Why the Doorman Is Lonely

On first look, it seems almost unfair, that some people can keep second homes or pieds-à-terre vacate in a city as expensive as NYC. Some would argue that those owners should pay more in taxes; but even if they do, I seriously doubt the effectiveness of such regulations. For those who don't mind keeping properties worth millions of dollars vacate, how much do you plan to tax them until they feel the hurt?

As to the arguments of rentals, the arguments against those owners make even less sense. Afterall, not all landlords are billionaires (though they might be sitting on the properties with assessed value that could reach the million-dollar mark), most of whom are just middle-class, by NYC standards, as the article has rightly pointed out.

This is pure capitalism at work. For those who have money, they buy. For those who don't, they pay rent or they move out (when they can't afford it anymore). It's all a game of monopoly.

Is it time to requisition empty apartments and resettle the homeless?

Just talking about this possibility could cause people to make better use of the space, rent it out, or live there.

No poor people (or even middle class) are competing for these units - so the idea that this contributes to "income equality" is very faulty.

As to the tax - what do people think would happen if Florida implemented a "snowbird tax"? They probably wouldn't want to send residents to Arizona and lose out on the revenue altogether.

RIP: NYC as a place where middle class people lived and worked...

as others have noted, the author seems a bit confused by what her own data entails. even though 25% of the nyc apartments are not inhabited by their owners, that doesn't mean they're empty. for example, my small three-apartment greenpoint house is owned by a landlady who lives in manhattan. so my apartment, and the other two in the building, fall in the 25% category quoted in the article. but they're not empty - far from it. seven people live here, and if we had a doorman, he would not be at all lonely.

according to the author's logic (or lack thereof), all rental buildings should count as unoccupied, because the owner doesn't live in them! but that claim would be absurd, of course.

i understand unoccupied apartments are a contentious issue right now in nyc, but unfortunately this article contributes nothing useful to that conversation.

...what about requiring that one be a taxpaying U.S. citizen or permanent resident of the U.S., at the very least, before one can own these properties?

Yes, one of the hidden evils of rent control.

It strikes me that a reasonable compromise would be to mix (i) significantly increased real estate taxes on non-primary residential units, and (ii) a more accelerated phasing out of rent controlled / rent stabilized units, which simply create "lottery winners" and increase the costs of real estate and rentals for everyone else. Both these initiatives would increase supply and reduced costs for market rentals and sales for city residents.

The way these statistics were gathered, they include as non-primary residential use apartments occupied by controlled and stabilized tenants who did not buy in a conversion of a rental building to a co-op or condo, because those apartments are not eligible for the co-op and condo tax abatement (more than 25 years after conversion to a co-op, about 8% of the apartments in my building are in that category). Hard to tell what portion of the 24% cited in the article are in that category.

The remainder fall into at least three distinct categories: investment/rental, second homes for people who live in the N.Y. suburbs and want to be able to stay in the City on a part-time basis (e.g., when they work late, go to the theater or want to avoid commuting) and pieds-à-terre owned by the very wealthy who keep multiple residences. The last category attracts lots of commentary, but involves a very small portion of the city's housing stock.

Hard to see why this is an issue, apart from Airbnb and other transient rentals, which are generally illegal in apartment buildings. Is it just envy?

I believe there is a very easy fix here. Make all persons subleasing or co-oping these spaces in the heavily affected areas buy a licence to do so. If not the person in residence will have to relocate. In this way you are creating a data base for these residence and collecting funds; in lue of a tax. Make it annually renewable and have large fines for those who are found in violation. It may take time get it all set up, but in the long run the revenue intake will balance it all out.

HPD has created programs for specific buildings (many of them very nice in great neighborhoods) that are supposed to build stocks of affordable housing by offering big discounts on sales prices in return for residents using them as primary residences. There's actually an enforcement mortgage on the properties that provide financial penalties.

However, many buyers simply turn them into investment properties without ever living there. This not only waste ten of millions in tax dollars, but also deprives middle class New Yorkers of affordable housing stock. While people can debate whether pieds-à-terre or Russian oligarch apartments should be taxed, these fraudsters are clearly harming the housing market.

What intrigues me is that Ms. Kuruganti rents her place and makes a nice profit for herself and the tone of this piece is that it's just great. So why is it when real middle class people who are having trouble making ends meet, rent their place on Air B & B for 1 or two weekends a month so they can pay their bills, why are they made out to bad and that what they are doing is wrong? Owners can make a profit but renters who really need the money should be demonized as takers.

