The tenant household income threshold at which a landlord could initiate “luxury decontrol” of a New York City apartment would be raised to $300,000 under rent regulation extender bills passed by the state Assembly yesterday. This is well above the $200,000 taxable income (net of deductions) that qualifies a single filer to pay the state’s temporary “millionaire’s tax,” which many in the Assembly had fought to extend.
The current luxury decontrol income threshold of $175,000 (where rent is at least $2,000) was set in 1997, and adjusting for inflation would raise that amount to $241,000. The new proposed decontrol income threshold of $300,000 (if the apartment rents for at least $3,000) would thus seem to reflect an arbitrary judgment on who needs to be shielded from rent hikes.
So, let’s see if we can get this straight: Speaker Sheldon Silver and his fellow Assembly Democrats want to protect a tenant earning up $299,999 from excessive rent hikes — which, in the extreme, could run to a few thousand dollars a year. But at the start of the year, many of the same lawmakers were pushing to extend a tax increase that will extract an extra $2,125 a year from a single New Yorker with household income of $250,000. (For couples, the tax hike kicked in at taxable income of $300,000.)
To be sure, the budget resolution ultimately passed by the Assembly redefined the “millionaire tax” so that an extended version would only cover people who actually reported at least $1 million of income. But who knows — at the rate the Assembly is going, millionaires may be eligible for rent-regulated apartments before too long.
Meanwhile, the New York State income tax code continues to impose sharply higher taxes (through what is known as “tax benefit recapture”) on all households with incomes above $100,000, which was considered wealthy when the increase was adopted back in 1991. Somehow the Legislature has never gotten around to adjusting that.
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