Right. NYC is a bad example of "international rich buying units not to live in and making it more expensive for everyone else." It does happen, and it is a hedge for international investors, but it's not always cost-effective - unlike London, and I can explain why.

Of the NYC housing stock, close to 63% are rentals. Of the rentals, more than half are regulated (stabilized mostly). Of the owned homes, you have houses, condos and co-ops. Co-ops predominate in Manhattan (where you'd expect the rich to want to live), but condos only make up the smallest fraction of the for-sale home types (115K according to 2017 statistics).

Of the condos, if you're an international rich you want low carry and maintenance costs. So typically they buy the "tax abated" new luxury condos, and sure they accept to eat the maintenance costs. But if they want to eat the taxes, those can be ginormous, a quick streeteasy search will confirm.

NYC is just a pain to do that in unless you want to be there part of the time. Paris is like that - you buy for your trips every few months to go shopping, or whatever rich people do.

London is better, the carry costs are lower, being instead of property taxes they rely on council taxes, which first of all are WAY lower than anything property tax in the U.S. (not the least of which NY State), but secondly they capture more tax from the exchange (stamp duty).

As always it's fine to explore injustice and sources of inequality, but we have to be nuanced and analytical before we repeat the slogans.

P.S. - the link above is from 2021. Yes, in summer of 2021 the luxury units were empty because NYC was a shitty place to live in 2021, not the least of which because of how much had closed up, how much was still not opening, and how unpleasant the sidewalks were. So if you're a luxury rich person, you're going to spend the summer where there are mountains or beaches.

Sources: https://rentguidelinesboard.cityofnewyork.us/wp-content/uplo...

The problem here is that there are something like 3.5 million housing units in New York City and Billionaires' Row is like 5 buildings. It just simply doesn't matter if every single one of those units is empty. We're not talking about enough units to matter.

Billionaires row is hardly the only home sitting empty as an investment. Further they represent an outsized share of housing space even if the total number of apartments isn’t that high.

So even if 5 buildings out of 300 skyscrapers are at 50% occupancy on their own don’t matter much they still impact the market when combined with similar investments. Worse they prime the bubble by convincing more people to invest without putting them up for rent.

There's no evidence for this claim. It's a popular thing to say, so I think it must feel true for a lot of people, but there's no evidence for it and simple arithmetic suggests that it's a red herring. The fact is that vacancies in NYC are historically very low and reached new all-time lows in Manhattan at the end of last year.

People love the "investors and billionaires are buying up the market" story because it suggests a convenient villain, when the truth is that the millions of ordinary Americans who oppose new housing in their neighborhoods are a much bigger factor. Of course, that's not as satisfying as blaming a Disney villain.

We've been under-building for decades. We have a massive shortfall of new units, far beyond the number of empty luxury apartments. Frankly, at this point I'd support a meaningless vacancy tax just so we could put this objection to bed and focus on things that matter.

https://www.cnbc.com/2021/12/09/new-york-city-rents-jump-22p...

That’s an odd takeaway from an article speaking of a 22+ rent from increase due to COVID bounce-back. Ultra short term trends aren’t particularly relevant compared to long term trends.

One clear the example of the outsized impact is these buildings bought up air rights from multiple properties. So, they reduced the legally available space. When the city makes space for ~100,000 apartments and actually gets less than 1/10th that it’s a problem.

Another is the extreme cost of the associated tax breaks for affordable housing for minimal gain. The city set the tax break based on price while the number of affordable houses was based on the number of apartments. A seemingly obvious problem looking back, but still a problem for city residents.

What we're seeing is a return to the long-term trend. Vacancies in Manhattan have hovered around 2% for a long time.

See: https://www.millersamuel.com/files/2022/02/Feb22QNSrent-nyVA...

Which shows how important a seemingly small number of long term unoccupied apartments are.

Another way of looking at 2% vacancy is over 20 years an apartment is vacant less than 5 months. People move, die, go to prison etc, so there is some inherent friction represented in a 98% occupancy rate. Dropping to 1% long term takes more than just higher demand it would require increases in transaction efficiency.

the air rights are a bit of a red herring, because if the people in the city chooses to, they can easily abolish air rights, and allow buildings that previously sold their air rights to build it again!

And a couple of tall buildings in manhattan isn't gonna be making any difference. The difference would come from building denser everywhere.

That's not how property rights in America work.

If the rich are parking their wealth in real estate, you can take their wealth via property taxes. Many of the places with this problem choose to have low taxes on real estate, which is part of what makes it such a good investment and drives the price up.

Yes, real estate is a tax haven in many locations.