The city could start by not give 98% tax breaks to billionaires living in apartments costing $100 million. That would help a lot with property tax revenue! Then the City could stop subsidizing billionaire rows all over the city. The City could stop allowing more and more luxury housing to be built while sacrificing neighborhoods and small businesses. Let's start somewhere we can win! Discriminatory taxes won't fly and will cost millions to litigate. Looks good politically but that is all it is a political pose.

If someone wants to buy an apartment and then sleep in it 365 nights per year, 180 nights per year, 30 nights per year or 0 nights per year, it’s none of our business to tell them they should be doing otherwise or to tax them for doing what they are (or are not) doing. They used their money to buy their apartment and they can do (or not do) whatever they want with it.

I imagine what NY would be if there were no investment properties or second homes allowed. It would definitely be much more vibrant and interesting. It would also include me. I'm "rich" according to Obama but as well as we have a kid, we will be moving away from NY and probably looking for an employer out of the city to avoid paying commuter taxes. It's a bit ludicrous as I know most would think I'm rich/wealthy, but I can't afford to stay in Manhattan at $7K/month for a medium sized 2 bed room apartment. The streets here aren't clean like Singapore and you don't get cheap help like you do in Asia either. I will miss the delivery though (although I'm sure in 10 years they will all be converted to Chinese owned condos with the number 8 in their address).

More tax breaks and loopholes for the rich that inflate the price of real estate in New York.

I understand the problem described here, but it's also true that a long commute is a top predictor of unhappiness. It really does make sense for some people to have a weekday apt in the city even if they'd like to live in a more livable place (grass, quiet, etc.) on the weekend. Such people aren't necessarily rich at all - if they were rich, they wouldn't have to work.

This article produces nothing but confusion. It conflates two quite different things: apartments that are mostly vacant because their owners use them as pieds-a-terre and apartments that are not occupied by their owners but instead rented out to full-time tenants. The first produces the lonely doorman; the second, a new class of landlords. Presumably it's the first that we care about, in which valuable real estate is used for buildings with mostly empty apartments in city with a housing shortage. So far as I can tell, the article provides almost no useful information on this phenomenon.

Apartments owned but rented out should not be lumped together with pieds a terre--by that logic, every rental unit in NYC would qualify. In order for these data to be informative, disaggregate different categories of non-primary residences.

And perhaps surprisingly, the data indicated that “the vast majority of pieds-à-terre are middle class,” Mr. Miller said. “They are owned by people who have a studio in the city and a home in the suburbs, or maybe it was their first apartment that they chose to keep and rent it out.”

Is this a joke? Middle class people do not have second homes costing $750,000. They do not have one home that costs $750,000.

This article felt a bit desperate to find something objectionable. Some people buy apartments as second homes. Some people buy apartments as investments and rent them out. How is this surprising?

I know there's a concerted effort to paint NY as a place filled with empty billionaire mansions, but it's simply not the case. The space is too valuable; if you own it and don't live there, you're probably renting it to a resident.

A far more important issue is the fact that NYC Real Estate Tax Rates on Class 1 buildings pay tax levy rates that have not changed since 1981. Half of all NYC property value belongs to 1-3 family homes, yet they pay only 15% of the annual $21B in RE Taxes.
Is it fair that a 2.5M brownstone in Park Slope pays 7K in taxes while a townhome in 500K Cypress Hill pays 7K in taxes?
Making this system fair could raise $4 Billion per year in taxes. The empty condo phenomemon is certainly worth addressing, but should not be as great a red-button topic as the unfair and ancient system of NYC RE Tax.

Mr. Miller, Why is it ridiculous that a person can buy an apartment in a manner that prevents people from prying into their private business?

And so we discover, dear bewildered born-here New Yorkers, what makes Manhattan feel so creepy and macabre lately . . . like a Ridley Scott movie set . . . I just love the way the real estate industry can destroy an entire megalopolis like Manhattan in less than a decade . . . don't you?

Talk about casting your pearls before swine!

The attitude of coop boards are changing. Apparently the AirBnB ads are correct, New Yorkers love AirBnB.

What could be better. Rich people buy an apartment, pay the mansion tax (only NYC can call a tiny apartment a mansion just because it cost $1M), mortgage recording tax, etc and then do not use any city services...the city is the one who should be paying them!!

Thank you for writing about this. It is infuriating. Like many in the middle class, my partner and I have been looking unsuccessfully for a reasonable place to live for years. We even have a rent-stabilized apartment to set free if we can ever find a co-op we can afford that isn't pulled out from under us by another investor who plans to rent it out or flip it. These non-resident owners reduce the inventory of available co-ops and condos and also drive up prices; meanwhile, they do not contribute their skills to the local work force, don't spend their money on local businesses, don't patronize our cultural institutions, don't pay taxes. Why, they don't even contribute to New York's street life. Why does it seem like everything favors them over those of us who have invested our lives in the city we love?

