k brings New York state rates inline with Jersey & Connecticut? That would mean a move doesn't save u tax expenditure...

and where is everyone going to go? NJ and CT are also raising taxes on the top tax rates. Sure you can go to a stae with no income tax, but most of them suck. Seriously, who wants to live in the back hills of Tennessee?

"Yes, but then you have to live in Texas. " lol, my husband says the same thing!

it's not the tv. what pisses me off is that a 25% rise in fares of a non discretionary item is more likely than having a say 5% salary cut for all MTA employees across the board. i don't know if that would help to close the loophole though, as it was never even suggested.

This is the direct result of Reagan-era tax cut policies. It was warned at the time that Federal cuts would just drive increases in state-, county-, and municipality-level taxation.

So who are the winners of that policy, besides the mega-wealthy?
Non-glibly speaking, states that receive huge Federal money. That's mostly states with lots of military bases. Glibly speaking (or not?), states that want to embrace third-world standards, where a few very wealthy people are well-off, and everyone else is willing to do anything for subsistence. These include deep-south states like Mississippi, but (surprisingly) New Hampshire also. New Hampshire has no state tax, and a terrible education system at all levels, among other things.

But let's look at New Hampshire. Lots of people moved there from "Taxachusetts" over the past generation. And guess what? Those same lots of people immediately started demanding more and more goods and services from government -- better roads, schools, police, etc. etc. Soon it will go the way of Connecticut, and impose a personal income tax.

Sadly, those states that receive huge Federal spending are unlivable places like Texas. Pass.

I understand, admin. I just think MTA employees do very difficult work under primitive conditions of a kind fairly unimaginable for me with my comfy office job; and, I still think the NY subway system is one of the most affordable in the world. I don't begrudge them decent salaries, what gets me are the pension benefits, which do threaten to cripple the city financially. A classic example of both the union and the government kicking the can down the road.

Unfortunately, as with most things in life, to get services you kinda have to pay for them. The collective mechanism for that tends to be taxes.

I may not wish to live Texas either, but the following population data and forcasts don't paint a rosy picture for NY, NJ or CT.

Historically, soundest state finances, growing job growth and greatest investment potential are associated with population growth.

SERIES A July 1, July 1, July 1, July 1, July 1,
1995 2000 2005 2015 2025

Alabama............. 4,253 4,451 4,631 4,956 5,224
Alaska.............. 604 653 700 791 885
Arizona............. 4,218 4,798 5,230 5,808 6,412
Arkansas............ 2,484 2,631 2,750 2,922 3,055
California.......... 31,589 32,521 34,441 41,373 49,285
Colorado............ 3,747 4,168 4,468 4,833 5,188
Connecticut......... 3,275 3,284 3,317 3,506 3,739
Delaware............ 717 768 800 832 861
District of Columbia 554 523 529 594 655
Florida............. 14,166 15,233 16,279 18,497 20,710
Georgia............. 7,201 7,875 8,413 9,200 9,869
Hawaii.............. 1,187 1,257 1,342 1,553 1,812
Idaho............... 1,163 1,347 1,480 1,622 1,739
Illinois............ 11,830 12,051 12,266 12,808 13,440
Indiana............. 5,803 6,045 6,215 6,404 6,546
Iowa................ 2,842 2,900 2,941 2,994 3,040
Kansas.............. 2,565 2,668 2,761 2,939 3,108
Kentucky............ 3,860 3,995 4,098 4,231 4,314
Louisiana........... 4,342 4,425 4,535 4,840 5,133
Maine............... 1,241 1,259 1,285 1,362 1,423
Maryland............ 5,042 5,275 5,467 5,862 6,274
Massachusetts....... 6,074 6,199 6,310 6,574 6,902
Michigan............ 9,549 9,679 9,763 9,917 10,078
Minnesota........... 4,610 4,830 5,005 5,283 5,510
Mississippi......... 2,697 2,816 2,908 3,035 3,142
Missouri............ 5,324 5,540 5,718 6,005 6,250
Montana............. 870 950 1,006 1,069 1,121
Nebraska............ 1,637 1,705 1,761 1,850 1,930
Nevada.............. 1,530 1,871 2,070 2,179 2,312
New Hampshire....... 1,148 1,224 1,281 1,372 1,439
New Jersey.......... 7,945 8,178 8,392 8,924 9,558
New Mexico.......... 1,685 1,860 2,016 2,300 2,612
New York............ 18,136 18,146 18,250 18,916 19,830
North Carolina...... 7,195 7,777 8,227 8,840 9,349
North Dakota........ 641 662 677 704 729
Ohio................ 11,151 11,319 11,428 11,588 11,744
Oklahoma............ 3,278 3,373 3,491 3,789 4,057
Oregon.............. 3,141 3,397 3,613 3,992 4,349
Pennsylvania........ 12,072 12,202 12,281 12,449 12,683
Rhode Island........ 990 998 1,012 1,070 1,141
South Carolina...... 3,673 3,858 4,033 4,369 4,645
South Dakota........ 729 777 810 840 866
Tennessee........... 5,256 5,657 5,966 6,365 6,665
Texas............... 18,724 20,119 21,487 24,280 27,183
Utah................ 1,951 2,207 2,411 2,670 2,883
Vermont............. 585 617 638 662 678
Virginia............ 6,618 6,997 7,324 7,921 8,466
Washington.......... 5,431 5,858 6,258 7,058 7,808
West Virginia....... 1,828 1,841 1,849 1,851 1,845
Wisconsin........... 5,123 5,326 5,479 5,693 5,867
Wyoming............. 480 525 568 641 694
Projections of the Total Population of States: 1995 to 2025

