LuxuryBlurb
Posts Tagged ‘Manhattan’
Tuesday, January 18th, 2011
 Posted by Leonard Steinberg on January 18, 2011
Co-op and condo owners are slated to pay much higher real estate taxes next year, under a preliminary assessment roll released on Friday by the Bloomberg administration. The city attributed the rises, due to take effect in July 2011, to higher market values placed on apartment buildings by tax assessors. Yet no-one is asking for their methodology, no-one is asking why co-op and condo taxes should rise by almost TRIPLE the mount of single family homes. CORRUPTION?
Did you know that New York property taxes have risen by 78% in the past 10 years? Of course, some have risen significantly less than this 78% and other significantly more……why? CORRUPTION?
Tax collections are expected to rise by 7.5% for co-op owners, and 9.6% for condo owners across the city, according to a summary report released by the Department of Finance, yet single-family homes would only pay 2.8% more. CORRUPTION? Is this because Mayor Bloomberg lives in a townhouse?
ALSO: No-one is questioning why some co-ops, condo’s and single family houses are taxed so extremely differently from one another, often in neighboring properties: When the assessors re-valued the entire city did they even look at or consider the disparity between properties? I doubt it. CORRUPTION?
Taxes on rental buildings will also increase significantly, the report said—by 9% for rent-regulated apartments and by 8.1% for unregulated apartments. Some of this tax increase is passed on to tenants.
This translates into an average tax increase of $384 for co-ops, $490 for condos, and $107 for single-family home owners. In Manhattan, the tax bill will go up an average of $594 to $9,351 for co-ops and by $970 to $11,348 for condos: How on earth is it possible to have this broad a range? CORRUPTION?
Finance Commissioner David M. Frankel denied that assessments were raised to increase tax collection, saying the department “performs a ministerial function valuing properties in accordance with state law and the best practices.” Oh, really! CORRUPTION?
The new assessments are not final. Taxpayers can ask the Department of Finance to make corrections, and can appeal their new assessments to the city Tax Commission. The deadline for appeals is March 15 for owners of one- to three-family homes, and March 1 for others. I strongly urge all property owners who are being unfairly assessed to rise up now and fight this corruption ONCE AND FOR ALL.
Owen Stone, a spokesman for the department, attributed about 30% of the increase in assessments on apartment buildings to improved earnings by the owners of rental buildings (in a market where rentals have dropped significantly over the past 24 months…..CORRUPTION?), and the rest due to technical factors, including a new, more accurate assessment methodology (PLEASE SHOW US THIS METHODOLOGY……PLEASE!), as well as lower interest rates on bonds, which are used in the calculation of market values.
Some of the increase in average tax assessments is due to new construction, renovation and expiring tax exemptions on individual properties.
Under state law, valuations of co-ops and condos are calculated as if they were similar rental buildings, though they are entitled to co-op and condo abatements, usually 17.5%.
Tax collections on office buildings were due to rise by 7.25%, according to the report. In total, city revenue was expected to rise by $900 million under the new assessments, Mr. Stone said. And what will we be using this $ 900 million for exactly? The MTA? The Sanitation workers bonuses? CORRUPTION?
Michael Slattery, senior vice president at the Real Estate Board of New York, said the steep increases were cause for concern and that he would be consulting with property owners.
“Some of the numbers look high, surprisingly so,” he said. “I can’t believe the market went up that much.” He says this after his OWN REPORT released just recently showed a slight improvement in pricing, but fails to mention that real estate taxes were never lowered when the property values declined.
The city also changed its assessment methodology for one- to three-family homes “to more accurately reflect sales prices,” resulting in some significant increases in market values of the most expensive homes in Manhattan. PLEASE SHOW US….WE SIMPLY DON’T BELIEVE YOU!
Market values of one-family homes in Manhattan went up by 16.3%, but because the assessment increases can only be phased in over many years, the assessed value for these homes rose far less, 7%. This translates into an average increase of $1,645 to an average tax bill of $33,132. PLEASE, PLEASE, someone, somewhere show us how one-family house values rose by 16,3% in the past year: WHAT PLANET ARE THESE IDIOTS LIVING ON?
In Queens, the city’s estimate of the market value of co-ops went up by 32.4%, with average tax bills to go up by 12.5%, or an average increase of $292.
