REAL ESTATE ROUNDUP

You may not own a mansion, but New York’s mansion tax may mean you have still have to pay. We have the details. Find out why one realtor says Amazon’s decision to leave Long Island City may be the best thing that’s ever happened to the neighborhood.

Aired on June 18, 2019. 

TRANSCRIPT

GOOD EVENING AND WELCOME TO 'METROFOCUS.'

I'M JACK FORD.

WHEN AMAZON ANNOUNCED IT WOULD BRING ITS HEADQUARTERS TO LONG ISLAND CITY, INTEREST IN THE NEIGHBORHOOD'S REAL ESTATE SKYROCKETED.

NOW THAT THE RETAIL GIANT CHANGED COURSE, THOSE NEW PROPERTY OWNERS HAVE BEEN LEFT SCRATCHING THEIR HEADS.

THAT'S NOT THE ONLY THING AFFECTING OUR CITY'S REAL ESTATE MARKET THIS YEAR.

NEW YORK'S MANSION TAX, YOU MIGHT NOT KNOW WE HAD ONE GOT A MAKEOVER.

HERE WITH DETAILS ON BOTH STORIES AFFECTING SO MANY NEW YORKERS IS THE FOUNDER OF THE GOLDEN KEY REALTY GROUP.

EVI ANGELAKIS.

THANK YOU FOR HAVING ME, JACK.

LET'S START OFF WITH THE LEAD UP TO AND THE ANNOUNCEMENT THAT AMAZON'S COMING TO LONG ISLAND SOON.

IF YOUR PERSPECTIVE, YOUR PROFESSION, YOUR BUSINESS, WHAT DID THAT PROMPT IN THAT THE WHOLE AREA?

.

TO EVERYBODY IN THE INDUSTRY AT THAT POINT, IT WAS A BIG RELIEF BECAUSE WE KNEW THE MARKET WAS GOING TO MOVE.

YOU HAD MINIMUM 25,000 JOBS IN THE NEXT TEN YEARS FROM AMAZON ALONE AND THEN BUSINESSES WERE GOING TO FOLLOW.

THAT'S HOW IT USUALLY GOES.

EVERYBODY WAS HAPPY.

WE HAD A LOT OF PRODUCTIVITY.

IT INCREASED 40% TO 50%.

A LOT OF PEOPLE SAY NOW I'M GOING TO RIN VEST.

IS THE WE'RE GOING TO BUY.

AND NEW DEVELOPERS IS LOOKING BACK ON LONG ISLAND CITY TO BUILD NEW PROJECTS.

MARKET WAS DOING GREAT.

THE MOOD WAS EXCELLENT.

THEN WE HAD THE LOCAL SENATOR, A STATE SENATOR, MIKE JENARRI SOMEHOW CAME AGAINST IT.

TRYING TO SAY THAT WELL, LONG ISLAND CITY CANNOT AFFORD THIS BECAUSE WE DON'T HAVE THE TRANSPORTATION, WE DON'T HAVE THE SCHOOLS.

THIS IS GOING TO BE A NIGHTMARE FOR THE WHOLE AREA IN HERE, BUT THIS WAS A CONCERN THAT WASN'T RACIAL REAL.

IT WAS SOMETHING THAT YOU COULD HAVE PROBABLY YOU KNOW.

SO THE ANNOUNCEMENT IS MADE.

NOW WHAT HAPPENS TO THE MARKET?

WE, IS, THE MARKET WAS IN A STANDSTILL FOR AT LEAST A WEEK.

EVERYBODY WAS TRYING TO UNDERSTAND WHAT WAS HAPPENING.

AND WE WERE TRYING TO DIGEST IT.

YOU KNOW, IT WAS SHOCKING.

WHO WOULD HAVE THOUGHT AMAZON WAS PULLING OUT?

IT WAS A BIG DEAL.

THEY HAD AGREED ON A WEDNESDAY WITH THE UNION AND THEY WERE -- AND THEY ANNOUNCED THE NEXT DAY ON A THURSDAY WE'RE DONE.

SO IT TOOK A LITTLE BIT OF TIME.

OF COURSE, HAD YOU ANGER IN THE MEDIA, PEOPLE ON THE STREET.

YOU HAD PROCESSED AND EVERYBODY, THE BROKERS, DEALS, BUYERS, YOU HAD NEW-TIME BUYERS THAT WERE GUYING CONDOMINIUMS AND THEY SAID THIS IS THE TIME FOR ME TO JUMP BECAUSE THE VALUE IN THIS AREA IS GOING TO GO UP TREMENDOUSLY ONCE THE JOBS START COMING IN HERE.

THESE PEOPLE WERE FREAKING OUT.

WHEN YOU'RE A FIRST TIME BUYER ON A CON MINUP, YOU'RE YOUNG.

E

.

NOT SOPHISTICATED DEVELOPERS.

YOU WORK HARD TO DO THE DOWN PAYMENT.

THIS IS NOT THE FIRST LESSON YOU WANT IN REAL ESTATE, UNFORTUNATELY.