wow, where did you get that estimates? alan, why is dallas unlivable? (i've been there only for a weekend, wasn't enough to rule it out)

even with the fare hikes, the NYC subway is cheap because it's one of only a few subways in the country that does not charge you based on how far you travel. When I used the D.C. Metro a few years ago, your fare is based on your mileage.

it is a matter of priorities in life. the problem is the political structure, spending that exceeds inflation and lack of living within means. I do not mind paying taxes but on top of it, I pay for health care and education so my marginal tax is 90%...

007:
Wow, so at the margin, it only takes 10% of your income to pay for your housing, food, clothing, sex and drugs, other entertainment etc..etc..man, you got to be rich to think like that in the first place!

admin, that's funny -- I also was in Dallas only for a long weekend, but that was more than enough to rule it out both for living and re-visiting. There's no there there. Absolutely no downtown whatsoever. Even Phoenix has more of an urban core.

patient09, those models do not factor in one of the biggest future potential factors in determining population growth: oil prices.

The states with the biggest projected population growth is based on the fact of suburban sprawl continuing to expand outward. However, as we had just a brief glimpse of the $4+/gallon for gas prices, the ever expending exurbs will be the hardest hit.

Georgia, Florida, Texas, Calif, Ariz and the other sunbelt states have invested primarily in their interestate and limiated access highway systems with zero investment in mass transit. This will prove a huge negative when oil prices surge again.

According to a seminar I recently attended, this will hugely alter the location of growth and the migration of people. Look for an ever increasing return the the urban core where inexpensive mass transit will be substantially less affected by ever increasing oil prices.

As everyone knows, NYC is well positioned in that inevitable scenario.

Is mass trast really that imortant? Who is gving up their cars in favor of the train? I own a house in north Jersey and most of my neighbrs have no less than 3 cars. The guy across the street frm me has so many BMWs, his house looks like a BMW dealership. And the guy acrss the street from him as enough Mercedes Benzes to fll a MB dealership. Seriously, he has MBs parked all over the place, inclding the front lawn.

"patient09, those models do not factor in one of the biggest future potential factors in determining population growth: oil prices"

that's a great point. i wanted to see the survey to see what assumptions they made, but patient didn't disclose the source yet.

"what gets me are the pension benefits, which do threaten to cripple the city financially. "

no kidding. it would be kicked ass to have to pay for those only if you have a pension yourself.

Nobody knows where oil prices are headed. Not me. Not any SE poster. AND CERTAINLY NOT GOLDMAN SACHS.

in fact, for 2009, GS predicted last year that the average cost of a barrel of oil will be $109. OOPS!

I am not sure oil is directly tied to population growth.

Florida, Texas, California, Arizona and Colorado have population growth expected in a large part due to retirees moving to warmer climates.

New Mexico and several other states have increases due to immigrants from the south.

