
Paying Top Dollar for Condos, and Leaving Them Empty - 001sky
http://www.nytimes.com/2013/02/12/nyregion/paying-top-dollar-for-condos-and-leaving-them-empty.html
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cletus
It's worth noting that some ~85% of apartments in Manhattan are coop not
condos where this often wouldn't happen. Developers like condos because they
can sell to anyone. Buying in an established building means meeting whatever
requirements the coop board sets. This can vary from the easy to the onerous.

What side effect is that I would posit that coop owner-occupancy rates are
much, much higher.

Coop boards tend to have heavy restrictions on subletting too, which
admittedly is more of an issue to lower income earners than the megawealthy
(that seem to be the "culprits" for vacant luxury condos).

Personally I'd find it eerie living in a large apartment tower and never
seeing any other residents. Lonely is right.

~~~
oijaf888
I live in a coop in Manhattan and I would guess at least 30% of the building
doesn't live here full time or they are just holding on to the property until
we surpass 2008 real estate values (from checking streeteasy and the previous
sale price/ask price today). Also this isn't a super luxury place.

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jcampbell1
NYC should decrease income taxes and increase property taxes. I don't mind out
of towners buying expensive condo's, but they should help pay for the services
that make New York great. Right now, because their income is all earned out of
town and property taxes are very low, so they are not really supporting the
city.

~~~
bobcattr
And what would happen to people like my grandmother who can barely afford
their property taxes now. She has lived in the same house for 50 years

~~~
chaqke
Not intending to be harsh, but your grandmother could use the equity
established in her property, and move to somewhere where the costs of living
are within her means.

In cases where the property has appreciated so much that the increase in
property taxes is a burden, surely there is a corresponding increase in equity
to lessen the blow.

The "CA Prop 13" option pretty much makes newcomers finance existing
landowners' property taxes - not my favorite option.

~~~
mturmon
Prop. 13 is a disaster in another way. Because commercial buildings are
higher-valued, it is now common for them never to be sold. They are just spun
out as a separate entity, and that entity changes hands.

Since they are never sold, their property tax base never increases (re-
assessment happens most often after a sale). So there has also been a net
transfer of property tax burden from commercial to residential property.

~~~
ajays
More and more people are doing it too, I think. I was looking at property
records, and a surprisingly large number of them were owned by various
"trust"s .

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aresant
"Then there is the $88 million crash pad at 15 Central Park West, bought last
year by a trust linked to Ekaterina Rybolovleva, then 22 years old."

Can somebody send me the AirBNB link to that one please?

~~~
oijaf888
Or her okcupid profile... :)

~~~
w1ntermute
Eh: <http://i.imgur.com/i8L0JUW.jpg>

She looks much older than 22. Then again, with all that money, you'd never
have to worry about finding funding for a startup again.

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contingencies
For the record, empty real estate is the norm over here in China. The
government dissuades capital exodus, a strategy which is also partly assisted
by cultural and linguistic challenges. The result has been that many people
have simply bought, developed, and sat on real estate right across the
country, a huge proportion of which is empty. The really poor people (most
people) cannot afford anything, and even if you do "buy", it's only a lease
from the government for under a hundred years. In other words, even if real
estate _is_ perceived as a safe haven, in fact it's not. Nobody's comfortable.
Everyone's constantly on edge. The older generation, despite opening their
eyes to the world, cling desperately to their children as insurance against
the coming winds of change. (And the 'typical' family structure: 4
grandparents, 2 parents, 1 child.)

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stygianguest
This was the reason to allow squats in Amsterdam. It was 'legal' to squat a
building or appartment that had been empty for 12 months. Moreover, the burden
of proof (for new plans with the building and/or use in the preceding 12
months) was on those seeking to evict.

Now squatting is illegal again.

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pkaler
I live in a Vancouverism condo and about half the units on my floor are
currently empty. <http://en.wikipedia.org/wiki/Vancouverism>

These residents winter in Hong Kong, Phoenix, San Diego, etc. I don't really
blame them. I'd rather spend the rainy months in a warmer climate, too.

I would imagine that the case may be similar for New York. If you can afford a
multi-million dollar place in New York, you can probably afford another multi-
million dollar place in some other place, too.

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dfxm12
_Others, however, describe living in a deserted piggy bank as something else:
lonely_

If you live in New York, even in an otherwise empty building, and feel lonely,
you're doing it wrong.

