Co-op and condo owners will pay 10.3-percent more Tax

Another reason not to buy.

This is just the beginning - every fee that you can possibly imagine (and some new ones) will be increased. Water. Refuse. Electric. Cable. Transfer taxes. Mortgage taxes. Assessments will increase. Find a quality rental and sign an iron clad long term lease!

Yeah. All the rich people will leave...to where? My boss in Port Washington pays $29,000(!!!!)/yr. in RE taxes on a home that is perfectly lovely but is a house--not a mansion or on more than an average size lot. $29,000! So you gonna move out of NYC and move to L.I.? Westchester? NJ? Rich people don't just relocate from NYC to Peoria or Burlington VT. It sucks, and more services should be cut and the city and state bureaucracies slashed, but you are still gonna have to keep the revenue flowing in. And right now there just ain't no where to hide from it.

Guy I work with pays $100,000 in RE taxes to live in... wait for it... New Jersey! Short Hills. No shit. Property is basically unsaleable.

NYC has been a tax oasis in the tri-state area. The gap is only beginning to close.

Lovely, I finally buy a place & now I'll have to pay even more taxes on it....great.

why are coop/condos taxed at a higher rate in nyc

long way to go before nyc property taxes approach those in suburban and exurban areas. but, of course, there is a huge business base in nyc that is not available outside of the city.

NYC property tax is one of the only revenue sources it truly controls. I believe they must go to Albany for a sales tax increase.

ILuv: If you didn't see this coming then you have had your head in the sand. It has been telegraphed on this site repeatedly not to mention the newspapers, every pundit, even the governor. You should have factored that in to your purchase. Hope you are prepared for the rise in all services associated with your purchase.

And those nutty people said the Reagan Revolution would only push taxation down from the Federal level to the state and local level. Crazy liberals!

Is it true that co-ops are assessed as if they had the same value as rental properties, including rent stabilized properties? If so, most Manhattan co-ops must be radically under assessed.

Moreover, aren't these increases just phase-ins of the increased assessments due to the bubble?

Do homeowners really think they have a right to be subsidized by renters forever?

Financeguy: yup, esp. prewar co-ops. Yes, people are missing the point about the increased assessment (don't expect many people to understand NYC prop. taxation).

How exactly are they assessed? I thought they used rent comparables to determine the value of the coop as if it were a rental. I went to the gov site and found the 2 buildings they used as comparables for my building. Both were rentals and they came up with a valuation per sq foot. The problem I see is that I believe there is a 5 year phase in and that is why even as property values are plummeting, assessments are still going up.

and you guys really believe that landlords wont pass these costs and a nice mark up on top to renters? You guys are crazy not to expect landlords to rapidly implement huge rent increases as soon as the market turns.....which it already is

petrfitz go take an econ class and then come back to talk to us!

samadams can you tell us about your experience owning properties in Manhattan? You seem to know so much more than anyone else on this board so you must have owned, rented and sold many properties.

You seem to know more than landlords like myself who has and still do several buildings full of rentals.

What experience do you base your posts on?>

supply and demand is a very simple chart with only 2 inputs. I am thinking you are having a problem with the theory side which can only be solved by going and taking an econ class.

so you answered the question. Your knowledge of Manhattan RE and rental properties stems from your vast experience in renting a studio apartment that you pay for all by yourself!

This truly makes you the next Roubini!

petrfitz is proof that nyc housing market has a lot more to go down. Its scary that people like this have not been weeded out yet!

ok you are correct. Manhattan is a perfect market for a renter to have the upper hand on the owner. There is no shortage of units in Manhattan. No one wants to live in Manhattan they would rather live in Jersey City.. There is a history of renters ruling the roost in Manhattan RE for hundreds of years. Renting is a sound financial investment. You are a genius samadams!

pet I Have been an owner and a renter. only a fool does not realize that now is the time to rent. This will not change for years but idiots like you read a trump book and think you are gonna be the next Manhattan Baron of real estate. You are gonna get run over!

Yeah I am an idiot 11 milllion times over....I am also your landlord and I dont like you so I am not renewing your lease. Please go find another rat infested studio to rent out while you are timing the market. We all know that market timing is a sound strategy.....

Pet must have been "The Art of The Deal"

Ignore that guy, he sings Celine songs in his skivvies and doesn't understand supply and demand, with a side 'we told you so.' next.

w67th are you saying that there is low demand for housing in Manhattan? Please explain to us in your genius. Can you compare the demand and vacany rates of Manhattan to any other US City?

oy vey

petrfitz, I actually agree with you that some landlords will try to pass on some of the increased tax burden onto their renters in the form of increased rents. The problem is it won't work - the impact won't be significant enough because rents are as competitive as they've been in a while now. The net result is that owners and landlords will be paying more. No harm in admitting that.

Celine singer, r u serious? Let me be nice. Hey did a study in silicone valley (boobs) where they showed when vacancy level is below 1% how it messes up 'rental' markets and rent go sky high, but as soon as the perception of slack demand and vacancy went past 1%, the s/d laws kicked right in. IMHO 2004-2007 was 1% in NYC 'psycologically'.