So, dear taxpayers, if you believe everything our beloved City officials have spewed forth in this dumptruck of ‘facts’, go ahead and pay those taxes. If for some slight reason you question the legitimacy of these numbers, maybe now is the time to stand up to what I consider the MOST CORRUPT REAL ESTATE TAX SYSTEM IN THE WORLD.
Thursday, January 13th, 2011
  Posted by Leonard Steinberg on January 13, 2011
After a 2 year hiatus, ‘New Development’, the darling of Manhattan high end real estate is coming back with a vengeance! We hear new buildings such as the Extell’s Park Hyatt building, Harry Macklowe’s Park Avenue tower, 250 West Street, the Rudin’s St.VIncent building are all moving forward aggressively. Almost completed buildings One Madison Park shows strong signs of life and 245 Tenth Avenue is back on track for a Spring launch.
Everywhere we hear chatter of brand new projects, old projects coming to life, and buildings in limbo being resurrected. Based on the dreadful supply of quality apartments, this is happening out of necessity. The big questions are:
1) How will the banks view financing these projects? What will interest rates be by the time they close?
2) How soon can they actually be delivered to prospective buyers: do buyers have the will or the guts to commit now to a property that may only be delivered 18 months to 30 months from now?
3) With the expiration of the 421-A tax abatement program, will those buildings that don’t have a tax abatement have monthly carrying costs so high they scare off buyers or are unfairly dis-advantaged next to those buildings that do have the abatement because they were secured before the program ended?
4) Will buyers be equipped to buy again from floorplans? (see previous post).
5) What kind of pricing can developers realistically expect? Lets face it, the record prices of 15 Central Park West were only achieved when buyers could physically tour the building, completed, up and running. The value of the finished product should not be under-estimated.
6) Some developers of new developments in New York were culprits of delivering buildings that fell far short of the promises made in their sales offices: have buyers of New York property forgotten this already? Or have developers been forgiven and has trust returned? With the power of the blogs, I believe those developers that screwed up in the past will have to provide much greater assurances and incentives to provide sufficient confidence in their ability to deliver a quality building. Those that did deliver quality, will be handsomely rewarded.
7) Pricing: Labor and materials and land all cost less now than at the peak: will these savings be passed on to the consumer for the first group of buyers to incentivize momentum? I see no way around this. Those who take the biggest risk should be rewarded for doing so.
 Will the weak dollar save the day as foreign buyers view New York’s prices as ‘good buys’? Lets face it, in China the recession was a very brief moment…..these buyers are still quite used to buying off floorplans.
We believe the beginning will be tough, but will improve as buyers recognize the opportunity for buying a quality existing property is slim with the current limited supply.
Sunday, January 9th, 2011
 Posted by Leonard Steinberg on January 10, 2011
INSANE? The photo you above is just a mockup. But even with something just dreamed up in the mind of some crazed super yacht designer, you have to admit that it looks disturbingly appealing, in a Dubai-meets-Donald gawdy kind of way…..
This creation is called “The Streets of Monaco“, and is based off Monaco. Imiagine other versions based on your favourite part of the world: Capri, Manhattan, Rio, St Barth’s….. On the main four decks, you’ll find various pools, a swim-up bar, a jacuzzi, a replica of Casino Square, a courtyard and a large BBQ area. Oh, and a go kart circuit. The main boarding deck features a sauna, spa, manicure, gym, hairdresser, care and a relaxation lounge with indoor bar/pool.
Of course there is a cigar lounge, library, cinema wine cellar, casino, dining room and dance hall. Would Candy Spelling insist on the addition of a gift wrap room?
While it hasn’t been built (or even purchased), chances are someone, somewhere in the world is counting their oil profits (or Facebook over-valuation-profits) and seriously considering where they’d park this 155 meter (close to 500ft!)vessel. Maybe the most appealing aspect of a product like this would be it’s tax-free status? Those savings alone could easily pay for the entire product for the clientele this would appeal to.
Designed by Yacht Island Design in cooproration with BMT Nigel Gee. No price was mentioned but we expect it to be slightly higher than a penthouse at 15 Central Park West….
