Comment by bradleyjg | Hacker News Reader

Comment by bradleyjg | Hacker News Reader

Parent Full thread

A few points.

First, I agree 421a is ludicrous, which is why I don't see why you credit NYC for "extracting concessions like low and moderate-income housing". 421a and similar programs trade billions of dollars in tax revenue that could be spent on everyone for hundreds of thousands of dollars in rental subsidies handed out to a few lucky lottery winners. That is terrible public policy. A park or subway station improvement is a little closer call, but cash ought to be the gold standard.

Second, I'm not sure I care whether billionaires buy castle in the sky in midtown or townhouses in Greenwich Village. I wasn't going to be able to afford the townhouses anyway. It seems like the people most concerned about billionaires bidding up property are the centimillionaires being priced out. 100 units, even extremely large units, are a drop in the bucket for NYC. The knock-on effects are just not that large out in the places where the middle and lower classes live.

Finally, in terms of extracting more, I think the in-kind programs are both inefficient and a massive opportunity for corruption. I'd much rather see all the special deals -- parks, affordable housing, etc. eliminated and property taxes that reflect reality imposed, with perhaps a small pied-à-terre differential. The billions of dollars of missing tax revenue would be a lot more valuable to NYC than a few more housing lotteries or a small park, if for no other reason than you can subsidize rentals with cash but you can't fix potholes with subsidized rentals.

Right, but a rich person with lots of money to throw around would buy three a three unit townhouse and price out three families just to keep it empty 80% of the time -- This is the value of midtown luxury building construction -- it draws a remarkable amount of the money away from pricing out actual new yorkers.

I agree that we don't do enough -- that's why I said that twice. I was simply adding that there is some value to construction of luxury property buildings, and perhaps insinuating that if we went so far on taxes that none of these got built, we would be worse off. I don't know where the actual trade off is -- again, we're well beyond it with 421a.

> Right, but a rich person with lots of money to throw around would buy three a three unit townhouse and price out three families just to keep it empty 80% of the time

Sorry but what's wrong with that? We have land tax for exactly the same reason. If someone is willing to own the expensive apartments (and the expensive land that they build upon) and pay the taxes, why is that a problem?

I guess I don't see how gentrification is a problem at all. If Manhattan is expensive, people should move out. This is a genuine question. Why should they live there if they can't afford to live there? Is it a good use of public resources (policy makers' time, potential tax income etc)? Honest question.

Well the big thing is that most people can't just move if they want to. They have their jobs, and (especially if they're older) it might be really hard for them to get an equivalent job elsewhere. So moving will already cost them money.

The second part of this is that it costs a lot of money for these people to move/be without income. So for some, they might just be too poor to move, and suffer with diminishing disposable income as the price of everything else around them rises.

I think the core of the argument is that it's not like these rich people came into a barren land and built giant apartments. There are many people in NYC that simply live there, and why let these billionaires come in and make everything more expensive?

I think that's the crux of the counter-argument. I think that a combination of proper tax brackets, loose zoning regulation allowing for high-density housing + commercial mixes, and primary-residence rules can solve the problem.

I think the central moral argument is that having giant empty houses in the middle of a city with a community trying to do otherwise isn't exactly useful for society as a whole (see Detroit) , so we should disincentive it as much as possible.

>I think the central moral argument is that having giant empty houses in the middle of a city

Raise property taxes if you don't want property to be left unoccupied.

I sympathize with people who are already living there but it just doesn't make any economic sense to give tax breaks to benefit a small population that's already living there. There is no benefit to the population at large to prevent an incumbent population from getting priced out.

The goal should be to increase the supply of cheaper housing and make it abundant. I doubt it is possible in Manhattan today. Why not do it somewhere close by where they are not likely to be priced out? Instead, we build things like the east rover ferry which is clearly intended to raise the rent in apartment complexes midtown and first avenue...

I think the trick is to raise property taxes on un-occupied/secondary housing, because if not you're just raising taxes for everyone.

I doubt the people already living there is small. Most people don't really move out of cities they grew up or went to college in. So we're talking about a substantial chunk of the population. There are cultural arguments for protecting the incumbent population.

