clock menu more-arrow no yes mobile

Filed under:

Shocker: Half of Midtown's Super Luxury Condos Sit Vacant

New, 14 comments

In a story that basically confirms everything New Yorkers already believed about the proliferation of foreign buyers who own stash pads here, the Times quantifies the suspicion that a heckuva lot of apartments around the southern end of Central Park are owned by out-of-towners. (The paper of record, by the way, likes to revisit this subject every 18 months or so to drive the point home.)

Onto the numbers: census data from 2012 shows that "from East 56th Street to East 59th Street, between Fifth Avenue and Park Avenue, 57 percent, or 285 of 496 apartments, including co-ops and condos, are vacant at least 10 months a year." A swath that's a bit north of that, from East 59th to East 63rd, shows that "628 of 1,261 homes, or almost 50 percent" are pied-a-terres. All those dark windows? Not your imagination. The place is deserted but for the tourists packed into the Apple Store's glowing cube. But all these preponderance of all these dust-gathering apartments beg the question: why doesn't the city make more money off of them? There could be a tax for that.

Property taxes are figured out using a formula that relates to a unit's rental value, the Times explains, citing the ludicrous example of a One57—purchased for $3.6 million—that has an apparent market value of just $430,000 for the purposes of property-tax calculations. Something's not right there.

That's why elected officials like Liz Krueger and Brad Hoylman are on board with what started as a Fiscal Policy Institute proposal to levy a new tax on foreign buyers who are inking particularly pricey contracts. Non-New York residents with pied-a-terres over $5 million and under $6 million would have pay annual taxes amounting to half a percent of whatever it cost over $5 million. The more expensive the apartment, the higher the percentage. So a $25M place would result in a $370,000 property-tax bill. And a $30M place would result in the $370K, plus 4 percent of $5M, since it is $5M more than $25M. There are a lot of issues with the tax, which is far from reality, but it's one way the city could make some more money off of these empty mansions.

So where, exactly, are these foreign buyers flocking? Using a separate set of statistics about tax breaks, it's easy to pinpoint particular buildings that are stacked with PaTs. Using information about a tax break that only full-time New York City residents get helps determine what percentage of luxury buildings is foreign-owned.

Fifth Avenue's Trump Tower has 237 apartments, but just 108 of them earned that tax break. So the number of primary residences in the building is less than half.

But oh, then theres the Plaza, where 58 out of 163 condominiums get the abatement. Do the math, and you'll realize that three-quarters of its owners are not based here. Its status is even baked into the Plaza's official name: Plaza Pied a Terre Hotel Condominiums.

Lastly, listen to this insight from State Senator Liz Krueger: "I met with a developer who is building one of those billionaire buildings on 57th Street and he told me, 'Don't worry, you won't need any more services, because the buyers won't be sending their kids to school here, there won't be traffic.' ... He said it like this was a positive thing."
· Pied-à-Neighborhood [NYT]
· The 13 Most Insane Lines from NY Mag's Foreign Buyers Story [Curbed]
· Shocker: Rich People Buy NYC Homes And Don't Live In Them [Curbed]


157 West 57th Street, Manhattan, NY 10019 Visit Website

Trump Tower

721 Fifth Avenue, New York, NY

The Plaza

Central Park South, Manhattan, NY 10019 Visit Website