"The truth exposes their credentials vs knowledge. Political candidacy has become formulaic even shallow. This simple query sifted the chaff from the wheat. It works as short hand test for cities across the US."
Top-rated comment at the NYT for a story titled "It’s a Home in Brooklyn. What Could It Cost? $100,000? Shaun Donovan and Raymond J. McGuire, candidates for mayor of New York, were way, way off when asked to estimate the median home price in the borough."
Shaun Donovan was the Secretary of Housing and Urban Development in the Obama Administration and housing commissioner in the Bloomberg Administration. His answer was "In Brooklyn, huh? I would guess it is around $100,000." How could he be so out of touch?
Only Andrew Yang got the answer right: $900,000.
How did Donovan get his high positions when he's that clueless? I looked at Wikipedia:
He holds three degrees from Harvard University: an A.B. in engineering sciences from Harvard College in 1987, a Master of Public Administration degree from the John F. Kennedy School of Government in 1995, and a Master of Architecture degree from the Graduate School of Design in 1995.
Credentials! I know I'm impressed. Amazing when one question ruins a candidate — amazing, yet entirely justified. For the record, afterwards, he tried to explain it away as based on a belief that the question referred to the tax assessment value of the houses. Please follow up on that. Are the assessments out of whack? Are $900,000 houses assessed at $100,000?
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5 comments:
Dan writes: "Architects always undervalue their designs, then us builders have to set the record straight."
Joe emails: "Regarding your question "Are the assessments out of whack? Are $900,000 houses assessed at $100,000?" I own a home in NY. Assessments are not updated unless the unit or house changes hands. After 10 to 20 years it is certainly possible that the assessment, based on long ago sale, is way below current market value."
This incident may inject an unplanned issue into the campaign: Are long-time residents paying their fair share of property taxes? Are newcomers getting cheated into paying far more than their share?
Madison Man emails: "I wonder if there's *any* place in New York state where the median house price in $100,000. I wonder what the median house price is in, say, rural Wisconsin. What a great question to ask the candidates, and kudos to the Times for exposing these credentialed people for the nitwits that they are."
Paul emails:
The NYC real estate tax assessment system is difficult for non-residents to comprehend. But the key point is there are two moving parts — assessed value and rate. What you need to know is NYC’s current RE tax rate is 12.67% of assessed value. In most California counties, to give one comparison I know about, the rate is slightly over 1 percent. This explains NYC’s very low “assessed values."
For example, someone who is let’s just say a “friend” of mine — this is a real person — owns a condo in NYC she paid 2.45 million for about ten years ago. Today’s market value is probably around $3.3 million. The “assessed value” of this unit is $305,345. However, the “tax rate”
Is 12.6%. More than twelve per cent. The tax bill annually is thus about $36,000. I have a different friend who owns a property in California. That
House is assessed at close to actual market ($2.8 million). However, in this
Particular county in California the tax rate is only 1.0% (one percent). So his tax payment is around $28,000.
In short, both California and New York collect about one-percent per year in RE taxes versus market value. They just get there different ways — NYC with a high tax rate on a fictional low base; California with a low tax rate on a higher base. In both cases, it’s worth noting there is no annual “revise to market” reassessment. In California, it just goes up a small amount every year you stay in the house per Proposition 1 I think it was called, passed in the 70’s, which also put constitutional limits on rate increases; in NYC, the assessments for residential real estate have not changed much in recent years, and since there is no constitutional limit on rate increases, the City can raise property taxes as much as it wants without changing the underlying assessments.
I imagine one reason for this is the nightmare of annually re-assessing, one by one, the 750,000 owned houses/units in NYC, especially since each such re-assessment would be subject to legal challenge (unlike a rate raise, which is a purely political decision).
So, bizarre as it seems, the NYC approach makes a certain amount of sense.
I’m no expert on NYC mayoral politics, but given that the electorate overwhelmingly consists of renters, I doubt the issue of “fairness” to longtime residents (and isn’t there a case people who’ve made a longterm commitment to the city should perhaps pay less?) will have much traction in this election.
For at least half a century since World War II, the third rail of NYC local politics was rent control — which is of course a major, major gift to
Certain long-term residents; i.e., renters of apartments built before
1947. (Remember Mia Farrow’s prewar 11 room apartment with Central Park Views, for which she was paying less than $3,000 per month.). At this point, there are few of these gems left, so the political significance is much
reduced.
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