New York's Most Expensive And Opulent Condos And Co-Ops Are... Empty

While in Manhattan overall, the number of non-primary residences is 29%; in some neighborhoods, favored by investors, such as Midtown, the share of nonprimary residences ranged as high as 44%. As The NY Times reports, however, the figures may be grossly underestimated, since the agency did not include apartment buildings that receive 421a tax exemptions, leaving out more recently built condos that are widely known to have high concentrations of foreign buyers, including One57 and 15 Central Park West. As one executive noted, "All you have to do is buy an apartment as a limited liability company and they can’t find you... It seems just ludicrous."

 

Executive Plaza - at 150 West 51st Street - has the highest percentage of non-primary residences of any building in New York at 74.4%!!

 

As The NY Times notes, the issue of occupancy in New York City has become a hot-button topic in recent months, with much made of foreigners who buy expensive apartments to use for just a few weeks a year. Some argue that they drive up prices, while others bemoan the fact that these buyers do not pay personal income taxes. A bill has been introduced in Albany that would impose an annual pied-à-terre tax on properties worth $5 million or more.

While the budget office research sheds light on ownership across the city, as The NY Post concludes, the true number of part-time owners is difficult to pin down. That is because buildings that do not receive the particular tax abatement the budget office examined were excluded. Many of these unconsidered buildings are recipients of a more lucrative tax break known as the 421a tax exemption.

“The I.B.O. data doesn’t include townhouses or 421a buildings, so there are a lot of misses, but of the condos and co-ops that are captured, the number of nonprimary residents is high,” said Andrew A. Beveridge, the president of Social Explorer, a firm that tracks census data and demographic information, and the chairman of the sociology department at Queens College.

 

To fill in the data gaps and to better inform the discussion about potentially taxing pieds-à-terre, the New York City Department of Finance has spent the past month examining the ownership status of units with the 421a tax exemption.

 

So far, it has been a tall order. “It is complicated, since there is no requirement that you have to be a permanent resident to be eligible for the 421a tax exemption,” said Theodore Oberman, the director of commercial exemptions for the Department of Finance. “So it isn’t something we typically capture.”

 

To overcome this hurdle, the agency is reviewing apartment ownership by looking at owners’ Social Security numbers along with their New York City personal income tax records. So far, it appears that in Manhattan, around 36 percent of apartment owners in 421a buildings are nonprimary residents and a slightly smaller percentage are primary residents. However, results are inconclusive because the remainder could not be identified.

 

The most likely scenario for the ownership veil is that the home was purchased through a limited liability company, or L.L.C., which does not require Social Security numbers. “All you have to do is buy an apartment as a limited liability company and they can’t find you,” Mr. Miller said. “It seems just ludicrous.”

 

As for the data that has been uncovered, “it reflects the increasing level of income inequality in the city, that you can buy a relatively expensive condo and not have to occupy it all the time,” Mr. Beveridge said. “Housing has a strange spending curve. If you are poor, you spend a high proportion of your money on housing. Then as you get up into the middle class, people pay off their mortgages and you don’t see as much spending on housing. Then as you get really wealthy, the rich spend a lot on housing, but they do it by having a lot of homes.”

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Won't someone please think of the poor Chinese & Russian oligarch's children!!!