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De Blasio tries again for ‘mansion tax’ to fund affordable housing

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The proposed 2.5 percent tax would hit residential sales over $2M

Skyscrapers and city buildings at sunset.
One57, home to many an expensive residential sale in NYC
Shutterstuck.com

Mayor de Blasio is taking another stab at passing his “mansion tax,” which would add a 2.5 percent charge to all residential sales over $2 million—money that would then be allocated to affordable housing initiatives.

On Monday, the mayor testified on state funding for the city’s 2018 budget in Albany, arguing that the revenue from the proposed tax would go toward Section 8-style rent subsidies for as many as 25,000 low-income seniors, the New York Post reports. Though the mayor failed to gain support for a similar measure in 2015, he told state lawmakers that with federal funding so uncertain, it was necessary for the city to find new ways to pay for affordable housing.

“The people who would be affected can certainly afford this additional tax,” the mayor told lawmakers. According to City Hall officials, the tax would only apply to the part of the sale price over $2 million, and, if passed, would raise about $336 million in fiscal 2018.

But critics of the measure told the Wall Street Journal that, given what $2 million actually buys in Manhattan and the fancier pockets of Brooklyn, the threshold is way too low. “With $2 million, you can get a nice two-bedroom,” Joan Kagan, sales manager TripleMint, told the paper. “When you think about a family with children who wants to stay here for a little bit of time, they’re the ones that are going to be affected by the tax.” Arguably, that family is still, you know, spending $2 million on an apartment, but point taken.

Alicia Glen, deputy mayor for housing and urban development, doesn’t buy the notion that the tax will oppress young families purchasing Manhattan starter homes, as brokers fear. In 2016, she pointed out, only 8.5 percent of residential sales throughout the boroughs topped $2 million. “Does that mean that 8 percent of the world are buying starter homes? As a factual matter, that’s a ridiculous statement,” she told the WSJ.

Most likely, though, the question is moot. The measure requires approval from Albany, where it will almost certainly be blocked by the Republican-controlled state senate. “DOA,” a real estate official announced to Politico. "But it works for the mayor in terms of running for re-election and is a red meat issue for much of his base."