New York City is a place where a distinct lack of affordable housing meets a huge supply of luxury housing—much of which is not even used as a primary residence. The city's very richest are aghast at a proposal that their pied-a-terres be taxed.
This should not be all that controversial. A huge number of people who live year-round in New York City are unable to find affordable housing. At the same time, a small number of people who only live in New York City part-time are sitting on multimillion-dollar luxury apartments that sit empty for the majority of the year. I would prefer that we set a tax on these luxury second homes so high that it would dissuade people from owning second homes in the city, at least until everyone else has a first home. But even a modest tax would be a good first step.
And that's exactly what is currently being proposed in New York: a 0.5% tax on homes over $5 million that are not primary residences, gradually climbing up to 4% for houses valued at $25 million or more. If passed, it could raise $665 million a year, which could be used to pay for things like teachers and cops and roads and homeless shelters and other things that tend to benefit everyone who actually lives in this city. Bloomberg reports that the real estate industry and its many related interests are already lining up to oppose the bill, despite its slim chance of passage in the legislature.
I can think of no better illustration of the fact that we do not live in an actual democracy than the fact that all of this opposition is coming together for a bill that would benefit eight million New Yorkers, at the cost of... how many rich visitors?
[About 1,556 [apartments] would be affected by the luxury non-resident tax on units valued at more than $5 million...
More than 80 percent of the $665 million generated would come from 445 units valued at more than $25 million, whose owners would pay an average $1.2 million a year in taxes, said James Parrott, policy institute's chief economist.
Half a billion dollars for the people of New York just by taxing a tiny handful of non-resident zillionaires who have so much disposable income that they are able to own a palace worth more than $25 million that they don't even live in most of the time? No thanks. This is America.