Friday, November 19th, 2010
 The penthouse at the Superior Ink building in Greenwich Village, New York, owned by Houston Rockets owner, Leslie Alexander, has sold for a record $ 31,5million according to the Wall Street Journal. But is it a record for Downtown? Yes and no.
The quadruplex combination penthouse at 200 Eleventh Avenue sold for around $ 33 million, also raw, in 2009, and while larger, hence a lower $$$/sf price, that selling price does beat this sale. The sale of the penthouse at 145 Hudson Street is another notable exception.
“It is nevertheless a testament to the ressiliancy of the Greenwich Village real estate market in New York, a zip code named one of the Top 5 by FORBES recently,” says Leonard Steinberg publisher of LUXURYLETTER and a managing director with Prudential Douglas Elliman. “The Robert A. M. Stern designed building boasts superb sunset views over the Hudson River, and is one of very few full service buildings in the area. It commands a premium for many reasons, but most notably are the views, services, quality of space and the Stern-cachet. I do believe the price could have been significantly higher if the space had been beautifully finished out, as there is always a market for SUPER-TROPHY-PENTHOUSES in Manhattan.”
Friday, November 19th, 2010
 Did you know that the waste produced from burning coal can be re-used to create portland cement?
Did you know that a incandescent light fixture replaced with a LED light fixture saves about 80% of energy consumption.
So while the world seeks some miraculous new source of energy, the rest of the world has discovered that ENERGY TECHNOLOGY is the new INFORMATION TECHNOLOGY. Yes, the ability to use the energy resource we already have, but create efficiencies within these resources is where significant strides can be made to reduce consumption and ultimately benefit the quality of life on earth.
I have friends currently in NEPAL where the air pollution is chronic: A visit to this part of the world would convince anyone that we have a responsibility to clean up our environment, and FAST. We have addressed this issue before in LUXURYLETTER, so what can owners of New York real estate do to incorporate ET into their world to individually and collectively make a difference? Here is out list:
1) Refine your heating and cooling systems: Converting a building from oil to natural gas to supply heating is a big one. Balance distribution throughout the building so that some aren’t cold and others aren’t opening their windows in the middle of winter to release excessive heating. Window AC units are grossly inefficient…..yes, someone at Historical Landmarks thinks these antiquated systems are good for facades (are they blind, or do the rest of us agree window unit are HIDEOUS!) but they are wrong, wrong, wrong. Units that go through the wall can be better, or best is a central system for efficiency. Thermostats timed to reduce useage when not at home can make a huge difference too.
2) Soon the cost benefits of Solar and wind generated systems will become meaningful. Already SOLAR GLASS is on the horizon: Imagine replacing all the glass in a building so that it generates about 50% of the electrical consumption? Yes the costs to do this will be high, but what is the cost of air quality that is so foul it kills us? What is the cost of treating lung cancer or asthma?
3) Replace incandescent lightbulbs with LED lightbulbs: yes, they are expensive to buy, but in Manhattan lots of us can afford this, and the longterm benefits are huge. They last 25,000 to 50,000 hours while regular incandescent bulbs last 1,000-2,000 hours. We don’t want to even mention fluorescent bulbs because they emit a vile quality of light, although for utility closets or laundry rooms they are super-efficient and with a decent tint, somewhat acceptable for humans. Regular fluorescent makes humans look ugly and we should boycott them in living spaces.
4) As electrical vehicles hit the streets, our needs for more electricity will rise rapidly: we had better be prepared before the next ‘brown outs’….. We have clean nuclear, wind, solar, gas, etc: lets use it wisely.
5) Insulation: properly insulated windows are a huge energy saver. New York real estate is notorious for cheap, bad windows: its time to replace them and insulate them properly when installed. Additional insulation throughout apartments can double energy savings. Anything that is leaky or drafty is no longer charming: it is damaging.
6) Use what you need when you need it: leaving a host of appliances running while away or not in use consume electricity: new technology will help you manage this better, but simple fixes are easy too. Un-plug that appliance with the bright green light that runs regardless of whether its being used!
7) New construction that ignores green building technology will probably sell for less than those developed by smart developers who see that energy efficiency is not only good common sense, but also REALLY GOOD BUSINESS.