I SAW YOU HAD SAID LOOK, THIS WAS A TERRIBLE LOSS AND YOU HAD SAID THIS WAS -- YOU HAVE SAID YOU THINK LONG ISLAND CITY IS STILL GOING TO BENEFIT.

WHY?

WELL, YOU KNOW HOW MANY, HOW MUCH MONEY YOU HAVE TO PAY FOR THIS KIND OF PR BASICALLY?

AND WE GOT IT FOR FREE.

PEOPLE SAYING THIS IS A GREAT PLACE.

IT'S ON THE WATER.

HAS ROOM FOR DEVELOPMENT.

THIS IS NOT EVEN AMAZON SAYING I'M GOING TO OPEN A WAREHOUSE.

THIS IS HEADQUARTERS OF AMAZON.

OKAY, THIS IS MAJOR SO EVERYBODY, THIS WAS SO CONTROVERSIAL FOR THREE, FOUR MONTHS, RIGHT?

THAT THIS WAS ALL OVER THE NEWS.

PEOPLE IN EUROPE KNEW ABOUT LONG ISLAND CITY.

I HAVE FRIENDS IN THERE THAT SAY EVERYONE KNOWS ABOUT LONG ISLAND CITY.

LET ME ASK YOU THE LAST QUESTION.

WE MENTIONED THE MANSION TAX.

BUT IT'S BEEN IN EXISTENCE FOR 30 YEARS.

UH-HUH.

AND ESSENTIALLY, IT WAS IF YOU PURCHASE SOMETHING A MILLION DOLLARS OR HIGHER, YOU AS THE BUYER HAD TO PAY A TAX ON IT.

CORRECT.

AND THAT'S NOT ONLY CONTINUING EXISTENCE, BUT IT'S GOING TO GO UP.

WHERE IS IT GOING TO NOW?

SO THIS IS BEING INCREASED ANYWHERE FROM 125% TO 400%. WHAT'S HAPPENING WITH THE MANSION TAX IS THAT IT WAS CREATED IN 1989.

DURING A RECESSION.

AND THE STATE NEEDED MONEY.

IT WAS MARIO CUOMO, THE FATHER OF ANDREW CUOMO THAT CAME UP WITH THE IDEA.

BUT A MANSION BACK THEN WAS A HALF MILLION DOLLARS.

THIS IS 1989.

A MILLION DOLLARS WAS A LOT OF MONEY FOR A HOUSE THEN.

YES.

ACCORDING TO THE OVERHAUL, A MILLION AND UP YOU AS THE BUYERS ARE STILL PAYING A TAX.

YOU'RE BEING PENALIZED.

I SEE THIS AS A WAY OF PENALIZING SOMEONE FOR BUYING.

NOTHING ELSE.

YOU HAVE A TRANSFER TAX WHICH EVERYBODY'S FAMILIAR WHICH IS PAID BY THE SELLER.

RIGHT, WHEN YOU PURCHASE AND TRANSFER TAX.

THIS IS COMING OUT OF THE POCKET OF THE SELLER, IT DOES NOT MEAN THAT EVERYBODY IS NOT SHARING IN THAT.

THAT IS WORKED IN THE DEAL.

YOU AS A BUYER ALREADY ARE PAYING FOR THAT IN A WAY OR ANOTHER.

NOW WE'RE GOING TO PENALIZE YOU ON THIS.

THE SAD PART IS THAT THE PROPERTIES, THEY INCREASED THE RATE FOR PROPERTIES STARTING FROM $2 MILLION AND ABOVE.

IT IS WORTH SAYING THIS IS DONE ONLY IN NEW YORK CITY.

NEW YORK STATE IS GOING TO STICK WITH 1% NO MATTER HOW BIG THE DEAL IS.

PEOPLE NEED TO UNDERSTAND, IN NEW YORK CITY, A $2 MILLION PROPERTY IS THE MIDDLE CLASS BUYING IT.

THAT'S WHAT THE MIDDLE CLASSES IN NEW YORK CITY IS.

IT'S ABOUT $25,000 IN A $2 MILLION BUY.

$25,000 CAN BUY YOU A CAR.

$25,000 CAN PAY FOR YOUR KIDS' SCHOOL.

$25,000 CAN BE THE MAINTENANCE FOR TWO YEARS.

IT IS A BIG DEAL.

THERE'S A LOT GOING ON IN THE MARKET.

CERTAINLY YOUR PERSPECTIVES IS VERY HELPFUL.

THANK YOU FOR HAVING ME.

Funders

MetroFocus is made possible by Sue and Edgar Wachenheim III, the Sylvia A. and Simon B. Poyta Programming Endowment to Fight Anti-Semitism, Bernard and Denise Schwartz, Barbara Hope Zuckerberg, Janet Prindle Seidler, Jody and John Arnhold, the Cheryl and Philip Milstein Family, Judy and Josh Weston and the Dr. Robert C. and Tina Sohn Foundation.

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