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Opinion

Pied-à-Terre Tax Should Be Just The Start


adaptny mayors

(image: mayor's office)


Governor Andrew Cuomo, Senate Leader Andrea Stewart-Cousins, and Assembly Speaker Carl Heastie have all signaled their support for funding the long overdue MTA overhaul with a pied-à-terre tax. Cuomo has said it’s the “only agreed-to new money” for the upcoming state budget. But the challenges facing struggling families in New York demand more than just a pied-à-terre tax. We need an entire reimagining of New York’s upside-down tax system.

There are over 75,000 apartments in New York City owned by people who don’t live there year-round. Some of these are second, third, or fourth homes. Earlier this year billionaire hedge-funder Ken Griffin made headlines for purchasing the most expensive home in the country: a $238 million penthouse overlooking Central Park. Griffin already owns multi-million-dollar properties in Chicago, Miami, and London.

The pied-à-terre tax, sponsored by Senator Brad Hoylman, would institute a surcharge on non-primary residences worth $5 million or more. The surcharge would start at 0.5% and rise to 4% for homes worth more than $25 million. For people like Griffin, it’s pocket change. State Budget Director Robert Mujica estimates the new tax would generate $9 billion in new revenue over the next decade.

New York’s billionaire class has been let off the hook by a regressive tax structure that puts the burden on working families in the form of higher sales and property taxes. These times call for us to have the courage to demand that the wealthiest New Yorkers pay their fair share. New York is already the most unequal state in the country, with the top 1% taking home 45 times more than the bottom 99%. The Trump tax scam has only made the problem worse, as billionaires are now benefiting from some of the lowest tax rates in decades.

Austerity measures, fueled by the false narrative that there just isn’t enough money to go around, have wreaked havoc on our communities. In cities like Rochester and Schenectady, half of all children live in poverty. A state as affluent as ours should not have young children going to sleep hungry or elderly people unable to afford their rent.

The entire tax system in New York is rigged to benefit the super wealthy. Taxing the rich shouldn’t be a last resort for our Governor and Legislature. New York needs a pied-à-terre tax, an expanded millionaires’ tax, the elimination of the carried interest loophole, and an end to the billion-dollar giveaways to giant corporations.

This restructuring of our tax system would allow for investments in our struggling communities. It would mean we could fully fund our public schools, repair our crumbling infrastructure, and expand access to affordable health care and child care.

Corporate-backed think tanks like the Empire Center will wave their arms and cry “tax flight,” but this has proven to be a myth. The people who move the most frequently are young people and low-income families seeking good-paying jobs and a better quality of life. And what will improve quality of life in New York and make young families want to live here? Quality public schools, affordable housing, and reliable transportation.

The self-imposed shortfalls and spending cuts continue to hurt our communities. The Governor needs to stop kowtowing to CEOs and big developers and insist that the people with the most contribute the most.

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Jessica Wisneski is Co-Executive Director of Citizen Action of New York. Michael Kink is Executive Director of Strong Economy for All. On Twitter @jesswisneski & @citizenactionny.

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Proposal Would Subvert Efforts to Address Affordable Housing Crisis


mayorsoffice aff

(photo: Michael Appleton/Mayoral Photography Office)


One of the greatest and most immediate challenges facing New York is a statewide affordable housing crisis that continues to affect millions of families. Elected officials must support and promote new legislation and policies that will help our state produce more affordable homes and, correspondingly, do no harm to much-needed housing efforts.

The reality today is that more than 3 million households across the state still pay more than 30 percent of their income on housing costs, which means they are “rent-burdened” and often struggle to afford housing and other necessities like health care and child care.

This crisis is what led Governor Cuomo and the Legislature to dedicate $2.5 billion to support an ambitious five-year statewide housing plan and preserve crucial low-income housing tax credits that were under threat by the federal government.

But our state’s ability to address the affordable housing crisis is now at risk of being undermined by new legislation that proposes to expand the definition of public work and the application of the prevailing wage mandate to private construction projects – including low-income housing developments – based on the public subsidies they rely upon to be built.