NYC is expected to have a steady growth of population over the next 10-20 years. Upstate NY, however, has been losing people because the economies of Buffalo, Albany, Syracuse, etc are terrible and it is cold as hell there.

It's very simple; NY costs more because it's worth more. If you value what living here gives you, you pay. Enough people value it, and that keeps prices here relatively high. If you don't value it, Dallas is much, much cheaper. NY was never economically efficient.
I spent a year in Dallas, where I had a gigantic, beautiful apartment for 1k a month (and could have bought it for 200 or so), my car insurance was dirt cheap and I had a very good job. I hated it.
Now I'm back, my apartment costs twice as much for half the space, my insurance is insane (but then a car is a luxury here) and my job is mediocre (in terms of satisfaction). But I love NY; just walking down the street is an incredible experience here, so I'm much happier. And part of what makes NY NY is its mix of people, and we do have to pay for that. I don't want to live on the island of the rich. That was my "neighborhood" in Dallas. It sucked. I see a greater range of people, ideas, oddities, characters and beauty in a one day here then I ever saw in Dallas. To me, that's worth a lot.

evnyc:
"I just think MTA employees do very difficult work under primitive conditions of a kind fairly unimaginable for me with my comfy office job;"

Dont get me started on this. There is Sooo much fat in the system that can be cut but they would never go there. They can get away with the threat of a vital service coming to a halt. I KNOW people who work for the MTA and for them a 3hr work day is a Long day. Some of them have so much time on their hands that they are running other businesses. And these are people who work in offices. There is so much corruption there you wouldnt believe it.

alpine292, you are correct -- oil prices have the most impact in parts of the country where incomes are low and driving distances are great. Places like Georgia, Florida, Texas, Calif, Ariz and the other sunbelt states.

I visited a popular college bar in Tempe AZ two or three years ago, and it was dead on its most popular night ($5 entry, $1 u-call-its all night, including exotic drinks and top-shelf liquor). The bartender explained that increased weekly gasoline expenditure had totally erased the kids' small entertainment reserves. They're probably sniffing glue at home or studying instead of drinking a variety of projectile-vomit-inducing cocktails over the course of one night. It's just sad.

waverly, it's economic upheavals such as this one that change demographic trends. those population statistics may or may not be proven correct, but they were certainly put forth under very different circumstances, and can't be relied upon now without further research.

"it is cold as hell there."

It's cold as hell in nearby Toronto, as well, and it seems to be doing just fine.

my father was a conductor for 30 years. Please tell me more about these 3 hour work days at the MTA because they are news to me.

oh, and my faher never did his errands while at work. He could have, but if he dd, the train and everyone on it would have to wait for him to get back and I am sure he would been fired for shutting down the sbway system so that he can go to Whole Foods.

"There is Sooo much fat in the system that can be cut but they would never go there. They can get away with the threat of a vital service coming to a halt."

Yes, the union overuses that threat, hence the pension problem. However, I'm not going to point fingers at the workers and blame them. I think that's unfair. I see train conductors and service people working at 3 AM on weekends, and most of the time they're reasonably polite and competent. I don't demand more performance for less pay from public employees simply because they are easy to kick around. Maybe that comes from being the offspring of public employees myself, maybe not, but I disagree with you, iamlooking.

moving somewhere else because of the tax rate is tempting, but StF62 nailed it on the head: the value of living in NYC is 100x greater. I used to live in Chicago; if I stayed I could've owned a condo and paid less in mort+maint than what I pay in rent here. But in Chicago, you need a car. The winter weather is ridiculous. The crime rate is horrible. You have to travel to get bread, milk, etc.

"and where is everyone going to go? NJ and CT are also raising taxes on the top tax rates. Sure you can go to a stae with no income tax, but most of them suck. Seriously, who wants to live in the back hills of Tennessee?"

Or, uh, Florida.

Nobody from NYC ever moves there, right?

Back to my point - taxes are LOWER in London and about the same in Toronto, and NO ONE can credibly argue that services, overall, are better in New York than those places. NYC has wasteful spending and corruption galore.

retirees move to Florida. And besides, if you go to Florida, get ready to pay sky high flood insurance premiums.

"But I love NY; just walking down the street is an incredible experience here, so I'm much happier. And part of what makes NY NY is its mix of people, and we do have to pay for that."

