38 minutes agoShareSaveAdd as preferred on GoogleMadeline Halpert
Getty ImagesOwning one home in New York City is a dream far beyond what many people could afford. But in one of the most expensive cities in the world, some people have not only a first, but a second, home.
The identities of those elite few – and others with expensive primary residences in New York – were made public at the end of July, as part of Mayor Zohran Mamdani’s plans to charge a “pied-à-terre” home tax – an annual fee for second homes in the city worth more than $5m (£3.7m), or condos and co-ops worth more than $1m.
That list, which identified people who the government said might have to pay the tax, became one of the main topics at a city council oversight meeting this week, which was called to address concerns about how it was rolled out.
City council member Gale Brewer said she and some other council members supported the pied-à-terre tax, but pointed to “challenges” with its implementation.
City council member Kamillah Hanks said the list unfairly targets homeowners and could be a security issue.
“A hit list of the haves and the have-nots – a scarlet letter,” Hanks said during a heated public meeting at City Hall on Tuesday.
Getty ImagesNew York City’s Department of Finance has said the addresses and personal information it posted were already available to the public, as data the administration is legally required to provide each year.
But Hanks said the administration was suggesting to people that their home ownership was something “to be ashamed of”.
The list included nearly one million properties, including addresses for celebrities and some of the city’s wealthiest residents, such as hedge fund manager Ken Griffin and his $239m penthouse, director Woody Allen, former Vogue editor-in-chief Anna Wintour and actress Cynthia Nixon. The city ultimately sent tax notices to 17,000 people.
At the hearing, others voiced support for the charge and accused their so-called “wealthy neighbours” of using the hearing as an excuse to complain about rising taxes.
“I think the wealthy homeowners here doth protest too much,” said Dave Backer, a professor of school finance.
Beverly Solo, a New York City resident of 44 years – who wore a shirt saying “Tax The Rich” – said the pied-à-terre measure could raise important money for city services.
“It seems reasonable and fair to ask those who don’t pay full-time income taxes here, but have luxury homes here for pleasure, to contribute to the wellbeing of New York City,” she said.
But, she added, the rollout of the tax had been “a mess”.
A group of New York City homeowners has sued over the rollout, asking the administration to unpublish the list of nearly one million properties and names.
Mamdani has defended the tax as a fair way to generate $500m in annual revenue in a city with vast socioeconomic inequality. The surcharge – which several other cities and countries have in different forms – has won the support of Governor Kathy Hochul, who previously was hesitant to raise New Yorkers’ taxes.
The mayor ran on a campaign platform of affordability, pledging to raise taxes to cover services like universal child care, and free and faster buses. His pledge to increase taxes has sparked backlash from some of the city’s wealthiest residents who claim it will discourage people from buying homes and investing in the US’s largest city.
Representatives for Mamdani’s administration did not attend Tuesday’s hearing, which angered some in attendance.
A spokesperson for Mamdani told the BBC the administration asked to push back the hearing while it dealt with the legal challenge, but the council declined and officials cannot testify on the matter while it’s being litigated.
Getty ImagesJason Haber, who runs the American Real Estate Association, said the list of names and addresses threatens people’s safety.
“Imagine the gift this is to scammers, to fraudsters, to anyone with ill will,” he said. He said a foreign actor could download the list and send an email to residents posing as the city asking for tax money.
Haber told the BBC he has seen some buyers pause searches for expensive properties in New York because of the new tax.
“It’s the surprise of this and the confusion of this that’s really pushing everyone over the edge,” he said. Haber said he believes the loss of tax revenue from fewer people purchasing pricey homes in New York would offset the effects of the pied-à-terre tax.
But Morris Pearl, a former managing director at investment firm BlackRock, said the idea that people were choosing not to invest in the city because of the tax was “absurd”.
“The whole point of being rich is you can live wherever you want,” said Pearl, a chair of Patriotic Millionaires, a group of wealthy Americans who advocate for taxing the rich.
“Someone who owns a residence that is not their primary residence that’s worth more than $5m has the ability to pay more than most New Yorkers do.”
Across the world, some countries and cities already experiment with similar secondary home taxes.
In France, homes are subject to an additional charge that varies across the country, with a 60% local tax surcharge for homes in Paris. The tax has generated billions of euros in revenue.
The city of Vancouver in Canada has an Empty Homes Tax on residences that are vacant or under-used for more than six months of a calendar year. The tax – 3% of the property’s value – began in 2017 to help improve housing affordability.
Research from Canadian think tank C. D. Howe Institute found the tax has raised as much as $194m in revenue in eight years, and has reduced housing vacancies by as much as 21%, but has done little to bring down the average cost of rent.
In San Francisco, California, residents in 2022 voted for an Empty Homes Tax, which required owners to pay between $2,500 to $20,000 for apartments that are vacant for six months or more.
But like in New York, the tax faced fierce opposition from real estate and landlord groups in the technology hub, and after a group sued, a judge found the tax unconstitutional. It remains in limbo as the city appeals.
Pearl said the New York City administration’s decision to launch the tax with a list of wealthy residents may not have been the most diplomatic choice.
“I do think that the mayor himself – I have suggested that he sort of unnecessarily antagonises people occasionally,” Pearl said.
But, he added, “I’m with him on the policy.”
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