Year after year, one and two family homes face lower property tax increases than coops and condos. The average brownstone owner pays less tax than a one bedroom or even a studio condo owner. Is that fair? Supposedly single family homeowners get a break so "we can preserve NYC housing for the middle class." We all know that only the wealthy can afford to buy these single family homes, so the tax breaks are going to the rich, not the middle class.

w 67th - you are correct Silicone Valley with its low density single family homes are a perfect correlation for Manhattan's urban high density multi family buildings..... Also Silicone valley has a similar history of population over the past hundreds of years as does Manhattan...

We actually are having our first special assessment in years in order to deal with this. Stinks. Honestly, I feel poorer by the day. Everything is going up except wages...

And this was probably discussed elsewhere but why should I pay an MTA surcharge if I choose to take a taxi?

Re: w67th are you saying that there is low demand for housing in Manhattan?

Petr -- all I can say is that yesterday while walking the dog I passed TWO sidewalk signs advertising apartments for rent in very nice buildings near 5th and 14th. I NEVER seen these buildings advertise available apartments before. There's your lower demand higher supply = lower price.

lo888 other then taxes is other stuff really going up for you?

lo888, you pay an MTA tax so the masses don't drive their cars through the streets of Manhattan. That's what allows your taxi to practically fly across midtown.

west 34th can you explain vacancy rates? is it 0.05% or 10%? what is it normally over long periods of time and compared to other cities?

it is amazing that all you downers and renters speak about the increasing vacancy rates but actually have no idea what the rate is now or what the vacancy rate normally is. All you tools spouting "supply and demand" vacancy rate is the one data point you need to know and you dont. TOOLS........

i'm a power tool.

how about long-term net migration of wealthier residents? decreased inflow of high-earning people? increased development of rentals and units used as rentals? opening numerous rental towers that were expected to have subpar performance even when planned, but were developed anyway due to easy money and the belief that household creation rates would increase substantially over the next 5 years?

It looks like the vacancy rate in Manhattan increased to 1.8% in September and is projected to continue to increase due to high unemployment and new rental/condo units becoming available. Anything else you'd like to know?

http://www.crainsnewyork.com/article/20091008/FREE/910079987

http://therealdeal.com/newyork/articles/record-apartment-vacancy-rate-predicted-for-next-year

Oh, I forgot, YOUR buldings are different.

congrats you can google. Now if you had a business - any type of business and you were selling out over 98% of your inventory every year would you be panicking? or would you be estatic?

no I am not too different, my units probably have about a 1% vacancy rate this year. Previous years it was lower.

"any type of business and you were selling out over 98% of your inventory every year would you be panicking? or would you be estatic?"

Don't compare a business to an entire industry. No one owns all RE here. Clearly some people are hurting while others are ok for the time being. The point is it's trending in the wrong direction for slumlords.

"no I am not too different, my units probably have about a 1% vacancy rate this year. Previous years it was lower."

You would have to own ~100 units for this to be accurate. Doubtful.

Sam - Insurance costs are going up, taxes, cab fares, tuition, household help, laundry room, maintenance, etc...

Alanhart - how does that work (MTA thing)? Haven't flown down 5th Avenue in ages anyway. City seems more like a parking lot these days. And not matter how expensive they get, other than for a few months earlier during the recession, you can't get a cab anyway during peak hours.

petrfitz the more you add to this thread the dumber you sound.

BJW "You would have to own ~100 units for this to be accurate" do you want to take this statement back before I make you look even more stupid?

Petrfitz, two thing I don't get.

You claimed to have a net worth of $11M two years ago. You still claim to have that net worth. Is it because you think the value of your leveraged assets are the same as before? Or did you just make a crapload of income elsewhere?

Also, what/when was the last property you bought? I mean, you should be ecstatic and buying everything in sight since you think the outlook is great, especially with all the big new income if you've had it, right?

Go nuts, petrfitz. I'm a bit unclear on how vacancy rates are calculated (and from discussion on this board, I haven't seen anyone offer a good, detailed description), but if you're calculating this on a yearly basis (and from your own words: "my units probably have about a 1% vacancy rate this year"), you would need a minimum of ~100 units to achieve a 1% vacancy rate, wherein you'd only have 1 vacancy. If you're calculating each month as a separate transaction, then you could get there with at least 10 units, with only 1-2 months of vacancy across all units (which seems unlikely given what we know about you).

inonada - some of my properties have lost value but i never have considered my net worth based upon realtor estimates only bank appraisals. I have made money over the last 2 years to offset my market loses - rental incomes are up, I sold a stake in a business that I owned, and made more "salary" meanig normal income than I ever have before. This year will be my largest cash income year ever (not including any asset sales)

I am investing my money in a new company that I am in the process of starting up so I am not putting as much into new RE. But I do have my eye on some BK brownstones.

congrats BJW you now understand that percentages can be calculated on things that do have 100 items......duh,

Celinepet. Laws of s/d isn't changed by proximity to 42nd St. Celine, your god, couldn't sell out the beacon at $100k a ticket. West34, yes at these prices, manhaatan rentals are like $100k Celine tkts. There's demand at $10, not much at $100k.