In New York we do have the wealth advantage: remember, its not about the cost of money, its about the cost to our health and the health of future generations. Big buildings are much more energy efficient than individual suburban homes, so in that regard we are ahead of the game, but many older buildings, or cheaply constructed buildings have to do their part. Stop talking, and start doing. LEONARD STEINBERG
Monday, November 1st, 2010
 In this weekend’s New York Times, an interview with Frederick Peters, the head of Warburg Partnership, illustrates clearly how the world of real estate brokerage has changed forever.
“I remember a time many years ago when I started doing e-mail blasts to the brokerage community, announcing new properties I was listing,” says Leonard Steinberg, managing director of Prudential Douglas Elliman and publisher of Luxuryletter. “Frederick Peters called me, somewhat outraged that I was using the e-mail system to do this. At that time, even Warburg’s website was an annoying distraction. Now, Frederick Peters is on Facebook, Tweets and is as tech-savvy as any 18 year old tech start-up geek! Now with “Selling New York”, will he be the next Danielle Staub?”
One does have to admire a company leader that at one time may have remained stuck in the past, who now embraces the new world whether we like it or not. Whether we think Fred’s “Housewives-of-New Jersey-style-reality-TV” debut into “Selling New York” is something we think is great is a whole other story. There is no reality in REALITY TV, and unfortunately we think the distortions of reality are counter-productive. Then again, reality TV is the info-mercial of the 2000′s and can be food for brand recognition.
So while the old world of brokerage, the broker-to-broker chatter, the listing systems, the broker open houses, etc, will continue as from the past, now the web, blogs and all things electronic and cyber will be entrenched into the industry…..until the next great thing comes along.
Thursday, October 28th, 2010
 If you are walking near West 26th Street and 10th Avenue, look up. You will notice a new addition to the High Line—the Viewing Spur is starting to take shape. Crews have hoisted the 22-by-11-foot painted steel frame into place, giving us a hint of what will soon be one of Section 2′s most dynamic design features. The Viewing Spur is meant to recall the billboards that were once attached to the structure of the High Line. This frame, though, will enhance views of the High Line and the city, rather than blocking them as the billboards once did. The Viewing Spur will be surrounded by shrubs and trees, such as Flameleaf sumacs (Rhus copallina), sassafras (Sassafras albidum), and Greenbay magnolias (Magnolia virginiana ‘Greenbay’). At the foot of the frame, a platform with wood benches will invite High Line visitors to sit and enjoy views of the neighborhood. Meanwhile, passers-by on the street will look up and see people in the place of advertisements. We think it will be one of the best places for people watching when Section 2 opens next spring.
“Only when the extension of the High Line Park opens next Spring, will we see the true value of it’s ability to connect neighborhoods,” says Leonard Steinberg, publisher of LUXURYLETTER and managing director of Prudenital Douglas Elliman. “This park will connect the sensational gallery district of West Chelsea to the vibrant Meatpacking District and Greenwich Village. What surrounds this park will be simply amazing, and already we can witness the creation of an entirely new quality of life for Manhattan living.”
Saturday, October 23rd, 2010
 Is Downtown Manhattan the new New York SUBURB?
With 200 Eleventh Avenue, you have a garage attached to your own apartment……many full-full service buildings are becoming similar to suburban ‘gated communities’ affording even more conveniences than their suburban counterparts….think 101 Warren Street with its own Whole Foods, Bed Bath and Beyond and Barnes and Noble IN the building….in the suburbs you have to drive to those chains. Bicycle use has doubled in the past few years. Millions of trees have been planted, and parks are sprouting on every corner.
New York is becoming more suburbanized. You’ve got Home Depot, Costco, all the amenities that used to be reserved for the suburbs. The younger generation wants to live in Brooklyn, Hoboken, Chelsea, Tribeca, Soho and the Lower East Side, not in Westchester and Connecticut. Transportation from these areas to downtown is actually easier than to midtown. So when the decision makers are the next generations, it is likely that the importance of Grand Central to the decision makers will decrease relative to today. Advantage, downtown. It is fashionable to live and work Downtown….think VOGUE moving from Times Square to the Wall Street area.
