Sunday, November 24, 2013
DeBlasio plans to overdevelop the hell out of everywhere
Call it Exhibit A. On part of an irregularly shaped block in the Highbridge section of the Bronx, a chain-link fence wraps around a three-acre property that has sat vacant for decades. Trees and weeds have run riot, in the process encroaching upon the sidewalks along University Avenue, even as the property's assessed value in the past decade has quietly soared from $716,000 to $9 million, according to city records.
And yet, because most of the property is zoned for residential use, and is assessed in the same low-density class as single-family homes, the Olnick Organization, which owns the land, pays less than $8,000 annually in property taxes on that residential portion.
Cases like that spurred Public Advocate Bill de Blasio in April to push for tax hikes on vacant land to force owners either to put it to use and build housing or to sell it to those who will. As mayor-elect, Mr. de Blasio is pledging to carry out his idea, which today would affect more than 10,500 lots in the five boroughs, with the largest concentration on Staten Island. The plan, after a five-year phase-in period, would hike yearly rates by an average of $15,300, according to estimates by the Independent Budget Office.
As for the long-vacant Highbridge lot, the city property taxes on the large residential portion would balloon to about $180,000.
By increasing the cost of inactivity to prohibitive levels, the hope is that more land can be put back into use and much-needed housing can be built. Many observers think it can work if the costs of holding land idle are driven high enough.
The measure could also produce another undesirable effect.
Mr. de Blasio estimated his plan would eventually generate $162 million annually.
"Maybe a guy says, 'I'm not going to pay these taxes, I'm going to build a taxpayer,'" said Eric Anton, a managing partner at investment bank Brookfield Financial, referring to a small development on a piece of property that generates just enough money to cover payments to the government.
Mr. de Blasio's plan targets not active developers, but what the mayor-elect brands as "speculators"—owners who sit on buildable land waiting for prices to rise. In the past, Mr. de Blasio has singled out booming neighborhoods like Brooklyn's Williamsburg as prime locations for people warehousing real estate—all while the city suffers a critical housing shortage.
Enter Exhibit B. In the middle of Williamsburg, where land prices have doubled and redoubled in the past 20 years, Frank Fristachi and Suzannah Matalon have clung to an 8,900-square-foot parcel of fenced-off land at the corner of South First Street and Driggs Avenue. The owners insist they do not fit into Mr. de Blasio's mold.
"It's not vacant—it contains a beautiful garden, trees, bushes and plants, and was rescued from being a dump owned by the city," Mr. Fristachi said. "I think I should get a tax rebate for supplying this neighborhood with clean air and light."
Mr. Fristachi also disputes the suggestion that he's a speculator, pointing out that if he were one, he'd have already unloaded the parcel and banked his fat profits. Nonetheless, he conceded that Mr. de Blasio's proposal has made him unsure about what he should do if his property taxes rise from about $6,800 annually to an estimated $17,000 under the mayor-elect's plan.
This will build nothing but luxury condos and the same crap we've been seeing all over Queens for decades, but at a faster pace. Notice that there's no mention of infrastructure improvements.