fyi

Tax abatements benefit developers, not buyers.

i think the point here, steve, was that as the abatements expire the city will receive more tax income. but yes, i agree, tax abatements are a goldmine for developers, and at best a mixed bag for buyers. the one possible exception being the 20-25 year program available from such developments as the Kalahari.

Tax abatements actually do benefit buyers - you just have to make sure that, all else equal, you're getting a good price on the condo itself. The problem is that too many buyers don't look at the two as part of the same equation. If you do, and negotiate as such, the abatement can be quite appealing, even if it's of the 10-year variety (though the 25-year is a pretty nice thing to hang your hat on in this case).

Is the link only about tax abatements?

so aboutready, how do you feel about tax abatements?

Do you think that if they don't benefit you, they ought to be rescinded?

But if they benefit you then they should be protected?

bjw, conceptually i agree with you. and for a few it's true. unfortunately it is human nature to buy at or close to one's current financial ceiling. and it is even more true during a bubble. so, the vast majority of people did not consider the effect of rising taxes, and not surprisingly they did not consider the effect of rising unemployment, declining wages, and declining home prices.

a horrible witches brew.

mutombo, no. anyone have a link to the underlying study? what i'm interested in is what the net migration rate was. did population actually decline? or did it just become paid less per person? not that the latter doesn't matter, but the former would be hugely important for real estate considerations.

aboutready, I don't disagree with that at all. I just happen to think the abatements are scapegoats for that much larger problem, and that's really where people should be directing their anger and efforts. Lenders and buyers should be forced to look at the apartment's cost as if the abatement never existed - it's like a free meal: you don't eat more just because the tab goes to someone else.

AR,

Thnx I can always count on you.

"unfortunately it is human nature to buy at or close to one's current financial ceiling. and it is even more true during a bubble. so, the vast majority of people did not consider the effect of rising taxes, and not surprisingly they did not consider the effect of rising unemployment, declining wages, and declining home prices.
a horrible witches brew."

Explain to us today your sympathy for owners who stretched and yesterday why you wanted to rescind retroactively the tax abatements they bought for?

Oh, you were being sarcastic. And then you weren't.

Exemptions!

Link to underlying study.

http://www.empirecenter.org/pb/2009/10/empirestateexodus102709.cfm

My next report will point out what nonsense this is!

From the report alluded to at the beginning of this thread:
Tax Reduction
Tuesday, October 27, 2009, by Sara

One in seven New York City taxpayers moved out of the city between 2000 and 2008, according to a report from the Empire Center for New York State Policy. The average salary for a newcomer to the city is $20,538 less than the salary of those who left, leading to a significant tax loss for the state...
Empire Center for NY = Manhattan Institute

See the link above for the Actual Study.

Let me summarize the "logic" of the Manhattan Institute's report referred to above for those of you unfamiliar with the study of demography. The report examined Census data and saw that significant numbers of NY residents are out-migrating to Florida and NJ, and to a lesser extent, other places beyond. The bogey man driving these migrants away is taxes!

Let me rephrase what is happening in other terms. Older workers, who generally make more money than younger workers, retire to Florida. (Younger) College students graduate from out-of-state Liberal Arts colleges move to NY for lower starting salaries than the older workers they are nominally replacing on NY States Census roles.

According to the Manhattan Institute, the cause of this is TAXES! We must lower taxes!

Of course, the report notes that the other state to receive out-migrants other than Florida is NJ. Given that NJ has the highest taxes in the country (ergo HIGHER taxes than NY) one wonders where this leaves their argument?

“Estimated at 11.8% of income, New Jersey's state/local tax burden percentage is the highest in the country…”
http://www.taxfoundation.org/research/topic/44.html

Curiously, the report seems to omit the fact that in the latest downturn migration to Florida has reversed. Should FL raise taxes?