100% agree. is there a low tax city with nice weather, walkable (this is key for me), with a good university and great mix of people anyone?

admin: I saw your question, just won't give up more data for free. I think another huge variable that most won't admit to is is..is...the weather. The weather simply blows in the northeast. Many folks, me included, like to spend as much time as possible outside enjoying God's great earth. I think some of these states with large growth from '95-'05, Colorado, Utah, Virginia, North Carolina was due to weather.

aboutready - Good point...things are fluid and can always change. It would be naive to think that this economy may not have some impact on population trends. Although, we must remember that all states will have budgetary problems. Also, immigration rules/changes could also have an impact on growth.

Steve - that is true, but sagging economies and bad weather are never a good mix. People will put up with cold in Chicago because it's a city and it's economy has been pretty good (up until recently, for the most part). Manufacturing cities that have 10-15% unemployment and get lake effect snow in April have a tougher time growing their populations.

admin: Vanderbilt

I am from Europe and could only live in Manhattan (if living in the US). I travel a lot on business and find it astounding how little people in other cities know about world politics, good food etc. This city has a great mix of people, from all walks of life. I wouldn't change that for anything.

"Back to my point - taxes are LOWER in London and about the same in Toronto, and NO ONE can credibly argue that services, overall, are better in New York than those places. NYC has wasteful spending and corruption galore."

Absolutely... I think we have the most corrupt government outside of the 3rd world here...

"100% agree. is there a low tax city with nice weather, walkable (this is key for me), with a good university and great mix of people anyone? "

Depends on what you mean by "nice" weather.... but Asheville, NC is pretty great in a lot of respects. Maybe Austin (some walkable). And how about Portland?

Charlottesville, VA.

thanks guys (&patient)! i'll check htem out (portland, oregon??)

Yes, portland, oregon. A VERY walk/bike city. A lot of things going for it.
And very mild weather.

I'd also throw in seattle, if you are ok with some grey. A very pretty and liveable city.

RE: Portland: no jobs. Believe me, I've been looking for years. Lovely city though. I completely disagree with 10022 about corruption in this town. And, London has far, far higher rents than New York. I'd rather pay taxes and get services than add to my substantial rent bill.

Washington State (at least as far as I know, things are changing quickly) has no income tax. We are currently planning on retiring to Seattle. It's a great city, and even doable for someone who doesn't drive, although housing prices have been quite high compared to incomes in the last few years.

I'm following that market fairly closely, as we may decide to buy there and continue to rent here instead of buying here. Seattle has one of the greyest winters in the lower 48, but has the most stunning summers. If you can get away for a few weeks in the winter, it's got a tremendous amount to offer.

Portland is lovely, but as of the early 90s it was still full of pod people. Haven't been there recently, so my opinion is quite dated.

admin: 7 states have no income tax

http://www.taxadmin.org/fta/rate/ind_inc.html

Yes, but do you want to live in Texas, Alaska, Nevada, Wyoming, Rhode Island or Florida?

New Hampshire might be OK if you were retired, but the way I see it Seattle is still the only major city that's livable with no income tax. I'm not a fan of Texas, for a mid-sized city, Austin may fit the bill for some. And I'm not a fan of year-round heat, but Miami may work for others.

admin, I'm still hoping that your earlier suggestion, the South of France, may be doable. one has to dream large.

admin: UT at Austin? Or is that too hot

admin: once again, I have no horse in this race. Nashville, Vandy, it's all good. Way underated because of misperceptions about Tennessee.

http://www.vanderbilt.edu/

http://en.wikipedia.org/wiki/Nashville,_Tennessee

One nice thing about property tax in California is that it's fixed to 1.25% of your purchase price, for single family homes AND condos. Forever, until you sell or add on to the property.

Another nice thing here is the Mills Act. All the new condo developments in NYC have tax abatements that end in 5 to 25 year. In California the Mills Act encourages developers to convert historic (100 years old) office buildings to condos by lowering property tax 60% forever as long as architecturally significant features of the building are preserved. Technically it's a state law but I've only seen it used in downtown Los Angeles, where the city has been offering crazy incentives to rehabilitate.

My property taxes on a 1400 sf luxury Mills Act condo I bought in downtown LA for $541K are $541 x .0125 x .6 = $4057.50 ... and that's for every year I own the apartment. I think they're allowed to increase it for inflation or by 2 %, whichever is less.

