In 2019, New York property owners and developers dodged a bullet.
That seems like a crazy thing to say, given the state legislature’s landlord-crushing overhaul of rent stabilization that year.
But they also shelved a proposed annual tax on pieds-à-terre, increasing one-time taxes on luxury home sales instead. Industry professionals did not love the mansion tax, obviously, but it was better than the alternative.
In New York that is what compromise looked like: The real estate industry accepting what it considered the lesser of two evils.
Our other markets are now grappling with similar issues. Industry groups in Chicago are fighting to lessen the potential blow of “Bring Chicago Home,” a proposed transfer tax that they fear would wallop large commercial properties that are already struggling. The proposal, aimed at funding aid for homeless individuals, would raise transfer taxes on deals exceeding $1 million. It would quadruple the rate on sales of more than $1.5 million.
Last week, a city alderman pitched alternatives backed by office building trade group BOMA/Chicago, Rachel Herzog reports. One included a smaller tax increase on property sales above $500,000. Another spares real estate and simply provides more funds to address homelessness.
Meanwhile in Los Angeles, Measure ULA, which took effect in April, is in legal limbo. That measure added a 4 percent tax on property sales of more than $5 million and a 5.5 percent tax on those over $10 million.
An open question with all of these policies is how effective they would be in funding housing programs, or in New York’s case, infrastructure projects.
What we’re thinking about: Is it weird to set up an office tower’s sales gallery in a competitor’s office tower? Send a note to kathryn@therealdeal.com.
Programming note: The Daily Dirt is taking a break starting Oct. 12 and will return Oct. 24. See you soon!
A thing we’ve learned: Open Plans has an art installation at 66 Ainslie Street as part of the Open House New York Weekend event, which kicks off Oct. 21. The installation envisions NYC without parking mandates. The Adams administration has proposed eliminating minimum parking requirements in new construction.
Elsewhere in New York…
— Thirteen residents of Twin Parks South East in the Bronx were hospitalized Wednesday after breathing carbon monoxide, Gothamist reports. The leak occurred in a property owned by Bronx Park Phase I Preservation LLC, a group of companies that includes Camber Property Group. The group also owns Twin Parks North West, where a fire killed 17 people last year.
— A dozen migrant families allege that an employee of a shelter at the Holiday Inn Express on Staten Island cheated them out of thousands of dollars by promising leases to renovated and furnished apartments, the City reports. The employee, Cythia Guevara Rodriguez, was fired because of “serious allegations and evidence of dishonest and fraudulent activities,” according to the hotel.
Closing Time
Residential: The priciest residential closing Wednesday was $16.4 million for a condo at 400 West 12th Street in the West Village.
Commercial: The most expensive commercial closing of the day was $4.4 million for a 12-unit building at 87-13 and 87-17 Homelawn Street in the Jamaica Estates neighborhood in Queens.
New to the Market: The priciest residence to hit the market Wednesday was a co-op at 117 East 72nd Street in Lenox Hill asking $14 million. Brown Harris Stevens has the listing. — Jay Young
Correction: An earlier version of this newsletter misstated the organization hosting an installation at Open House New York. Open Plans is behind the exhibit.