~~~
pdog
Actually, one of the ironies of living in a big city like New York is that
even with all of the options, loneliness is _more_ prevalent[1].

[1]: [http://www.aeonmagazine.com/being-human/olivia-laing-me-
lone...](http://www.aeonmagazine.com/being-human/olivia-laing-me-lonely-in-
manhattan/)

~~~
speeder
I live in São Paulo (the whole metropolis has 30 million people) and I feel
horribly lonely.

Plainly because everyone is like visitors, I see thousands of people every
day, and I don't know any of them, as I move around the city (I lived in 4
different places in the city over the years), I noticed that I never felt at
home, it is like being a eternal stranger, a eternal visitor.

When I lived in a 100k people town, I remember that I could realiably find the
same people in the same places, for example I could go eat a hot dog at night
in a park, and talk with the regular, build friendships, and so on. And yet,
it was still strange...

But São Paulo? Well, I could take the same route every single day, and don't
see the same people twice. It is just horrible.

I only don't feel depressingly lonely, because I made friendship with some
people over internet, and every month we all meet on someone house.

~~~
potatolicious
> _"Well, I could take the same route every single day, and don't see the same
> people twice. It is just horrible."_

Have you tried to see them twice? Have you asked?

Having lived in quite a few large metros in my life, and now living in NYC, I
have to say: the city is as impersonal and isolating as you let it be.

My challenge to you: forget _every_ preconceived notion you have about
strangers, how you're supposed to behave in public, and the how and the whys
of friendship and hanging out - and go talk to some strangers.

You'll get some weird looks, but your success rate will be 1-2 orders of
magnitude higher than what you'd expect.

I've seen this stance expressed on HN before and receive some flak - but I say
fuck the naysayers. They can have solitude if they wish, but there is no crime
in asking a stranger to shoot the shit over coffee, and anyone whose day would
be ruined by such a request is oversensitive and paranoid to the point of
absurdism.

------
zmanian
My impression is that Bloomberg has consciously chosen the strategy of
encouraging second home ownership in Manhattan as an attempt to decouple New
Yorks service and consumer economy from the financial services sector.

This trades off the progressive goals like affordable housing against
providing a baseline of consumption activity to sustain NYC's tax base and its
service workers.

~~~
rdl
Do people not spending much time in NYC actually contribute much beyond
property tax?

~~~
zmanian
An apartment in a condo in NYC will be about $100k+ per year in fees and
taxes. Dozens of people will be employed in the management and maintenance of
the building.

I've also got the impression that consumption of various luxury goods and
services in NY is highly coupled to bonus season in the financial sector.
Millionaires from Kansas etc are likely to consume such services like
Broadway, Bergdorfs etc year around because there are a lack of equivalent
services back home.

~~~
endtime
>An apartment in a condo in NYC will be about $100k+ per year in fees and
taxes.

[citation needed] Property tax in NYC is pretty low; this $3.35m condo in
Tribeca is just over $20k/year in taxes and maintenance:
[http://streeteasy.com/nyc/sale/809162-condo-22-warren-
street...](http://streeteasy.com/nyc/sale/809162-condo-22-warren-street-
tribeca-new-york)

~~~
zmanian
It depends on the buildings amenities and staffing levels. You can find
multimillion dollar properties with no staff but generally there is a
dozenfull time staff members is a 100 hundred unit building

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abat
One thing to note about the buildings in the article, is that they're all in
fancy areas for shopping and tourists but not really places that long time
residents want to live.

