As a former editor, I am inclined to correct mistakes. On social media, this is like using your fingers to plug a million holes in a crumbling dike.
On Twitter (I still call it that), most of the laymen commenting on New York real estate get something or everything wrong.
Take Mayor Zohran Mamdani’s semi-socialist supermarket in East Harlem. It certainly deserves scrutiny, but inane criticism deflects attention away from the real issues.
One well-read thread insisted it makes no sense to spend $30 million constructing a store when you can buy one for $3 million. Mamdani’s $30 million estimate is inexplicably high, but $3 million buys a lease, not the land and building. Totally different transaction.
The right questions are:
- What should it cost to build a 9,000-square-foot store?
- How much will the operating subsidy be?
- Would this taxpayer money be better spent some other way?
- Is there a better use for the city-owned development site, which is close to a supermarket and several grocery stores?
I believe the entire premise of Mamdani’s supermarket is wrong. The price of food staples such as grains, vegetables, fruit and milk is not the reason many New Yorkers need food stamps and buy processed foods. Selling discounted rice and beans will make virtually no difference.
On another hot-button topic, supporters of Gov. Kathy Hochul’s proposed pied-à-terre tax posted disingenuous comments insinuating that second homes are not taxed at all.
Check out this one from Ryder Kessler, a Democratic candidate for Assembly in Manhattan: “Let’s tax empty second homes in NYC even if they’re only worth ~ a few million dollars ~ and not just $5M+.”
And this one, with a re-post of Mamdani’s Ken Griffin–mocking video endorsing the proposed tax: “i hate to say it but a 1% tax on property over $5m you don’t live in is hard to argue against for the average voter.”
The writer neglected to say that the new tax would be tacked on to the sometimes hefty property taxes that luxury condo units already pay.
As Newsmax’s Rob Schmitt tweeted, if this $5.9 million two-bedroom at 53 West 53rd Street sells for its asking price, the transfer taxes would be $132,000 and the new owner’s annual property taxes would start at $5,247 a month.
That’s before the Hochul/Mamdani “surcharge.” Newsmax is known for far-right spin, but Schmitt got this one right.
If Mamdani fans want to argue that luxury pieds-à-terre should be taxed more, they should make an honest case — not pretend second homes aren’t already taxed.
Mamdani doesn’t say that explicitly but he certainly implies it. He asserts that luxury pied-à-terre owners don’t contribute financially to New York but reap “huge financial rewards” from the city because their property values keep going up.
Neither claim is true. Non-resident owners do pay property taxes, and property values sometimes go down.
Remember the condo glut that lasted for several years just before the pandemic? Resales of luxury units bought during the preceding condo boom were almost always at a loss.
Even now, if you read TRD Data’s daily report, you’ll find that many high-priced units sell for about the same or less than they did previously. Factor in sales commissions, transfer taxes and property taxes, and luxury condos are clearly not delivering “huge financial rewards” to buyers.
From an investment perspective, buying a New York City apartment for $5 million-plus (or in Griffin’s case, $238 million) is risky, especially given the high annual expenses and transaction costs. These are trophy purchases. It only makes financial sense if the alternative is risking seizure of your assets by your home country’s government.
The problem with falsehood-ridden arguments — despite being a major time-suck — is that they distract us from the fact-based debates needed to craft good policies.
Here are three legitimate questions about the pied-à-terre tax:
- How would the government determine whether an apartment triggers the surcharge?
- How would the surcharge be collected from individual shareholders in co-ops, where the whole building pays a single tax bill?
- Can the city create and implement a system to accurately value homes before its fiscal year starts July 1?
The commentary on social media rarely answers questions like these. I really need to stop going back there.
Read more
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Mamdani crackdown targets condo and co-op tax cheats
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