The Rittenhouse Review

A Philadelphia Journal of Politics, Finance, Ethics, and Culture

Sunday, February 20, 2005  

Pay a Visit to Your Future Real Estate Hell

Because we shall never underestimate the ignorance, miseducation, and absurdly optimistic expectations of the latest round of homebuyers, they who have been propelled to “invest” far beyond their means by the likes of no lesser a Randian (!) than Federal Reserve Chairman Alan Greenspan, read, and try not to weep while doing so, “In Brownstones, Taxes Suddenly Rise,” by Josh Barbanel (New York Times, February 20).

Pull quote:

After struggling to fix up a brownstone in Harlem for the last 16 months, Meyghan Hill, a model and actress, and her husband, Daniel Scarola, a ballroom dancing instructor, are thinking about giving up and moving out. But what may drive them away is not the neighborhood, which they have come to love, nor their four-family house, where they have painstakingly stripped a century of varnish and paint from doors and balusters, but the shock of a tax notice they received last month from the New York City Department of Finance.

The notice indicated that the taxes on their 19-foot-wide house, only $4,100 when they bought it, would be going up in July to about $23,600, a fivefold increase of $19,000 -- more, they say, than they can possibly afford after paying their hefty mortgage. Right now, they have no tenants.

Like thousands of other owners of homes and small apartment buildings, they have been abruptly caught up in a new campaign by city tax officials to enforce laws that allow them to raise taxes sharply when owners file for permits for major renovations of older buildings.

These large increases are being imposed at a time when state law requires the city to slowly phase in regular assessment increases for other homeowners over years or even a decade or more in some cases.

“We are panicked and we can’t afford it, and if we sell, the price will be lower because of all the taxes,” Ms. Hill said. “We are being punished for fixing up the building and trying to improve the neighborhood.”

No, Ms. Hill (And isn’t the “y” in “Meyghan” just too precious!), you aren’t being “punished” for the improvements you and Mr. Scarola made, you are being asked to pony up accordingly as the law requires.

I’m sorry if nobody warned you this day was inevitable, even if it arrived sooner than one might have expected. If you, Ms. Hill, have any complaint, you have only yourself, your real-estate broker, Mr. Greenspan, and the hyperventilating media (“Housing Prices Soar to Record Levels / Buyers Still Bidding Up Prices / Experts Predict Robust Market”) to blame.

Did you ever consider, Ms. Hill, that a “four-family house,” even one in edgy but rapidly appreciating Harlem, just might be beyond the reach of a rationally thinking duo engaged in so economically marginal professions?

I’m just asking is all.

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