A family member of mine bought a 850 sf condo in Midtown Manhattan 1998, taxes were $4000 then and I think now are around $10K.

One nice thing about property tax in California is that it's fixed to 1.25% of your purchase price, for single family homes AND condos. Forever, until you sell or add on to the property.

Another nice thing here is the Mills Act. All the new condo developments in NYC have tax abatements that end in 5 to 25 year. In California the Mills Act encourages developers to convert historic (100 years old) office buildings to condos by lowering property tax 60% forever as long as architecturally significant features of the building are preserved. Technically it's a state law but I've only seen it used in downtown Los Angeles, where the city has been offering crazy incentives to rehabilitate.

My property taxes on a 1400 sf luxury Mills Act condo I bought in downtown LA for $541K are $541 x .0125 x .6 = $4057.50 ... and that's for every year I own the apartment. I think they're allowed to increase it for inflation or by 2 %, whichever is less.

A family member of mine bought a 850 sf condo in Midtown Manhattan 1998, taxes were $4000 then and I think now are around $10K.

One nice thing about property tax in California is that it's fixed to 1.25% of your purchase price, for single family homes AND condos. Forever, until you sell or add on to the property.

Another nice thing here is the Mills Act. All the new condo developments in NYC have tax abatements that end in 5 to 25 year. In California the Mills Act encourages developers to convert historic (100 years old) office buildings to condos by lowering property tax 60% forever as long as architecturally significant features of the building are preserved. Technically it's a state law but I've only seen it used in downtown Los Angeles, where the city has been offering crazy incentives to rehabilitate.

My property taxes on a 1400 sf luxury Mills Act condo I bought in downtown LA for $541K are $541 x .0125 x .6 = $4057.50 ... and that's for every year I own the apartment. I think they're allowed to increase it for inflation or by 2 %, whichever is less.

A family member of mine bought a 850 sf condo in Midtown Manhattan 1998, taxes were $4000 then and I think now are around $10K.

places to be check out
Bolder Col left-weisng city so I feel like at home ;-)
winter is not bad, they have a LOT of sun

New Mexico Santa Fe
great food, a lot of sun, hot days, cool nights (not like NYC)
a lot of tourists during summer:(
arts, nature etc
I think I am leaving now LOL

Bolder left leaning city bicycle town

sticky CAL is bankrupt so they will have to raise taxes

HT1- on Bloomberg, Moodys has put entire local government sector on negative outlook watch. They're not saying who is most likely to go down, just lettin' everyone know that things don't look so fine. One of the primary factors is reliance on real estate taxes/transfer taxes.

"One nice thing about property tax in California is that it's fixed to 1.25% of your purchase price, for single family homes AND condos. Forever, until you sell or add on to the property."

Yes, nice for the beneficiaries, not the folks who are subsidizing them.

" I completely disagree with 10022 about corruption in this town."

Not that you backed that up or anything... but we're as corrupt as it gets.

State Legislature is a model for patronage and union corruption.

Illinois and Louisiana are far more corrupt that NY. Yeah, Spitzer liked hookers, but at least he did not sell his office.

> Illinois and Louisiana are far more corrupt that NY.

Try again.

They outed the corrupt politician in Illinois, here, the corrupt run the show...

Also, check out what happen with the Taleff murders in Suffolk County. Thats as backwater as anything thats ever been in a movie about Louisiana.

That folks who live here don't get it, makes it scarier.

That the guy from New Jersey doesn't get it... well, thats to be expected.

tankleff

What makes you so sure that they outed ALL the corrupt politicans in those 2 states? How do you know that there are no corrupt politicans in Illinois right now still holding office? (cough, Roland Burris, cough, Roland Burris)

Sorry to add but there is a city that should not be discounted and that is CHICAGO!!! yeah is not so full of yappies like NYC, might have some crime problems that adds some thrill to your life awesome dowtown and some really cool neighborhoods. Coming from Chicago I still think manhattan is a bit overated. And Finally CHEAPER COST OF LIVING. small details are a corrupt state governor, a dinasty in the major's office and a brutal winter, but then again small details.

evnyc > And, London has far, far higher rents than New York.

False. They've come down in a hurry. You can now get a 1-bedroom in Chelsea/South Kensington/Belgravia for $2100 a month.