I would be more interested in knowing the stats for luxury housing across the
whole city.

~~~
rayiner
What're you talking about? The examples are: Columbus Circle, 157 W. 57th
street, 65th and lex. The last one is in the heart of the UES old money
residential area, and the former two are right where the fancy central park
view housing happens to be. You know those rich kids whose parents are paying
for their apartment in Williamsburg? Those are the places where those parents
live.

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michael_miller
Given NYC's sky-high rent, I wonder what would happen to the real estate
market if these apartments were occupied by full-time residents. It seems
grossly inefficient to have an apartment sitting empty for that long, no
matter how much money you have. I guess there aren't too many good options,
since airbnb-style renting is probably a) illegal and b) frowned upon by the
building. If I were these people, I'd just treat the apartment as an
investment property and stay in a really nice hotel when I was in town.

~~~
segmondy
If you really where those people, it would be too much of a burden and hassle
to have to deal with it as an investment property. They just don't want to
deal with booking hotel rooms, the hassles. They can store whatever and know
that it will remain untouched, they can fly into town and have an affair and
leave, and best of all, it's prime real estate that figure will stay in high
demand for the foreseeable future.

~~~
gknoy
That was my take-away as well. In addition to having a relatively stable
investment (prime real estate in a popular city should hold value very well),
you get to avoid the hassle of booking travel, and can manage your
expectations about what you're getting. It's a more exclusive and more-
personal place to visit or rest than a hotel, since it can have YOUR art, YOUR
bathrobe, etc.

------
wallflower
"Waiting at a red light, I look up at the large glass windows that are the
eyes of Park Avenue. From a population-density point of view, this is the
Midwest of Manhattan. Towering above me are rooms - rooms and rooms and rooms.
And they are empty. There are powder rooms and dressing rooms and piano rooms
and guest rooms and, somewhere above me, but I won't say where, a rabbit named
Arthur has sixteen feet square all to himself."

-The Nanny Diaries: A Novel by Emma Mclaughlin, Nicola Kraus

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zobzu
I feel a little the same in SF. Maybe not at the same ratio, but still. Quite
a few places are rented, but the people are rarely there. I always imagine
they're just all very rich and have those places instead of hotels when they
move from city to city. But really, i've no idea.

Note they all seems to own the place, ie it's not a rent.

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segmondy
so? millionaires also pay tens of millions for private planes and it sits in
the hanger most of the time!

~~~
xradionut
Not the smart ones. They lease shares.

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mwsherman
Seems like it’s clearly money left on the table. Perhaps someone is rich
enough that they don’t care, but that seems odd.

Residences have something of a P/E ratio: market rent vs cost of the property.
Perhaps the foregone rents are a drop in the ocean, but I don’t think so.

If it’s a question of luxury – the desire to have one’s own place even if it
lies fallow – well, someone would have to be _very_ idle rich to allow that to
happen. Certainly there are high-end brokers who could host parties, or
special visitors, in such places.

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elchief
Are there occupancy rules for insurance in the USA? I know there are in Canada
and UK

"Not living full-time in your home can invalidate your insurance"

<http://www.bbc.co.uk/news/business-19422609>

~~~
Kadin
You buy more expensive insurance, just like you'd have to do for an investment
property.

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malandrew
Anything that isn't a primary residence should be heavily taxed. There should
be an onerous carrying cost associated with real estate in markets with
limited available real estate.

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OGinparadise
_“It is a safe haven,”_

and that's it, especially with Chinese, Russian or ME oil money. If you have
$1++ bilion, you want to safely put away enough to live comfortably for the
rest of your life, should government act up and taketh it. Maybe you are on a
foreign trip, or you make it to the border, fake a passport or whatever, and
then your property in NY or London awaits you. No need to work as a busboy or
at a dry cleaning service.

In US, rich people may buy land, bunkers, gold and silver coins. But USA is
much more stable and property rights are relatively safe so we call them
paranoid.

