"Subsidize our house, not your penthouse!", so goes the outcry of indignant protesters who took their displeasure to the street just in front of the controversial One57 residential tower, reported Observer.
The alliance of different militant groups are taking umbrage over what they believe is an unfair practice wherein the luxury property in 57th street in midtown Manhattan saw its real estate tax bill reduced to about 95 percent because of a tax break.
The highly-disputed tax exemption program, called the 421-a, has given way for the owner of the tower's $100 million penthouse to pay a paltry sum of just $17,268 (.017 percent) in property tax as reported by the New York Post.
421-a which first came into existence back in the 70's was conceived in order to boost construction in the city amidst sparseness in population. Capitalnewyork.com notes that according to protesters, it is an antiquated and ineffective housing program that functions as a way to give gratuities to the billionaires. The tax program is set for renewal this coming July in Albany.
The tax exemption program, as reported by the New York City Independent Budget Office, has cost the city more than $1 billion in foregone tax income in 2013 alone. This is equivalent to 150,000 housing units that qualified for 421-a in that year. The duration of the tax exemption period could last 10, 15, 20, or 25 years.
A given property may be eligible for the 421-a exemption if its value was affected because of the inclusion of a multi-family residential building, as stated in the official site of the New York City Government. The amount of rebate depends on the property use and location, and the requirements for affordable housing.
The Daily News New York called One57 a "Tower of Insult" in one of their posts in 2013. It questions the notion of why ordinary taxpayers in the city have to take the tax cudgels for those who are flush with cash. It even went so far as to say that the property could end up as a "Monument to a Fleecing".
The development, they figure, could reap gains for the city of New York from the $15 million allocation for low-cost housing and $3 million fees that Extell, the developer of One57, would have to earmark upon pushing through with the development. On the other hand, the project would save the developer about $53 million from tax breaks in a span of a decade. This would mean a net gain of $35 million in favor of the wealthiest.
On the other end of the spectrum, there are beneficiaries of 421-a who are thankful for the program as per the NewYork Post in a separate report. At the nearby Bronx, for example, 66 apartments were subsidized by the money appropriated by Extellin in order to get eligibility for tax abatement. The low-income residents are getting cheaper rents and they couldn't care less on how much One57 gains from the tax break.
