Mayor Zohran Mamdani said in an interview last week that he still thinks the pied-à-terre tax will raise $500 million in its first year, as the legislation was supposed to.
I have seen nothing to support that claim, however. On the contrary, evidence that revenue will fall short keeps piling up.
The original projection was that the tax would hit 13,000 properties. After the law passed, an analysis by the city comptroller’s office predicted it would only hit 11,200 and raise $340 million to $380 million. Then exemptions granted by the Department of Finance dropped the number below 9,000 homes.
More exemptions are likely on the way, once Tax Commission cases are heard.
The pied-à-terre tax rate cannot be changed by the city to make up for the shortage of taxable properties. Nor will either candidate for governor agree to raise taxes in the next legislative session.
One thing the city could do is jack up assessments, but not retroactively. And assessments of Class 1 properties — the only ones subject to the tax — are done by computers, not by human assessors. Moreover, owners can challenge their assessments at the Tax Commission, which is independent of the mayor.
On top of all that math, three lawsuits against the tax are pending. Any success by the plaintiffs could further reduce its first-year revenue.
There’s simply no viable path to $500 million. The mayor should admit that the city hopes to make up the difference thanks to strong tax receipts from Wall Street.
My guess is that the mayor is sticking with the projection of $500 million because he can’t be definitively wrong until a year from now. It’s like predicting the Mets will win the World Series.
————————————-
What we’re thinking about: Tom Fox objected to my characterization of the City Club’s proposal for the Brooklyn Marine Terminal as “The Nothing Plan.”
“Our proposal is not anti-housing. It is pro-maritime, pro-industry, and pro-jobs,” he emailed me.
But it has no housing. No housing is anti-housing. Surely there is room on the Red Hook-Cobble Hill waterfront for more housing, along with a maritime operation.
Fox, a City Club board member, says it’s a serious plan for a serious issue: the transportation of goods. I know Fox from way back, so I know he’s a serious person — something I cannot say for City Club’s leader, Layla Law-Gisiko, who campaigned against City of Yes with far-right conservative Vickie Paladino. But Fox says Law-Gisiko had nothing to do with the plan, which the organization’s waterfront committee made.
“Importantly, the Mayor’s Office of Environmental Coordination has committed to including an all-maritime alternative in the project’s Environmental Impact Statement,” Fox wrote. “Our work is intended to inform that examination.”
Reality check: The EIS is purposely broad to avoid lawsuits alleging it ignored alternatives. Proposing a zero-home alternative to a 6,000-home plan during a housing crisis renders it unlikely to be taken seriously. Politically, no plan will advance without housing. This is one time that politics and reality are aligned.
Read more
Pied-à-terre tax twist: Primary resident hit with $47K surcharge
No solutions in sight for co-ops’ pied-à-terre problem
Lawyers scramble to exempt misapplied pied-à-terre tax
