Cash for NY’s Rich
Council’s odd tax rebates
THE City Council styles itself as more “progressive” than our progressive mayor. So why is Council Speaker Melissa MarkViverito pushing a giveaway to the rich — offering cash to the people who own homes in New York City?
The reason is worse than political pandering: She probably really thinks she’s helping poorer people.
MarkViverito’s move shows how impossible it is in New York to figure who is poor, who is rich and who is in between — but the city persists anyway in making taxpayers “help” people who don’t need help.
Last week, Mark Viverito gave her answer to Mayor de Blasio’s proposed budget ideas: Shewants the mayor to create a $ 250 annual tax rebate for homeowners. It will cost nonhomeowners $ 95 million. The idea is to make New York “an affordable city where homeownership is within reach for everyone.”
It’s something that the mayor might just go along with. It’s delicious, from his perspective, to show that he’s not only a poverty slayer but a middleclass taxcutter to boot.
And itwould be especially ironic to restart a program that Mayor Bloomberg started in 2004, just before his first reelection.
But it means that people who don’t own homes — the majority of New Yorkers — will be subsidizing the people who do own homes. Or, the poor giving to the rich.
Let’s see: In 2014, only 32.5 percent of New Yorkers owned their own homes. But that overstates the case.
Most of the people on Staten Island own their homes, and nearly half the people in Queens do. Almost all of Staten Island — and big parts of Queens — are more suburban than urban.
In Mark Viverito’s home territory, Manhattan and The Bronx, only 24.8 percent and 21.2 percent of people own their apartments or houses.
These lucky few have been, well, lucky over the past decade. The average owneroccupied home in New York is worth nearly half a million dollars. That’s more than double the value 15 years ago.
This is no surprise: A house is a financial asset, and the city has thrived over the past two decades. But why would you pay people who already own something valuable? We don’t pay people when their stock and bond investments go up.
And it’s not as if these folks need the money: The average homeowning household earned $ 80,000 in 2013, almost twice the $ 41,500 that renters earn.
The answer, supposedly, is the taxes. The average propertytax bill is going up $ 228 this year, because of higher property values — and the rebate just offsets that, MarkViverito argues.
But average property taxes were only $ 4,688 last year, according to city data, or $ 391 a month.
That’s a fraction of what Westchester and Long Island residents pay ( though city owners and renters alike pay city income tax.) And the city already phases in tax increases as market values rise, so people aren’t walloped with huge spikes.
Those who really pay property taxes are newer renters, because their buildings are taxed at a much higher rate. If you’re paying $ 1,800 a month, you’re probably paying $ 6,000 a year in taxes indirectly — for a property you don’t own.
MarkViverito would offer her tax rebate only to people making under $ 100,000 — but that, too, ignores the issue.
If you earn a valuable asset, you’re better off than people who don’t own that asset but who make less money.
A young Manhattan marketrate renter earning $ 125,000 would gladly trade income and assets with the person who earns $ 50,000 but bought a Brooklyn brownstone 30 years ago.
If property rebates don’t make financial sense, aren’t progressive and won’t affect most voters, why push them?
It says something about the political class itself. MarkViverito bought a Harlem home nearly two decades ago, and has watched it soar to a sevenfigure value.
De Blasio owns two Brooklyn homes worth nearly $ 3 million. Now living in Gracie Mansion, he rents one out to a family that must earn nearly $ 200,000 a year to afford the rent ( progressivism doesn’t start at home).
But both pols think of themselves as middleclass New Yorkers, not miserly rich property hoarders — as do all of the entrenched homeowners ( and longtime regulated renters) who complain about the “rich” new earners in their neighborhoods.
The newcomers have to be rich only because they can’t afford to be middle class like de Blasio and MarkViverito. They’ve got to pay today’s prices— and taxes.
Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.