$2,100 a month in which currency crescent? Please remember that the British Pound is worth more than the USD.

"Sorry to add but there is a city that should not be discounted and that is CHICAGO!!! yeah is not so full of yappies like NYC, might have some crime problems that adds some thrill to your life awesome dowtown and some really cool neighborhoods. Coming from Chicago I still think manhattan is a bit overated. And Finally CHEAPER COST OF LIVING. small details are a corrupt state governor, a dinasty in the major's office and a brutal winter, but then again small details."

Hi Rufus!

> I thought the proposed tax increase on people earning over $300k brings New York state rates inline with Jersey & Connecticut? That would mean a move doesn't save u tax expenditure...

You're buying the liberal media bias.
1) You forgot about the city tax.
2) Connecticut state tax is 5% flat. New York's before and after is JUST a little higher.

Who is rufus!

A ghost town has look-through office buildings.
Oh,oh, we are almost there

Manhattan office rents fell the most in at least 25 years in Q1 2009

as financial companies slashed jobs and relinquished space in the U.S. recession.

Rents dropped 6% from Q4 to $65.01 a square foot, commercial property broker Cushman & Wakefield Inc. said in a report today. The decline is the most in records dating back to 1984, Cushman said, and shows how much the fallout from the September bankruptcy of Lehman Brothers Holdings Inc. hurt the New York property market.

“It’s gone beyond the financial firms,” Joseph Harbert, Cushman & Wakefield’s chief operating officer for the New York region, said in a telephone interview. “It’s broad across a lot of industries. Everybody has the same way of thinking, which is low confidence in job growth, consolidation, cutting expenses, not hiring unless you really have to.”

The recession has eroded demand for commercial property as companies fire workers and consumers rein in spending. The Bloomberg REIT Office Property Index of 14 companies is down 28 percent this year. In New York, the amount of space available for sublease approached a five-year high in the first quarter, Cushman said.

Space for sublease helped push the overall vacancy rate in Manhattan to 9.6 percent from 6.1 percent a year earlier, the highest since the third quarter of 2005, the report said.

Rents are “falling faster than they did in the last two recessions,” Harbert said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aA_to5zGyw2o&

350 a week in British pounds * 4.25 weeks * 1.47 = $2186 (ok, the pound went back up in the last 1-2 weeks)

crescent - are rent's in London really down that much? I lived there in the late 90s, and in 1998 it was hard to find a 1 bed for 350/week in those neighborhoods - so we're nominally flat over 12 years, which would imply down 40% or so real?

Name your price.

Listed asks are 400-450, and the brokers have all made an art form of claiming a phantom other bidder is there but that they like you and will take your bid if it's 375, but you hold to 350 and you'll get it.

London might have had a bigger RE bubble than Manhattan. Their growth was even more dependent on finance than us.... and they are getting absolutely smacked right now.

The crisis facing pension plans for US state and municipal employees is deepening as investment losses deplete the resources of retirement funds for teachers, police officers, firefighters and other local government workers.

The largest state and municipal pension plans lost 9 per cent of their value in the first two months of this year, according to data from Northern Trust. That followed a loss of 26 per cent in 2008. Smaller funds, which underperform the larger ones, lost more, experts say.

The pension funds, which number 2,600 in total, hold more than $2,000bn after losses last year of close to $1,000bn.

The losses have left retirement plans about 50% funded – that is, they have only half the money needed to cover commitments to 22m current and former workers, experts say. State governments typically put the funding figures closer to 60-70 per cent, although most experts use different calculations.

“There is a massive national underfunding problem,” said Orin Kramer, chairman of the New Jersey pension fund. ”

Unlike company pension plans, state and municipal retirement funds have no federal guarantee fund. This has led to predictions of benefit cuts and possible federal intervention.

“The federal government will get involved, without question,” said Phillip Silitschanu, analyst at Aite Group, a consultancy. “They could provide federal loans, or demand cutbacks as a condition of stimulus money, or there could be a federalisation of some of these pensions.”

Without investment income, funds are liquidating assets at huge losses to pay pensions.

Police pensions are in especially poor shape, in part because states have promised earlier retirement on full pensions, but seldom increased contributions.

In late January, Terry Savage wrote that the pension tsunami is about to hit:

One day soon you may have to decide whose retirement comes first: yours or the fireman’s? Or the policeman’s? Or your child’s schoolteacher’s?