Except petrfitz, I haven't seen a definitive way of calculating vacancy rates, like I said. It seems strange to calculate in terms of months rather than actual apartments, but maybe that's how it's done. I can see why a small-time landlord such as (supposedly) yourself might do that, but strikes me as odd to do it citywide, no?

inonada, the rental options are becoming quite fabulous.

i wouldn't buy this (although it seems to be a townhouse rental so not even an option), the floor plan is a bit challenged for resale, but it would be a very nice place for a family of three to rent.

http://www.streeteasy.com/nyc/rental/555512-rental-307-west-21st-street-chelsea-new-york

I'm guessing that over the long term maintenance and tax costs increase at about the same percentage rate as rents do.

We are probably living through a short to intermediate-term disconnect. But that's what market do.

I'm still seeing rents decline. Landlord profit margins are going to be squeezed even more.

Seems to me to be a pretty good time to be renting. Price-to-rent ratios still seem very high by historical standards.

Nice to hear you are doing well, petrfitz. I'd be very curious to hear when you decide to start pulling the trigger again on RE. Unlike many posters here, behind that acerbic exterior I like to imagine an astute investor. The fact that you are allocating your capital elsewhere at the moment confirms that thought.

On the issue of taxes affecting rents, there's certainly going to be pressure from the landlord side of the equation to increase rents, but I don't think the market gives a rat's ass. If cash flow issues of landlords had any bearing on rental prices, we would have seen a 50% increase over the last couple of years in terms of rents, not a 20-30% decrease. If you've got rent-stabilized units, that's another story, but free market rents are just going to respond to overall inflation, local incomes, and local vacancy rates.

petri- how do you have time to post here all day with all of that going on?

Apparently the tax increase isn't as bad as anticipated:

Property tax increase less awful than expected, but maintenance up 8 percent
http://www.brickunderground.com/blog/2009/11/property_tax_increase_less_awful_than_expected_but_maintenances_rising_8_percent

Flmao. Your net worth is determined by bankers? The same group thatz begging the Fasb for lenient 'valuaions' hoping this shitstorm passes?????? Omfg!!!!!!

Re: haven't seen a definitive way of calculating vacancy rates

Yes I can Google, and it seems like the standard way is to calculate it based on the frequency of the rent roll, so monthly in most cases. So if the Dry Lake Millionaire owns 50 units his vacancy rate would be 1% if on average one unit was vacant for at most 6 months a year.

w34th Vacant is a key word to understand. Its more like "unpaid" You can have units that are not lived in but are paid for i.e. deposits forfeit for breaking lease etc. You can also have units lived in but not paid for i.e. rent cheat.

AR, that's a nice place at a good price. It's in that quaint part of Chelsea with all the brownstones, right? I had it on my list of decent places back when I was looking, but at $7500 it didn't make the go-see cut. At $6350, I'd have gone to see it, but I'm pretty sure I'd have preferred my current setup. The place seems to have decent light, decent space, coziness, etc., but not enough "omph" for me. Seems perfect for a family. Have you seen it?

I agree with your general sentiment on "the options are becoming quite fabulous". I had a couple of experiences where my thinking was that at whatever they were asking, it was already a good price for a pretty awesome space, and then I'd negotiate another 10-15% off, and then I'd end up choosing something else. Really jaw-dropping places. I almost felt guilty, especially knowing what the place went for (buy and rent) a couple of years ago. The guilty feeling subsided quite quickly, though.

"And those nutty people said the Reagan Revolution would only push taxation down from the Federal level to the state and local level. Crazy liberals!"

Yes, because it has nothing to do with the morons in albany who have, what, doubled spending and can't run anything right.

Agreed... crazy liberals... ;-)

> and you guys really believe that landlords wont pass these costs and a nice mark up on top to renters?

Yeah, thats REALLY worked out well.

Perfitz, proven moron once again..... he's been saying this for years, as rents have continued to tank.

Moron.

eddiewilson/nyc10022/somewhereelse you are 100% correct. The power in Manhattan lies with the renters. It always has. The people who own Manhattan are at the mercy of the guy who rents the crappy studio apartment for $2K per month.........

inonada, i'm not really looking right now. have to see what happens here in PCV first. i was very surprised at the quality i found when searching, however.

"eddiewilson/nyc10022/somewhereelse you are 100% correct. The power in Manhattan lies with the renters. It always has. The people who own Manhattan are at the mercy of the guy who rents the crappy studio apartment for $2K per month........."

Glad you finally got something right, for once!

Yes, the folks who own crappy studios are absolutely begging people to take their apartments. Giving aways months free, not taking security deposits, etc, etc. They haven't been in this bad a position in decades.

and, yes... that is a "told you so"...

sorry, you lose again!

yup, looks like these landlords have tons of leverage... on top of the rent reductions, free months...
http://curbed.com/archives/2009/11/18/nycs_best_rental_offers_of_right_now.php#more

and these are the landlords with money.

The broke ones like perfitz are even more desperate.

perf is toast!

ferf was toast a year ago, now he's the burnt crud that only the oven cleaner nuke bomb can get off.

petrfitz = idiot