“Convenience is the new luxury,” says Leonard Steinberg, publisher of LUXURYLETTER and managing director of Prudential Douglas Elliman, New York’s leading real estate brokerage. “Downtown dwellers love being able to walk to work. Walking is the one thing suburbs don’t allow. Downtown used to be all about manufacturing and finance offices: gentrification has changed that forever. A walk down a typical downtown street will include commercial lofts transformed into elegant homes, a doorman greeting guests…..tree lined streets, sidewalks with Mom’s or nannies with strollers, several Starbuck’s, only Downtown there is a strong infusion of unique boutiques and restaurants with an edgier flavor than Uptown,and certainly more interesting than the mix offered in Greenwich, Alpine or White Plains.”
Walk up Tenth Avenue from 14th Street and spot new condominiums and rental buildings by the dozen mixed in with hip, cool offices. Hudson Square surrounded by Tribeca and Soho features a substantial volume of media company office. Cross the street from Goldman Sachs and you land in Tribeca….stay on that side of the highway and you’re already in Battery Park City, and area that has grown tremendously in desirability. And all of this comes with greenery once only promised in suburban life.
Cut a commute from 1 hour a day to 30 minutes, and that adds up to more than a 5 day vacation per year…..
Friday, October 22nd, 2010
 SOMETHING THEY GET RIGHT IN PARIS.... A survey has just been released assessing the satisfaction of New Yorkers with their City…..Manhattan came out on top for some critical parts of the survey. Not only is it perceived to be the friendliest and safest borough, it is also considered to be the best place to live. On the down side, Manhattan was also overwhelmingly voted the least affordable…….
According to the DOT, 54% of all trips in NYC are less than two miles, and from 2006 to 2010 the number of bikes in the city doubled. As a result of increased bicyclists, new protected bike lanes are being added around the city.
“Every time we put down a protected bike lane, we see injuries for everyone go down 50%,” said Ms. Sadik-Khan.
“Bikers are completely out of control in the city,” says Leonard Steinberg publisher of LUXURYLETTER. “If the City is looking to make cyclists a growing mode of transportation AND raise revenues, I strongly suggest a clampdown on the lawlessness of bicyclists. Only yesterday I witnessed a cyclist run a red light and hit the white stick out of the hands of a blind person crossing the street! Why do the cops focus on car parking fines instead of biker violations that are significantly more harmful? Now its time to add secured bicycle parking everywhere and licensing too.”
Today the New York Times reports that a crackdown on cyclist lawlessness is underway, but….“It’s not always easy to do,” said Raymond W. Kelly, the police commissioner, who joined Ms. Sadik-Khan to announce the initiative. “Bicyclists move along at a very good clip. Particularly when a police officer is by himself or herself, it’s difficult to do.”
Tuesday, August 24th, 2010
 Something very newsworthy is happening in the luxury Manhattan real estate market…….for the first time in many years we have experienced (while renting out an apartment in Tribeca) prospective, qualified renters withdrawing their applications after realizing that buying would cost almost the same as renting, and opting to buy. We have not heard this in YEARS.
“To-day, figures will be released for housing sales in July, and they won’t be great. New York is a different market though, so what is happening in the US is not necessarily what is happening in our area”, says Leonard Steinberg, managing director of Prudential Douglas Elliman. “Our recent rental experience leads us to believe we really have bottomed, and from here the market stabilizes and improves.” Recently released rental activity reports indicate a rise in rental property inventory: but these reports are not very specific. Some areas and property classifications are actually experiencing shortages which will boost the cost of renting. The days of cheaper rentals in prime Manhattan areas are fading fast, epecially for larger units. Combine this with the MTA’s quest for sharply raised fares and one has to wonder where deflation exists in New York. If anything, this is inflation.
In FORBES, columnist John Tamny says don’t fear the housing market……There’s a growing consensus that another economic contraction is likely if home prices in the U.S. dip. The thinking here seems to be that if prices decline, the resulting increase in foreclosures would weaken already shaky banks that would either fall into insolvency, tighten lending standards or both. With bank lending already down, renewed weakness would supposedly strangle a nascent economic recovery.
Scary stuff for sure, but also arguably overdone. Most would agree that heavy investment in the housing sector helped get us into the mess we’re in, so for housing worriers to suggest that an artificially enhanced property market is our cure is to get things backward.
More realistically, the mortgage defaults and resulting housing weakness a few years back signaled an economy on the mend thanks to markets correcting overinvestment in that space. If economic growth is the goal, the best thing we could do would be to let houses and mortgage securities find their natural, market clearing level.