“December 24, 2008 - Can you name one way that Michigan and Florida are alike? A correct answer would be that both states lost more migrants than they gained last year, among persons moving within the United States.”
http://www.brookings.edu/opinions/2008/1224_migration_frey.aspx

For the record, I am not advocating for or against taxes, I do favor unbiased demographic research that makes sense rather than grinding an ideological axe. This Manhattan Institute report is nonsense.

sisyphean, thanks for the link. while the conclusion is light on substance, the data itself is interesting.

BJW: it's like a free meal: you don't eat more just because the tab goes to someone else.

Actually, one note -- there is data (I think Bob Frank did it) that indicates you actually eat less at a free meal. He conducted the experiment in an all you can eat buffet where you pay to enter -- and he refunded the meal to random customers and monitored consumption. Those customers who got their money refunded actually did eat less. At first, this is a maddening result for rational expectations economists because it says consumers aren't ignoring sunk costs. However, the explanation that evolved is that your budget set increases when you get a free meal, so you have more options for the next meal and don't need to consume food of declining marginal benefit at the present meal.

LOL @ SkinnyNsweet "BJW: it's like a free meal: you don't eat more just because the tab goes to someone else."

Retirees have no salary so not sure your conclusion is correct that they account for the difference.

There is an actual tax loss to NY from out-migration, are you disputing that?

mutombo, you do realize I wrote that, not Skinny, right?

Skinny, thanks for that - behavioral econ is fascinating (I only took one course, but it was great).

bjw2103,

Yes, I know you wrote that. You always want credit but never like to give credit when its due.

"However, the explanation that evolved is that your budget set increases when you get a free meal, so you have more options for the next meal and don't need to consume food of declining marginal benefit at the present meal."

There's another explanation (and you see a lot of this mentality right here): a lot of people feel they have to "get their money's worth" out of everything. So, when they go to an all you care to eat buffet, the more they eat, the more the "win". But when they don't pay, they don't feel the same need to "beat the system" because they already have. I've seen the same thing in buildings where electricity is included in the mtc or rent vs buildings which have a fixed charge for electricity each month (probably one of the reasons you don't see it much at all anymore). People who were paying the fixed amount used more electricity than those where it was included in the mtc (even though the total number was the same - ex: $700 mtc plus $80 electricity vs $780 mtc including electricity).

mutombo, your grasp of English is reminiscent of a certain yellow-wrapped candy bar.

bjw2103,

I can tell you got beat up a lot as a child.

mutombo, I can tell you get beat up a lot as an adult.

bjw2103,

I can tell you don't get laid at all as an adult. I know you wish the old Times Square was still around.

But I'll also state that I think the "buffet" experiment is flawed as proof you don't eat more at a free meal/if someone else is paying for it: the results might be very different in a "non-buffet" scenario: I remember a number of years ago ?American Express? donated picking up the check for dinner for X people to some charity auction and the winning bidder was some known gourmand (?James Beard?) who flew a few friends to France and they had some meal which cost some ungodly amount of money.

"bjw2103,

I can tell you don't get laid at all as an adult. I know you wish the old Times Square was still around."

Is this the opposite of SkinnyNsweet's free lunch scenario? He'd get laid a lot more if he paid for it than if it was for free?

You know you've made it when your sex life is discussed on Streeteasy.

bjw2103,

You don't have a sex life you don't have sex.

FYI!!!

http://www.streeteasy.com/nyc/talk/discussion/15728-implications-for-nyc-real-estate-now-and-in-the-future

Pussy is never free.

mutombo, I'm sure Borders has a bunch of kids' joke books on the discount rack so you can add to your impressive repertoire. Stay classy buddy.

bjw2103,

Borders has books on how to get laid as well.

Yes, and you didn't write any of them either.

I recommended the getting laid book line to you since your two fave friends are Palmalita and Jenna Jamison your hand and dvd player need a break.

Advice I should follow: http://clanuk.com/forums/images/smilies/troll-web.jpg

bjw2103,

That was so corny.