Your city and state have made generous pension promises to all those public servants—funded with your tax dollars. Only suddenly it turns out that those pensions aren’t very well-funded, after all!

While you’ve been worried about your shrinking 40l(k), our public servants have been smiling. They know their defined-benefits pensions are guaranteed by your local taxing body.

And while barely 20% of private-sector employees are eligible for defined-benefit pension plans, fully 90% of state and local workers get that coverage, according to the Federal Reserve Bank of Minneapolis.

But now, because of a combination of too-high estimates on investment returns, too-low annual contributions, and the current stock market losses, those pension funds are woefully underfunded!

full text and much more can be found her

http://pensionpulse.blogspot.com/2009/04/checkmate-for-pensions.html

Couldn't help commenting on this thread about the desirability of living in Manhattan despite high taxes, high costs, high rents, high corruption, high .... well everything.
If any of you guys plan to leave for Dallas or Chicago to get away from Manhattan - please think again. No intention to turn this into a Chicago or Dallas vs. NYC thread, but there is a reason why we live here and enjoy living here. I wil be moving shortly to Asia and will (sniff!) miss this town like nothing else. So my advice, do so for the right reasons and make sure what you wish for.

I spent a year each, working on client related engagements in both Chicago and Dallas. The people are nice and friendly, but too religious, frighteningly fanatical about football and any sports, and very very provincial. You will be hard pressed to find the sort of cultural and other eclectic activitities, eclectic food choices, diverse ethnic/racial/cultural groups of people which makes NYC what it is. Think twice before jumping to these towns guys. Not bad places to live, but do so for the right reasons and make sure you don't expect Manhattan - 'cuz you will not find it there.

cheers,
Baaba Maal

"What makes you so sure that they outed ALL the corrupt politicans in those 2 states? How do you know that there are no corrupt politicans in Illinois right now still holding office? (cough, Roland Burris, cough, Roland Burris)"

You are missing the point... Chicago gets rid of some, not necessarily all.

In NYC, they stay forever.... Sheldon Silver, anyone?

The reason it is so corrupt here is that corruption isn't considered corruption. At least in Chicago they know what it is...

"> I thought the proposed tax increase on people earning over $300k brings New York state rates inline with Jersey & Connecticut? That would mean a move doesn't save u tax expenditure...

You're buying the liberal media bias.
1) You forgot about the city tax.
2) Connecticut state tax is 5% flat. New York's before and after is JUST a little higher."

Wow... how convenient.

Man, the leftie tax liars are always out in force!

Our city and state taxes are EACH as high as or higher than Jersey/Connecticut taxes... meaning we get it twice over. And those numbers are going up.

We are by far the highest taxed state... and its getting worse. If you add in the Obama taxes, the marginal rate in NYC is calculated at 56%.

AND, when you factor in the phase outs you lose as your income goes up - yes, that absolutely adds to marginal rates - the marginal rate can be closer to 70%.

Yes, 70%.

And yet NYS managed to spend every penny and THEN SOME.

"the marginal rate can be closer to 70%.

Yes, 70%."

And worth every penny, because you get to spend the other 30% in NYC year-round, and not commit tax fraud.

Of course, don't forget the sales tax, luxury tax, etc...

Who wants to live in those low-tax cesspools like West Virginia or Tennessee? Chicago is a disgusting and Houston and Dallas are both horrible.

I live in Houston right now (in a 6,500 sq foot house that only cost me $750,000) and am planning a move to Manhattan. I will be hit with the "millionaire tax", my living expenses will skyrocket... but I don't give a crap.

NYS is getting worse every year. I watched these two losers in the meat store thanking the state for granting them $60/month more for meat. They had bought over $170 worth of meat at that time...almost got beaten by couple of italian dudes for screaming out how much meat they got with their medicaid card.

wow, 6,500 square feet. Do you ever get lost in your house?

6,500 doesn't even seem big to me...it seems normal. Most of the people I know in Texas live in 3,500 sq ft+ homes.

It will be different in a much smaller apt though.

You need the extra square footage to fit your guns and your fat ass.

