Astounding Numbers from New York City

The sources of the figures in this index (except where noted) are the annual assessment and sales figures published by the NYC Department of Finance, which are incorporated into a database application by the Henry George Institute. Copies of this user-friendly app (for PCs) are available, with full instructions, on a DVD. We’ll send you one if you ask (and if you wanted to send us a tax-deductible donation, we’d appreciate that, too).

Property tax revenue from buildings as a percentage of total tax revenue: 24%

Personal income taxes as a percentage of total tax revenue: 19.4%

General sales taxes as a percentage of total tax revenue: 13.3%

Property tax revenue from land as a percentage of total tax revenue: 18.2%

Total assessed value of New York City land: $434.1 billion

Average “full market value” of 2,843 vacant lots that have sold since 2005, according to the assessment rolls: $620,946

Average sale price of those 2,843 lots: $2,139,704

Number of those lots that are still vacant: 1,671

Average sale price of a Class 1 (small residential) parcel in Manhattan: $4,533,375

Average sale price of a Class 1 parcel in the Outer Boroughs: $558,903

Percentage of Class 1 parcels that are in Manhattan: 0.9%

Average “full market value” of a Class 2 (apartments, not condominiums) parcel in Manhattan: $7.89 million

Average sale price: $5.69 million

Percentage of of all NYC housing units that are rentals: 68%

Average sale price of a residential condo unit in Manhattan: $1,556,296

Average “full market value” of a residential condo unit in Manhattan: $278,246

Percentage of residential condo units that are in Manhattan: 49.5%

Ratio of effective property tax rate on Class 2 apartment buildings to that for Class 1 residences: 5/1

Median income of renters in NYC: $38,000*

Median income of homeowners in NYC: $79,250*

Number of non-city-owned parcels in Manhattan with an assessed building value of 20% or less of their assessed land value: 4,750

Number in the Outer Boroughs: 57,843

Total area of non-city-owned vacant lots in NYC, in acres: 9,406

In square miles: 15.2

Current “full market value” of the Gansevoort Park Hotel’s lot (103×142 ft.) $8 million.

ues2Price paid in 2005-06 for the four parcels combined to build the Gansevoort Park Hotel: $31 million

Combined “full market value” (2008) of the buildings that were demolished on those four parcels: $4.7 million

Approximate cost of demolishing a 5-story building in NYC: $80,000

Average “full market” land value per square foot, in 2004, of 5 parcels (pictured above) bundled together to build “The Brompton”: $422

bromptonSale price of these five parcels in 2006, per square foot: $4,944

Average sale price of a unit in this building: $2.4 million

 

Our Input in Harrisburg

by Josh Vincent

During the past two years, Georgists have wondered if Harrisburg can serve as a good example of land value taxation. No one, however, was wondering that before the “Incinerator issue” came to the fore. The Georgist Journal reported in 2003 about the remarkable progress that Harrisburg had made after shifting to a two-rate system. Between 1982 and 2003, the total value of taxable real estate in Harrisburg increased by 754%, far more than comparable cities. Homes and businesses sprang up; fires and crimes dropped.

Then, Harrisburg faced a financial meltdown primarily due to the collapse of a bond issue on a municipal incinerator that had to be retrofitted by order of the EPA and refinanced under onerous terms. Time will tell if all financial responsibility for this bond market created monstrosity will be shared equally by the governmental signatories and the assurance firms that guaranteed payment of the bond. The amount in question is huge: nearly $300 million.

The Act 47 (state control of fiscally-stressed cities) made a number of recommendations for dealing with this issue — one of which was to rescind the split-rate land value tax. In our testimony before the panel, the CSE respectfully disagreed with these conclusions. We demonstrated that the tax on labor and capital would double if LVT was rescinded. We showed how reviving neighborhoods, compact, tall commercial buildings, and lower-income neighborhoods would all be adversely affected by rescision.

CSE also made clear that the best way for Harrisburg to grow out of its fiscal problems was for it to develop its economic base, particularly its commercial tax base. The original Act 47 report suggested that low-density and open air commercial development would be retarded by a land value tax. CSE agreed but asserted that the best place for low-density automobile intensive nonresidential development was not inside a city trying to make its way in the postindustrial era, but in the suburbs. This feeling is shared by homeowners, as well as the mayor, the city controller, and many Council people. All reiterated that they were aware that the land value tax was a tax benefit for the hard-pressed residential sector of the city, and an incentive tool to gain new use or at least more revenue from high value vacant or underused commercial land.

Now, the Mayor’s office wishes to pursue the expansion of land value tax as a tool to both ameliorate the pain of the Act 47 implementation and as a way to raise revenue to get out from under this situation in a timely manner. Although the competition between branches of government in Harrisburg is very pronounced, all agree that the land value tax may be a tool for the future of Harrisburg. I should note that CSE supported one very important aspect of the Act 47 plan — to require frequent reassessments by the County. Although the new governor of Pennsylvania, Tom Corbett, has signaled assessment reform is a not a policy he would advocate, he and General Assembly leaders signed legislation forcing the city of Harrisburg to adopt an Act 47 recovery plan. Therefore, CSE will pursue the issue of reassessment down the road. Act 47 is a process that is re-examined continually.

The CGO will be meeting at a time when crucial discussions about the future of Harrisburg will take place. We are going to speak to most of the major players at the municipal level, and at least some County and state officials. I believe these interactions will help more Georgists realize that that the communication of our idea can be complex and sometimes frustrating. In the end, you should know that land value tax is a policy that is in play and has helped the city of Harrisburg get through this crisis.

Eminent Domain and Government Giveaways

by Wyn Achenbaum

It seems to me that there are better ways than eminent domain to provide the incentives that will lead the private sector to develop choice land. I’ve walked the New London, Connecticut, neighborhood involved in the Kelo case (before I was aware of the case). It sits fairly high above the Thames River near Long Island Sound, overlooking Fort Trumbull, which has been restored in recent years. Continue reading