January 13, 2022

Billionaires’ Row: The Tall & Skinny on New York City’s Supertalls

In Viewpoint Vancouver we have previously  written about the supertalls in New York City

 

A “supertall” tower is classified as any tower over 300 meters high. With additional height comes additional costs when something goes wrong, as documented in the challenges with 432 Park Avenue. As one assessment of that building concluded “The 432 Park Avenue tower sways, whistles wind, spits and groans. .. “73 percent of mechanical, electrical and plumbing components observed failed to conform with the developers’ drawings, and that almost a quarter “presented actual life safety issues.”

The New York City supertalls are the product of dodging local regulations and taking advantage of air rights. They represent the commodification of real estate as a holding asset, and there are a high percentage of units in these supertalls that are not lived in, apparently just traded.

Fred Mills the founder of B1M (Build One Million) provides a YouTube Channel on building and construction. He has also put together a thoughtful analysis on “billionaires’ row” in New York City clustered along Central Park. By buying the “air rights” from adjacent properties, the developers of the supertalls ensure that the views of their units are never blocked, and they can go higher on their own property.

Mr. Mills points out that in this case the real estate becomes a way to store money, and investors can do it privately and anonymously. There are no front yards or common corridors to see neighbours, no need to know anyone else in the building.  Also by being in strata ownership as opposed to Manhattan’s popular co-operative housing there is no need for the rest of the building owners to know the finances of individual strata owners.

Mr. Mills also describes the property tax loophole which allows the investors in these buildings to pay minimal property taxes.  Property taxes are based upon units being rented-but are not adjusted if the units remain vacant. Vancouver does get a mention here as well as a sound bite from  Matthew Soules.

The YouTube video below was posted a month ago, and already has had over seven million views.

 

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