Like I said, that's the counterargument as has been presented to me. It's not black and white (obviously). I think the proper solution is stronger transportation and making other areas more livable. But there's a strong argument for making real estate not become just an investment vehicle (literally rent seeking!), and make it more about actually housing people.

Why don't billionaires build palaces in Iowa? Regular income folks build amazing cities, and then rich folks move in and crush the cities and price everyone else out, and often don't even live there, just put up empty properties that drain local commerce.

"Raise property taxes if you don't want property to be left unoccupied."

Yes, that's what everyone is saying.

Manhattan still needs the lower and lower-middle class folks to keep it running. Pricing them out of the city means they live farther away, causing:

1. An increase in their commutes, causing a decrease in wealth. 2. A decrease in their effective wage per hour spent "at" work (I include commute time here because it's time committed to employment), reducing their financial productivity. 3. A decrease in time spent with their families, which research shows negatively affects piles of aspects of family life and child development. Reductions in parental content affect emotional health, reduce academic performance, increase likelihood to make poor decisions vis a vis the law...

Housing price inflation depresses factors for success in families that can't keep up. A shiny bus stop or subway station is a lot less valuable to the community than a janitor spending an extra hour with her/his family at the end of the day.

If the people moving in weren't leaving their property empty most of the time I could almost buy this, but why should a long term resident move out to give a billionaire an extra holiday home?

Just increase property taxes higher if the billionaire's behavior is unacceptable. At some point, they will get priced out as well.

Do I have the right to live somewhere forever if I rent an apartment?

Yes, that's what the story is about -- excessive/vacant properties should pay progressive tax. Just like how cities condemn shoddy apartments and hand them out for redevelopment (Kelo)

The article isn't even calling for a progressive tax or an absentee differential, just that the new ultra-lux condos shouldn't get a tax break of 90+%.

That seems like a no-brainer to me. About the only argument in this thread against it is from zaroth (https://news.ycombinator.com/item?id=9534802). He says that these buildings wouldn't be built without the tax break. I'd be willing to consider the possibility, but I'm unconvinced at this point.

You seem to be arguing that the solution here to make sure everyone is priced out of the market, and no one should be able to live in these properties. I'm not sure how that helps anyone.

> I guess I don't see how gentrification is a problem at all

Often it's how the situation got there in the first place. For example, in one suburb in my city a few landlords who owned apartments started renting to "undesirables" - illegal aliens, prostitutes and known drug dealers. This brought all kinds of problems because the area became known as a "safe haven" for petty criminals.

This drove down the market values of all the properties in the area, which is of course what these landlords wanted. After people started moving out they started purchasing properties and land all over the area and when they were comfortable enough with what they had, they enlisted the help of the police to evict the undesirables (and thereafter push up rent). With more properties under their belt, they had more say in the rate payers association, which meant they had more power to vote on things that worked in their favour rather than the original residents. I'm sure you can see where things went from there.

The other side of things is also what gentrification usually implies - destruction of communities. But let's leave that for another discussion...

You are saying that the presence of low income housing causes its own destruction? Then how will low-income folks ever find housing?

I'm not saying that at all. I'm stating a real-world scenario that can lead to gentrification.

- Unscrupulous landlords intentionally drive down the price of property (this is NOT "low-income housing")

- They purchase the under-valued properties in bulk

- They increase rentals, prices and use power gained from the rate-payers association to force poorer people out, and to make it harder for them to move in

Furthermore, you can live on an expensive property and not be wealthy. That's not the same as buying a cheap property. Case-in-point: Families that have lived on the outer-skirts of a growing city for several generations. When they moved in the properties were relatively cheap, and rent was low. As the city grew, the land value increased. This does not automatically make them wealthy, and the increased prices does not automatically mean they will want to sell their properties or move out.

As a few people below have pointed out in various ways, this is a pretty absurd perspective. Quality of life is highly influenced by stability, and being priced out of an area where you're trying to raise a family is the opposite of stability.

Is the point of a city to relentlessly grow and attract money, or to provide a good place to live for its residents?

Reply on news.ycombinator.com