NYC Mayor de Blasio's Proposed "Mansion Tax"

Gracie Mansion - NYC mayor Bill de Blasio's affordable mansion

This week NYC mayor Bill de Blasio proposed a new "mansion tax" imposed on home buyers for home sales over $1.75 million and 1.5 percent tax to home sales over $5 million. This new proposed tax burden is in addition to the "mansion tax" burden already imposed by New York State for all property sales over $1 million.

The mayor from Brooklyn owns a townhouse at 442 11th Street in Park Slope. October 2014 it was valued around $1.5 million, $250,000 shy of de Blasio's definition of "mansion." 

The Brooklyn mayor has moved to Gracie Mansion in Manhattan. The mayor is currently renting his Park Slope home for market rate $4975/month ($60,000 annually.)

In addition to the mayor's proposed tax burden on home buyers he also plans to reform the 421a tax abatement program. Under his plan condos will no longer be eligible for the tax incentives. Rental building developers will required to set aside 25 to 30 percent of the units as affordable.

The mayor claims the new tax will create 60,000 affordable units over the next decade. 

Affordable for whom?

Bloomberg project 432 middle income units in Hell's Kitchen

Former mayor Bloomberg's plan focused on creating more housing for moderate and middle income families, something few programs address. This category includes people living on $58,000 a year as individuals up to $145,000 a year for a family of four. 

The Bloomberg administration's housing plan originally projected that 32 percent of the 165,000 units would be set aside for middle class New Yorkers. 

Mayor de Blasio's plan reduces the percent of units set aside for middle class New Yorkers by 10%. 

Under his plan 78% is for extremely low, very low and low incomes. 22% of units for middle and moderate incomes.)

Only 13,200 units out of 60,000 will be for middle class New Yorkers and the elimination of tax incentives for condos will create even less home ownership opportunities for middle class New Yorkers. The firefighters, the teachers, the nurses, small business owners and many other people who might not be at the lowest income levels but are still priced out of the market.

A 2009 study by the Center for an Urban Future looked at the strain that housing costs were putting on middle class New Yorkers and argued that it was imperative for New York City to maintain a strong middle class.

Surprisingly the real estate board of New York (REBNY) supports the mayor's mansion tax and 421a proposal. The mayor's proposals will require approval by the State Legislature.

\