http://news.yahoo.com/nyc-front-doors-one-percent-120700147.html
Cliff Notes Version: Many luxury residential buildings in NYC have some low-income units to qualify to tax credits, but residents of those units have a separate entrance in the back of the building. Interesting side note: Low-income in NYC is less than $51,540 per year.
Discuss.
So do they have an armed guard at the door saying, “Sorry sir, but you don’t make enough money to use this entrance.”
Seems fair enough to me.
I think CFAI would consider this ethical. You’re allowed to charge different amounts for different levels of service, so I think its fine.
My guess is that the units that qualify for low-income housing share the same walls, but not the same corridors. Presumably they will have different maintenance crews and standards too.
^seperate but equal
Yes! Let’s ensure our tiny neat bubbles don’t burst!
I would gladly walk in through the back of the building if the city taxed other people to subsidize my rent. Actually, I would do a lot of things if people paid me, but let’s not get into that.
me too. it must be great knowing someone’s literally paying more so you can pay less. oh wait… so that’s what it feels like for 1/2 the US population… interesting
As a resident in Manhattan I think this sort of “affordable housing” should be outright abolished. There’s no reason why someone who cannot afford to live in that building be artificially put there by the government. It’s incredibly wasteful on two fronts.
First: the developer has to realize lower profits, higher risk and thus may not be as inclinded to develop in the first place.
Second: the 15% used for affordible housing could go to those who can actually afford it. That base will get taxed appropriately and thus more tax revenue for the city. It’s stupid and completely unfair for someone to get placed into prime real estate just because they win some “lottery”. It raises rents for everyone else and lowers potential housing stock. A better use would be for the city to take the higher tax revenues and use it to develop or encourage developers to build actual affordable housing in less prime areas.
Basically another form of rent control, which if anyone has taken econ 101 knows always turns out bad. Just plain dumb.
End rant.
The whole thing is incredibly unfair and ass backwards in my opinion (and I certainly don’t mean the separate door). For example- I don’t know what market rates are in this building, but let’s assume you need to make >120k to comfortably live there. Now to qualify to get into one of the subsidized units, you have to apparently make <51k. Where does that leave those in the 51k-120 area? If you’re making, say 70k, you wouldn’t qualify for the handout so you’d not only be working harder and longer hours than those who qualify, you’d also be in an inferior building, AND paying more rent. You’re literally worse off for working harder. Absolutely insane. Unfairness put aside, there’s also the basic economic concept that everyone suffers from rent control (except those receiving it obviously) because it decreases housing supply thus increasing market rates. The fact that this story is somehow about how unfair it is that these ppl have to use a separate entrance, and not about how unfair it is that they were allowed in in the first place, is mind boggling.
From what I understand, developers get tax breaks on those units and that’s why they do it in the first place
But those tax credits must come from somewhere! You can bet that these are funded by a higher base tax rate on developers, or by other taxes. Either way, someone is getting penalized in order for the city to provide this category of housing.
This is true, but again it could be done in a much better way. First not give tax breaks for developing high-end housing, period. You could extract more taxes this way when they do develop higher-end housing. Second, give tax credits for developing true affordable housing.
Welcome to the new USA.
This is what the Economist was talking about a few months ago when they discussed the 90% tax rate. For every dollar you make, you get 90 cents less welfare.
I know I’ve posted this here before and I apologize that I don’t remember the exact numbers, but a few years back the Commonwealth of Pennsylvania did a study and determined that a single mother of 2 would have more disposable income thanks to tax credits and various state and federal social programs if she worked part-time for $25,000 per year, than if she had a full-time job earning $65,000. Maybe it’s just me, but I see that as problematic.
I agree. But (and it’s just my guess) it will be way more expensive for the government to give tax credit for true middle income housing because it would have to be much higher breaks… I think, even fully taxed, the high-end projects are more profitable.
The idealistic me prefers to keep the government out of it completely and let the market establish the prices. But poor people will get hurt…
I’m not disagreeing with you in general. But isn’t building actual affordable housing in less prime areas just another way of saying let’s build more “projects”.
Higgs, ZeroHedge often cites that study.