Myron Magnet is brilliant, but I'm not so sure I buy his argument in this article in the Manhattan Institute's City Journal. He says developers' concern for the 421a tax abatement is preventing them from fighting the extension of rent stabilization laws:
How hard would it be for Gotham's tycoons to increase their contributions to state legislators from upstate, Staten Island, and other places where people work for a living, to encourage them to let the law expire—especially now that the leaders of both houses of the legislature face possible jail time for their business-as-usual racketeering, which prosecutors seem not to view as beyond reproach? Ah, but the 421-a property tax exemption, which goes to developers like Extell, a builder of hideous and obscenely expensive condos for kleptokrats from Russia and other such racketeering countries, is also up for renewal in June; in its present form, at least, the law provides a few "affordable" apartments in exchange for charging no property taxes to foreign tycoons whose wealth is of unsavory origin and whose contribution to the city is only their big restaurant tips, expensive vodka, and the jewelry they buy for their concubines.
Mr. Magnet is picking up the argument made by the New York Times in its "Towers of Secrecy" project about foreign buyers of Manhattan real estate. It seems to me that they paint with too broad a brush. Not all foreign wealth is ill-gotten, nor are all purchasers of expensive New York condos "kleptokrats." Those condo buyers don't pay "no" property taxes; they get a temporary abatement. And even purchasers whose wealth is ill-gotten make other contributions to the city; they pay a "mansion tax" of 1 percent of the purchase price; they pay sales tax on those restaurant meals, vodka, and jewelry; they pay tuition for their children at New York colleges and universities; they pay to get treated at New York hospitals; and if New Yorkers welcome them rather than hurl insults at them (a big "if," to judge by the articles in both the Times and City Journal), they may eventually decide to make the city their home.
