Pied-à-Terre: The First Big Step in Taxing the Rich

By KH

If you’ve ever been to NYC or any other massive cities like LA, London, Toronto, Tokyo you looked up at the buildings at least once and thought “I wonder who lives up there.” You probably then tried to imagine what it would be like to live that super rich lifestyle where you can look down at the city from the top floor, but I wonder if you imagined that many of these buildings in NYC were empty?

That’s right! In places like Billionaire’s Row, around half the units lay empty or are only used as pied-à-terre homes. Pied-à-Terre homes are defined are often condos or even full buildings owned by incredibly wealthy people who do not live in them full time and are often used as recreational housing while they live elsewhere. An example people might recognize from their childhood is how in Curious George the Man in The Yellow Hat had two homes, an apartment in a luxurious building in the city and a farmhouse in the countryside. You can consider the apartment pied-à-terre, but this isn’t a problem.
I mean who cares about some eccentric wealthy guy owning two homes to raze his chimp in? And you shouldn’t. The people you should care about are people like Citadel CEO Ken Griffin, who owns the 4-story penthouse of 220 Central Park South that cost $238 million.

Because they don’t live in NY, they don’t pay local taxes to support the city despite being ridiculously rich!

So, what is going to be done about this? Simple, they’re going to pay what they owe like the rest of us thanks to a new tax proposed by Governor Kathy Hochul after being convinced by Mayor Mamdani that this is what the state and city needs.

This pied-à-terre tax targets the second homes valued at least $5 million. Some people may be worried since the tax targets this city’s wealthiest, and they will not want to continue doing business in NY, but that is untrue. For a city like New York people are willing to stay here at any cost but this tax shouldn’t even be a blip on their radars since it both doesn’t target primary residences and in the words of the Governor “If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker.”

This is a tax that needed to happen a decade ago, and it almost happened under Mayor Bill de Blasio and disgraced Governor Andrew Cuomo.

It happened the same way as the current tax, with it being an idea first brought to Governor Cuomo’s attention by the mayor. It sadly did not have wide public support since people believed that a tax like this would lead to capital flight and would make New York less enticing for business. Some were even arguing that taxes should be lowered! And as a result without the will to push it forward, the two decided to form a Property Tax Reform Commission would be best despite this group didn’t have any power to implement the changes they would later propose.

With all said and done, we still don’t know where this tax will end up since it has only just been proposed. There may be some political shenanigans coming from lobbyists to shoot this new tax down or have it warped into something toothless, but we the people have the power to express our support and we can get these people to pay their fair share like the rest of us.