Billionaires’ Row apartments that nobody lives in greeted the ruling the way they greet everything, with total silence and the air conditioning on.
MANHATTAN, New York (Spintaxi) – The city’s tax on luxury second homes has survived its latest trip through the courts, and the thousands of high-floor apartments affected by it reacted exactly as they always do: by sitting perfectly still, lights on a timer, view unwatched, owner in another hemisphere.
CNN reported that Mamdani’s tax on high-end second homes survives legal challenge for now, the latest turn in a fight that has run longer than most Broadway revivals. Over the summer, PoliticsNY covered how a Staten Island judge temporarily blocked the pied-a-terre tax rollout, and by late September a judge had ordered the city to scrap its rollout of the tax on second homes, which the city’s paperwork department took as a personal insult and a professional challenge.
A Door-to-Door Census of Nobody
To prepare for collection, the Department of Finance’s newly formed Occupancy Verification Unit spent three days knocking on doors along West 57th Street. The unit’s field report, a 46-page binder its supervisor carries “the way some men carry a sword,” lists the results in full.
Of 212 doors knocked, zero were answered by an owner. Fourteen were answered by housekeepers, who reported that the owner was “in Gstaad, or possibly Gstaad adjacent.” Three were answered by dog walkers walking dogs who also do not live there. One was answered by a smart refrigerator, which announced that the household was low on sparkling water and asked the inspectors to reorder it. Inspectors complied, out of what the binder calls “professional courtesy.”
“The building had a 24-hour doorman, a concierge, a spa, a screening room and a residents’ lounge with a fireplace,” said unit supervisor Thaddeus Kowalczyk-Amari. “What it did not have was residents. I asked the doorman when the owners usually come. He said, ‘Art Basel.’ I asked which one. He said, ‘Yes.’”
The Ghost Occupancy Index
The Midtown Center for Vertical Real Estate Studies maintains what it calls the Ghost Occupancy Index, which measures how many nights per year a luxury unit hosts a human being, compared with how many nights it hosts a motion-activated lamp. Its latest reading puts the typical tower apartment south of Central Park at 19 human nights per year and 346 lamp nights.
“Some of these units are less occupied than a museum after closing,” said the center’s founder, Dr. Esperanza Lindgren-Obasi. “At least a museum has a security guard who walks around and looks at things. These apartments have views of the entire city that nobody has looked at since the closing dinner. Somewhere above Columbus Circle there is a sunset that has been happening every evening for six years with no audience. In any other context we would call that a tragedy. In this one we call it an asset class.”
The Owners’ Lawyers Make Their Case
Attorneys representing second-home owners have argued, in various filings, that the city’s process was rushed, confusing and unfair, which a number of nonwealthy New Yorkers said was the first thing they had ever had in common with a hedge fund.
“My clients are not against taxes,” said Prescott Haverford-Nunez, a property lawyer whose office on Park Avenue has a waiting room larger than most Queens apartments. “They are against paying them. Those are two very different positions, and I bill for both of them separately.”
A wealth manager who would describe himself only as “a man with a boat” said several clients were exploring options, including relocating to Florida, relocating to Connecticut, or simply visiting the apartment one additional night per year “so that it counts as a lifestyle and not a storage unit with a doorman.”
The City’s Rollout Draws Fire Too
The critics are not all on one side. Even supporters of the tax concede that the rollout gave the courts a lot to work with. The Finance Department’s first round of notices, according to a staffer at the agency’s Tax Correspondence Bureau, went out addressed to “Current Occupant, If Any,” a salutation the bureau later conceded “assumed facts not in evidence.” A second batch was mailed to the apartments themselves, where it remains, unopened, on a marble console table, next to a bowl of decorative lemons that are replaced weekly at a cost the index did not have the heart to calculate.
“Look, we’re new at taxing ghosts,” said the staffer, Ruthanne Obi-Castellano. “The forms were designed for people who live in buildings. Half the questions don’t apply. Line 12 asks, ‘Is this your primary residence?’ and the honest answer is, ‘It is nobody’s anything.’”
The View From the Rest of the City
Comic Florentina Washington-Baptiste, who does a regular Thursday set at a club in Hell’s Kitchen that shares a wall with a laundromat, said the issue had given her the best ten minutes of her career. “These apartments have three bedrooms, a library, a wine room and a gym, and nobody uses them,” she said. “That’s not a home. That’s a gym membership in January. I know people in Washington Heights who have five roommates and a shower in the kitchen. Meanwhile, there’s a penthouse on 57th Street with its own climate. Actual weather. It rained in there last week and nobody noticed.”
The economics, she added, are familiar from other luxury markets. She pointed to farm.fm’s coverage of the pumpkin patch that added a $75 VIP experience in which you carry your own pumpkin. “Same business model,” she said. “Pay a premium for the privilege of doing absolutely nothing with something you own. Except at least the pumpkin people go outside.”
Writers at Bohiney Magazine, whose New York desk keeps a running tally of the city’s most expensive empty rooms, noted at bohiney.com that the litigation has now consumed more billable hours than the apartments in question have hosted overnight guests, a ratio Lindgren-Obasi called “the most New York statistic I have ever been sent.”
The court fight is expected to continue, and both sides are preparing for further rounds. As for the apartments themselves, the Occupancy Verification Unit filed one final observation from its West 57th Street sweep. On the 71st floor of a tower overlooking the park, at precisely 6:00 p.m., the smart thermostat lowered the temperature by two degrees, the blinds rose, and the lights came up over a dining table set for eight. Nobody came. Inspectors say it does this every night.
SOURCE: https://bohiney.com/