As an organization whose members deeply believe in supporting the needs of low- and middle-income New Yorkers, we also believe in good, fair wages for all workers. But the wide application of prevailing wage, which is far in excess of the median wage and can raise construction costs by 25 percent or more, is not actually a path to higher pay for construction workers. In fact, it is certainly a way to ensure there are fewer jobs, fewer new developments, and fewer affordable homes for New Yorkers.

This would be a step backward for New York, where construction costs are already the most expensive in the world, averaging $362 per square foot in New York City, according to Turner & Townsend’s 2018 report on international construction. The report also notes that those costs will only continue to rise and are expected to jump by another 3.5 percent over the next year. Other costs and regulatory burdens remain major obstacles all across the state.

Whether they live in Brooklyn or Buffalo, New Yorkers simply cannot afford to lose opportunities for new housing construction and the many good jobs that come with them. It is worth noting that the creation and preservation of affordable housing supported more than 300,000 total jobs throughout the state between 2011 and 2015.

The state Legislature now has an important choice to make. Rather than advancing well-intentioned but misguided legislation that would diminish new affordable homes and good jobs across the state, we hope lawmakers will fully consider these negative impacts before they proceed with imposing prevailing wages on the construction of affordable housing in New York.

The further that lawmakers explore this issue, the clearer it will become that it is unwise to hastily advance these proposals and risk undercutting New York State’s much-needed housing plan. And if they make the right choice, all New Yorkers will benefit.

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Jolie Milstein is president and CEO of the New York State Association for Affordable Housing, a trade association that represents nearly 400 members responsible for the construction and preservation of affordable housing across the state.

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Tale of Two Transit Plans: Johnson’s Is Real, Cuomo’s Is Likely


 mta cuomo cojo

Gov. Cuomo (governor's office) & Speaker Johnson (William Alatriste/City Council)


On February 26, Governor Andrew Cuomo and Mayor Bill de Blasio released a 10-point plan to “transform and fund” the Metropolitan Transportation Authority (MTA). The vague, crisp proposals are designed to centralize splintered MTA operations to further State control, formally unify support for revenue-generating policies like congestion pricing, and establish external monitoring of the struggling authority, which runs the New York City subways and buses, as well as regional rail networks.

One week later, City Council Speaker Corey Johnson announced a transit plan of his own, several months in the making. The speaker’s 104-page white paper has a slew of ideas to reform governance, financing, accessibility, and surface-level transit.

The boldest proposal in Johnson’s very bold plan is the City take over subway and bus mass transit -- which it hasn’t managed since 1968 -- plus local bridges and tunnels, while leaving control of commuter rail, suburban buses, and capital projects to the MTA.

This would streamline transit accountability by making the mayor directly responsible for the subway and buses (like in London). Johnson also wants congestion pricing, whether the State passes it or the City enacts its own measure, and several tax hikes.

To be clear: neither plan has all the details. That’s the nature of politicians creating policy, and needing subject-specific experts to chime in. The difference is the Cuomo-de Blasio 10-point proposal lacks the basic necessities of a policy plan, whereas Johnson’s is a well-thought out series of policies, just without some next-level details.

It’s unclear the joint Cuomo-de Blasio plan, which needs approval from the state Legislature, will actually help alleviate deeper MTA problems with performance, operations funding, capital expansion, labor costs, or debt service. In his Signal Problems newsletter, journalist Aaron Gordon noted there’s a “fundamental misunderstanding” of different technological options for upgrading the signal system.

Johnson’s white paper glazes over politically-challenging aspects like labor costs that the Cuomo-de Blasio plan ignores entirely, and takes a radical stance on taxes generating permanent operations revenue. In response, Cuomo outright mocked Johnson’s proposal, while de Blasio dismissed it as an impossibility before the April 1 state budget deadline.