To do otherwise, as in if Washington continues to use limited capital to prop up housing, would be for our federal minders to elongate what remains a painful economic downturn. A housing correction, far from limiting growth, would actually constitute economic revival for underutilized capital migrating toward more productive pursuits.
When an individual buys a home, there’s merely a transfer of wealth from one person to another. This is quite unlike the purchase of shares in a public company, or the deposit of funds in a bank where an individual is transferring capital to existing and future businesses eager to expand. To invest in housing is to essentially transfer capital into the ground, whereas when we save and invest we provide entrepreneurs with the means to expand.
This is important in light of the housing boom of not long ago. It’s once again assumed that a decline in prices from what remain high levels would be economically harmful, but it could more credibly be stated that the not-so-long-ago rally in home prices was the recession for limited capital flowing into unproductive assets of the earth over productive assets of the mind.
To make what transpired not long ago clearer, tomorrow’s Googles, Microsofts and Intels suffered a capital deficit amid the rush to housing, and builders gorged on the capital that passed them by. This was no accident; rather it was the predictable result of policy from the U.S. Treasury in favor of a weaker dollar.
History shows that during periods of currency weakness, available capital flows into tangible assets least vulnerable to the aforementioned debasement. Ludwig von Mises referred to this phenomenon as a “flight to the real,” and it’s what has always occurred when monetary authorities seek a decline the value of the unit of account.
Looking at the decade just passed, the dollar’s impressive weakness drove up the nominal value of all commodity-like assets, with housing a natural beneficiary. Not only did this “money illusion” distort home purchases, but it ultimately created a housing glut as faulty price signals tricked developers and lenders into believing that home prices could only rise. Evidence of the overbuilding that resulted from monetary mischief is everywhere at present, with unsold and uninhabited homes dotting suburban landscapes across the country.
For the federal government to then use capital borrowed or taxed from the private sector to put a floor under home pricesnow would be for it to continue to distort real market signals on the way to more investment in housing. We’d be doubling down on an economic bet that previously helped put our financial system on its back.
The logical response is that intervention in the property space is necessary to maintain the fragile health of a banking systemthat would suffer mightily from another round of mortgage defaults. Fair enough, but this thinking ignores what little good the savior of Japan’s zombie banks did for its economy during its two lost decades, plus it grossly overstates the importance of traditional banks when it comes to the accession of credit.
|
Thank you for addressing the undertaxing of single family homes and townhouses and the overtaxing of condominium homes. It is completely unbalanced and unfair. The city needs to be held accountable.
The so-called “tenants rights” groups and their legislative kin need to held accountable for creating a system of rent control that reduce property tax income by more than $400 million. Spending is a factor, sure, but a good place to start is to have everyone pay their fair share.
Hey there! This is my 1st comment here so I just wanted to give a quick shout out and tell you I really enjoy reading your posts. Can you suggest any other blogs/websites/forums that deal with the same subjects? Thanks a lot!
The methodolgy of Coop and Condo assessment was enacted at ta time where most buildings where rental buildings in the city and there was no point of reference of individual sales to determine the value of a unit or building except the “value of an asset that would return a certain profit based on a capitalization rate”. If you look at the tax rolls, the rental estimates are ALL wrong as they compare building with rent stabilized rent wih Coops, Condo and who knows what. This is total Insanity. The value determined by the city has nothing to do with the real markeatable value of apartments and the methodolgy leaves so much to desire that it is virtually impossible to have a fair system. We have enough points of reference sales (Condo AND Coops) to be able to determine a fair market value of apartments. Also how do you explain a coop that sell for the same price than a Condo and the same price than a single home end up with such different tax bill. The law and consitution of NY state states clearly that every one has to be treated equally. Our corrupt government has found a way to treat people inequally and is doing nothing to change it. This is just outrageous and lame of lazy politicians.
Look at the related link portion at thr right of the commentary, included curbed, the real deal etc. All good real estate related information.
Has anybody realized that right after Bloomberg became mayor (2002), 2 years later (2004) he changed the name of the notice of assessments to notice of property value and removed the total property tax from the notice to make it more difficult to find your total real estate tax for that year. If you look at your assessments there is no more tax total on the notice