Budget Slams Real Estate

Real Estate got slammed in the State Budget approved Monday morning, including an increase in the real property transfer tax statewide on residential transactions over $3 million and other transfers over $2 million (from $2 per $500 to $3.25 per $500), plus an additional .25% to 2.9% on residential transactions in New York City (Part OOO).

Another hit eliminated the sales tax exemption for energy purchased from Energy Service Corporations (Part H). The budget also added language making source of income discrimination in rental housing illegal statewide (Part T).

On the rent regulation front, the budget increased the appropriation for Rent Administration from $43.5 million to $66.7 million (Page 441). Policy issues were put off, but Governor Cuomo told listeners to WNYC radio Tuesday that MCIs should be temporary: “You put in a new boiler, I’ll pay you for a new boiler, but I’m not going to pay you for a new boiler for the rest of my life…Once it is paid for the rent increase should stop.” Assembly Speaker Heastie, meanwhile, echoed the Governor and said he wanted to extend rent regulationstatewide.

CHIP Executive Director Jay Martin and Kara Rakowski, Attorney with Belkin Burden Wenig & Goldman, LLP gave their takes on the proposed changes in rent regulation on the Realtyspeak.nyc podcast this week. Jay Martin’s defense of MCIs also appeared in Crain’s.

The New York City Rent Guidelines Board kicked off its annual process, Thursday, with new reports on Tenants’ Income and Affordability and Owners’ Income and Expense. Tenant income to rent ratios have declined and evictions have dropped. Almost one quarter of eviction cases that go to trial are brought by the City Public Housing Authority. The I & E report found average stabilized rents citywide in 2017 were $1353 ($1006 in the Bronx, $2247 in core Manhattan); and average expenses were $984. Property taxes remain the biggest expense, averaging $319 per apartment per month.

Vicki Been, former HPD Commissioner and Furman Center faculty director, was named Thursday as Mayor de Blasio’s Deputy Mayor for Housing and Economic Development, succeeding Alicia Glen.

We always thought the New York City Council was for the birds (groan, we know, we couldn’t resist). Speaker Corey Johnson and Councilman Rafael Espinal Jr. have introduced legislation that would require new buildings to use patterned or treated glass designed to reduce bird strikes. The measure could raise costs anywhere from 5% to 50%.

Sometimes more is less. A Streeteasy analysis found that despite New York City adding 36,353 new housing units last year, the number of units in some areas with new housing actually shrunk due to alterations, conversions and the combinations of multiple units into one. 1241 new buildings across the city had fewer units than buildings they replaced.

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