Plenty in the transit world is already being debated, and that fast-approaching state budget deadline brings a Legislature more focused on fiscal policy than urban planning into the conversation. Especially since all three leaders -- Cuomo, de Blasio, and Johnson -- agree congestion pricing needs to happen, the actual proposals are less significant than the policymaking tenor with which they’ve been proposed and discussed, and what the differences mean for governance of the city’s mass transit system.

Johnson’s plan is a substantive, comprehensive proposal, while Cuomo’s plan (I’ll call it Cuomo’s, because his stamp is on practically the entire thing) is dangerously short on details relative to what one should expect from a government leader impacting millions of people. Details are a precursor to meaningful dialogue about transit reform, and the rigor simply isn’t there in 10 bullet points. (Clearly, that’s not just a local problem.)

Cuomo’s team insists they’ll throw together enough details in the state budget. The governor often waits until the last hour to force budget changes, like when his team ushered in a congestion surcharge of $2.75 for rideshare vehicles and $2.50 for taxis last year.

Cuomo’s transit input isn’t necessarily a bad thing, but it’s a troubling indicator of dictatorial, politically-driven decision-making in transit, an excessively technical endeavor at its core.

It’s hard to trust the New York details will be as substantive as plans in Berlin, London, Paris, or Singapore, considering the simplicity of the toll shoved through last year’s state budget. A $2.75 surcharge on ride-share vehicles is the price of a city transit fare, while the $2.50 surcharge for taxis was simply less than the $2.75.

What accounts for the differences in rigor? Cuomo “expects” his plan to be approved behind closed doors in Albany, whereas Johnson is promoting transparency and accountability. Cuomo’s already in charge, Johnson wants the City to be.

The governor acts as if he can change practically anything atop the MTA without pushback. Maybe he’s onto something. Neither advocates and journalists outside government, nor MTA leadership and legislators within government, have consistently scaled back Cuomo’s transit proposals, even those that overstep his bounds or are not economically sensible.

Consider the new L train tunnel repair plan: despite wild uncertainty in changing plans three years in the making at the last second, the MTA Board acted handcuffed in even exercising due diligence. Criticism simply didn’t manifest into meaningful resistance.

It’s less about dialogue, since the governor’s tactics don’t really invite public discourse or any semblance of democratic norms. Cuomo’s threatening a 30 percent fare hike should he not get his way with congestion pricing, and the governor’s response to Johnson’s plan was to withdraw the State’s $10 billion in funding should the City control the subway.

Effectively, it’s Cuomo’s way, or the highway. A plan this vague and politically-driven, yet still likely to pass given the governor’s power in changing the MTA and influencing the state budget process, can only exist in an accountability vacuum (a phrase I wrote in an earlier version of this article that Johnson used in his State of the City speech).  

It’s clear the speaker’s 104-page plan takes governing, accountability, and rigor seriously. Johnson’s plan sets clear, quantifiable expectations for improvements, makes the mayor the subway’s political figurehead, reforms transit government boards, and specifically references a multitude of programs to expand. The spirit of Johnson’s white paper mirrors that of Berlin’s comprehensive proposal in late February to inject billions of euros into its already-heralded system.

However, it doesn’t mean Johnson’s proposal is the right one for New York. Former head of the MTA Richard Ravitch, who is credited for resurrecting the authority and its subways in the early 1980s, said of Johnson’s plan, “It’s a very thoughtful proposal, I just don’t agree with it.” Having the City take over mass transit is a massive undertaking, and the taxes he proposes may drive business out of the City, a delicate subject any time, especially post-Amazon.

That’s why the devil is in the details. Without knowing what Cuomo’s plan really entails, how can the MTA Board, State Legislature, City Council, journalists, and the commuting public decide what to make of the two plans side by side?

The tale of two plans is a stark reminder New York’s political landscape needs reforming, just as much as its transit system needs an overhaul. In essence, there’s only one real plan on the table: Johnson’s. Yet, the plan without plans—Cuomo’s—is what New Yorkers should expect to happen.

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Tim Lazaroff is a freelance journalist specializing in transit.

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