How New York’s taxes drive up rents

Written By Unknown on Senin, 23 Juni 2014 | 10.46

Someone should tell Mayor de Blasio there's no award for political hypocrisy, 'cause it looks as if he tried to win it last week with his remarks on rents.

"I have urged very clearly and consistently that [the Rent Guidelines Board] think deeply about the affordability crisis afflicting our city," de Blasio blustered as the board mulls denying landlords any increase.

The mayor's appointees have already pushed the board to look only at possible increases that will be far below the growth in landlords' costs, which board staff found was 5 percent last year. It's entirely possible de Blasio will push through an unprecedented zero-percent hike for one-year lease renewals.

The mayor also wants the board to consider "the fact that even in some of the years when people were hurting the most…rent levels approved by the…board previously were quite high."

What de Blasio and his allies never mention is how much of the rent goes for taxes — in a city where taxes on apartments are among the steepest in the country.

Whether progressives such as de Blasio like it or not, those taxes dramatically increase a property owner's expenses. And anyone who intends to stay in business has no choice but to pass such costs to his customers, in this case tenants.

The city assesses "multi-family dwellings" (whether rental, condo or co-op) at the same rate as commercial buildings — often more than six times the rate on single-family homes.

In other words, a landlord with a brownstone of five apartments might pay as much as $40,000 a year in property taxes, while the family in an identical brownstone next door forks over perhaps $7,000. If those five apartments rent for an average of $1,500 per month thanks to the rent laws, the landlord earns only $90,000 annually — with $40,000 of that going for in taxes, before he even considers such outlays as a mortgage or insurance.

(And, yes, the "market" rent for those apartments could be $3,500 — but that's how the rent laws work: People who don't move wind up with a pretty good deal, while those who are just coming to the city, or simply have to have a bigger place, are stuck bidding for the relatively few apartments that open up.)

Tenants seldom realize how large a chunk of their rent the city gobbles; like the mayor, they blame landlords instead. And politicians happily exploit that hostility.

Meanwhile, the single-digit increases the Rent Guidelines Board dictates each year usually trail far behind the annual escalation in property taxes.

Taxes aren't the city's only shot at devouring tenants' money; the politicians also control the Water Board — which has been raising rates an average of nearly 9 percent a year for the last decade, to the point where water bills will add $645 to the cost of an average apartment this year.

Along with taxes, it's just one more hidden cost that most tenants never even think of.

Rather than hectoring the Rent Guidelines Board to restrain landlords' supposed greed, the mayor should restrain the city's voracious appetite for tax dollars.

Becky Akers' novels set during the American Revolution, "Halestorm" and "Abducting Arnold," are available from Amazon.


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