This is definitely an area worth analysis. The goal should be to ensure that apartments do not sit vacant while maximizing the benefits to the City's economy.

One possible solution would be to significantly increase the real estate taxes on apartments where there are no residents paying New York City income taxes. There should be no problem if a non-resident owns an apartment as long someone is living there who pays income taxes. If the apartment is vacant, a valuable apartment is off the market for rental and the City is losing income taxes, which are both problematic.

New York has very high taxes on hotel rooms. There should be similar high taxes on apartments that are left vacant and that are not generating revenue for the City or enabling tax-paying citizens to live there.

At a minimum, there should be a requirement that you have to be a permanent resident to be eligible for the 421a tax exemption.

How are these owners are able to rent out for such long periods of time? I know condos are different than co-ops, but a lot of co-ops require owners to move back in after a certain amount of time. Perhaps this varies greatly among buildings.

Mention of the Parc Vendome has me traveling down memory lane. My grandparents lived there for decades. The building was huge and I remember as a kid in the 1970s it was kind of dingy and had seen better days. They had an apartment on the 19th floor that must have been almost 2000 square feet, and with rent control never paid more than $500 a month.

At that time west midtown was still rough-edged, around 1980 my grandfather was mugged both on the street and in a hallway of the building. 8th Ave had rundown hotels where ladies of the evening plied their trade and venturing to 9th and 10th Ave after dark was only for the brave. Hell's Kitchen was still aptly named and had yet to become "Clinton." But people who were not zillionaires could still afford to live in Manhatten, and there were many theater people, artists and musicians in the neighborhood towards the Hudson along with assorted hustlers, dealers and gangsters. Ye Old NYC indeed.

My grandparents passed away in the mid 80s and the Parc Vendome went condo. Thirty years ago you could start to see the stuff mentioned in this article coming. I sometimes wonder what became of that big apartment on the 19th floor, or even if it is still intact as a single unit. Not going for $500 a month anymore I'm sure.

The City must immediately enact a tax on residences like these.

Million-dollar-plus apartments considered 'middle class'? Only in New York, especially in Manhattan. As the late, great humourist Harry Golden liked to say, "My friends on Mars will never believe this."

My first thought, as a long-time resident of Manhattan, is that one should not give tax breaks to "investment properties" (though that additional cost, I imagine, would be passed along to subsequent tenants) and pieds-a-terre, especially if they are foreign-owned. Given the absurdedly low vacancy rates and the absurdedly high rents, it might be a step in the right direction.

This has been for generations a statistical aberrance of residences in the heart of Manhattan's center city. So many live here as cash under the table shares, perhaps poor occupants legally packed into a subsidizeded apartment, perhaps crashing in charity shelters et al the annual income of year round residents is lower than in the rest of the metropolitan area by one set of skewed calculations. Listing the famous people who own residences here to which they hardly pull up in chauffeured limousines creates an opposing skewed statistic suggesting this is all filthy rich, prime downtown real estate.

Before taxing the income of these non-residents, the city should consider how few services they require and how much money they spend on clothes, theaters, and restaurants (plenty of sales tax revenue there). If the tax pushed these investors to other cities, New York would be left in a major recession.

Part of the problem is controlling and interfering coop boards that won't permit subletting. Many apartments sit vacant for years because of this problem

The city should have a program whereby such apartments could be rented without coop consent to carefully screened homeless families without coop consent after the coop board rejects two sublet applications. This would instantly create more housing.

The only real shame in my eyes is that the truly empty apartments mean fewer people using the basic services around a building. Not that every multi-millionaire is going to go down to the corner deli for daily items, but many would. If a building is half empty that's 50% less potential customers (not to mention the various delivery people and whatnot that serve a community).
New York is still a city of neighborhoods. It would be great if it could stay that way as opposed to being a ghost town of skyscrapers.

This is a troubling trend in some areas of New Orleans as well, and it can severely damage neighborhoods to not have as many permanent residents living in them, sending their children to schools, using grocery stores, walking the streets and keeping eyes out for crime.

My suggestion is that anyone buying a non-primary residence should be subject to a hefty non-resident tax upon purchase, and then pay a massive surcharge (double, triple) on annual property taxes on the property (unless they move into the residence on a permanent basis.) It's very short-sighted to get excited about non-resident property purchases that ultimately destroy the areas they are buying into.