A significant beneficiary of the housing bill being voted on by the Senate today could end up being New York City – and other areas with relatively low property taxes. A part of the bill is a flat $1,000 property-tax deduction for couples who own property. Now in New York property taxes on a $1 million apartment can easily be $250 a month or less – which is $3,000 a year. The property-tax deduction therefore amounts, for some NYC homeowners, to a 33% decrease in property taxes. Given that, and given the plunge in tax revenues which is likely to hit NYC as the financial industry contracts, I should imagine that an increase in property taxes would be entirely doable for a mayor trying to balance the city budget. After all, net of the deduction, most homeowners would still end up paying less overall.
And New York City might well need the money if, as is looking likely, Albany fails to approve congestion pricing by April 7. I’m an optimist by nature, but I have no faith at all in Shelly Silver’s propensity to do the right thing in this instance. With the city in favor and the Federal government offering large subsidies, the state has no business barring this from happening. But it probably will anyway.