10022: Don't be stereotypin the dude. We need some cowboys to help us fight Albany. Welcome plastic.

hey guys, i've been researching promising places to relocate to (away from very expensive and not so promising nyc). what do you guys think about salt lake city?

for a young healthy family, one of the attractions of utah is that health care costs are the lowest yet people are the healthiest. lower rates of obesity, diabetes, cancer helps in that regard. no community rating nor tons of mandates (unlike NY) helps too. health care costs are important to us as we might become self-employed eventually. it's a right to work state vs unionized new york, which i think means lower future taxes hikes.

"Utah has historically been one of the three or four best managed states in terms of its fiscal policy," said the report's coauthor, Richard Greene, a frequent consultant to PEW.

affordable housing and tons of outdoor activities. anyway, will keep on researching it. home prices are going down in the area, and tons of REO are coming in line. what an adventure it would be to move there!

another attraction is that demographics are good. the elderly are in theory the most expensive for states and locals due to nursing homes and the like according to what i've read. this is also thanks to medicaid, but i should know more about it. so the lowest the proportion of elderly to working adults, the better in terms of real disposable income for the young. the northeast in general is not good in that regard.

I'd love to hear what you find on different cities. I can't leave yet, but I like to plan.

I would have some issues with SLC. But I grew up in the Northwest, and we had pretty biased opinions and I haven't been there recently (10 years ago I wasn't too impressed).

Your positives are definitely compelling.

The big negative for me would be the region's water availability. No sense moving for lower taxes if you wind up paying through the nose for water.

great point evnyc. aboutready: i'll share what i find then. in my spare time i'm looking for the highest quality of life with the lowest costs for a young family. that correlates with good services, low taxes, affordable nice housing and high discretionary income. an economy with good prospects is key. huge unfunded pensions are a no-no, same with bad demographics.

for me the issue with SLC might be religion. but saw that SLC is becoming a magnet for the gays and lesbians, so it might not be an intolerant place to live.

New York's higher property taxes are going to take a bite out of your wallet - even if you don't own property.

State regulators Tuesday let Con Edison hike electric rates by 6.1%, with more than half the $721 million increase due to higher property taxes and assessments.

At the same time, the Rent Guidelines Board released its new study of landlords' operating costs, which said the biggest single factor was an 11.7% property tax jump.

New York raised property taxes 7.5% at the start of the year to help balance its budget.

The city also raised the assessed value of property to take into account the real estate boom.

For Con Ed, New York's single biggest taxpayer, the annual property tax bill is $1.1 billion a year - which it passes on to customers.

The Public Service Commission gave Con Ed $60 million less than it wanted, saying the utility would have to swallow the costs in the name of austerity.

"In this economy, the idea of raising rates is very distasteful, and it's going to be very difficult for people right now," Public Service Commission Chairman Garry Brown said. "These are really, really tough times."

Con Ed said it was disappointed and will look for savings "wherever it makes sense and to serve our customers."

Other costs driving the hike were pension contributions and an extra $95 million for Con Ed's investors - in addition to the higher costs of running an electric system.

Assemblyman Michael Gianaris (D-Queens), a Con Ed critic, called the new rate hike a "continuing outrage" after last year's 4.7% increase.

At the rent board, the second-largest cost increase was for utilities like electric and water, which rose 14.5% last year and are scheduled to rise 14% this year.

The estimated 4% overall cost increase for landlords is less than last year's, which is likely to mean lower rent increases this year for rent-stabilized tenants.

A year ago, landlords' costs were estimated to rise 7.8% - leading to rent hikes of 4.5% on one-year leases and 8.5% on two-year leases.

http://www.nydailynews.com/ny_local/2009/04/21/2009-04-21_dont_own_property_citys_new_higher_property_taxes_will_still_cost_you_.html

thanks for that info! i was going to point out to evnyc about cost of living estimates that ACCRA issues for main cities in USA. NYC ranks horribly not only in housing, but also on utilities. it's as 2,5 times more expensive than SLC. my first impression is that they have plenty of natural gas. they might also be reluctant to put tons of taxes on utility bills as nyc does (like with the land phone bill in nyc used to before i disconnect it).

also take into account that they are among the few in USA to use natural gas for transportation, which is a kick ass and lowers transportation costs. anyway, i'm researching it all! not only in utah but every other state (don't want to lack objectivity).

being a magnet for the gay and lesbian community IS a major plus. i think i'm showing my age, and need to be more open-minded. thanks for sharing.