Section 581: Visualizing Undertaxation

 

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SITU’s drawing highlights 50 of the most expensive luxury co-op or condos in a selected area of Manhattan. 50 of 700 such luxury sales in this area’s public records are visualized here.

SITU’s contribution to a new exhibit at the Storefront for Art and Architecture investigates inequalities incurred by New York State and City property tax code. Titled, Sharing Models: Manhattanisms, the show at Storefront exhibits 30 models and drawings by 30 international architects that represent various ways of reading, understanding, and analyzing the collective assets of urban life. For the exhibition opening on July 14, 2016, Storefront divided Manhattan into 30 section cuts across the city from the East River to the Hudson River, and assigned each to a participating studio. Containing significant residential sections of the Upper East and West Sides centered around Central Park, SITU’s assigned section for the exhibition is bounded by East 79th street to the north and West 62nd to the South. In response to the exhibition’s call to explore the effect of emerging sharing economies on the lived experience of cities, SITU set out to render visible the disparities in property tax code and the loss of shared city revenue through New York’s luxury co-op and condominium market.

Manhattan was split into 30 section cuts for The Storefront for Art and Architecture’s Sharing Models: Manhattanisms exhibition. In the above image, SITU’s assigned section #13 is highlighted in green.

Anachronistic tax code, anonymous shell companies and absentee residents are all distinct characteristics of New York’s luxury housing market. As the veils of limited liability companies are pierced and leaks from Panama converge on the same investments, it is illuminating to render visible the drivers of the built environment across a swath of Manhattan’s most valuable real estate and to project a future in which access and exchange of information play a greater role in shaping the City. It is also a moment to reflect on Michael Bloomberg’s enduring legacy of shoring up New York City’s standing as a hub of international luxury real estate investment and his largely unqualified conviction that concentrations of global capital are a net benefit to all citizens of the City. 1)Capps, Kriston. “Why Billionaires Don’t Pay Property Taxes in New York.” CityLab. http://www.citylab.com/housing/2015/05/why-billionaires-dont-pay-property-taxes-in-new-york/389886/.

SITU’s project, titled “Section 581”, borrows its name from the component of New York state property tax law that sets the assessment practices for Tax Class 2 residential buildings (coops and condos) in New York City. Property taxes on condos and co-ops in New York City are calculated based on an assessment of the property’s value conducted by the Department of Finance (DOF) and are not based on the sales price.

Section 581 follows:

[R]eal property owned or leased by a cooperative corporation or on a condominium basis shall be assessed for purposes of this chapter at a sum not exceeding the assessment which would be placed upon such parcel were the parcel not owned or leased by a cooperative corporation or on a condominium basis. 2) N.Y. Real Prop. Tax Law § 581(1)(a) (McKinney 2013)

In accordance with this law, co-op buildings and condo buildings with at least four units are valued by the DOF as if they were rental properties. These owner-occupied units are some of the most expensive in the city, yet they are compared to rental units across variables such as location, date of construction, and building size to determine their market value. According to the report published by the Furman Center in July 2013 titled, “Shifting the Burden: Examining the Undertaxation of Some of the Most Valuable Properties in New York City”, the most valuable rental buildings in Manhattan are valued by the DOF at well under $500 per square foot. The market has seen luxury condo sales typically made at a much higher expense per square foot — often in the $4500 range. 3)Yager, Jessica, and Andrew Hayashi. “Shifting the Burden,” The Furman Center, July 2013. http://furmancenter.org/research/publication/shifting-the-burden.

The incongruities of such comps become evident even though a quick reading of the physical structures and amenities of the units themselves, as well as in the demographic characteristics of the people who live in them. In the case of newer luxury condos there are almost no rental buildings that are truly comparable. Furthermore, nearly 30 percent of rental buildings selected for comps are also rent stabilized, confounding the notion of arriving at co-op market values based on comparisons in rental income (rent stabilized income is artificially limited and therefore not subject to the market). The Independent Budget Office estimates that citywide, the discount this assessment system creates—which is referred to as the 581 discount—for condos is about 82 percent; for coops it is around 77 percent. In other words, only 18 percent of the market value of condos is included in the tax base. 4)New York City Independent Budget Office. “Twenty-Five Years After S7000A: How Property Tax Burdens Have Shifted in New York City,” December 2006, http://www.ibo.nyc. ny.us/iboreports/propertytax120506.pdf

While the inequalities engendered by the real estate market leave many signatures on New York City’s built environment, the arcane model of calculating property tax and the misalignment of this process with the realities of the contemporary market are particularly acute. This condition is concentrated in the most expensive properties in the city – many of which are located in the area assigned to SITU by Storefront. We set out to explore this in greater detail through both physicalizing the relationship between sales prices and assessed values in our model and creating a drawing that unpacks selections of the underlying data.

As part of our research for this project, SITU delved into available open data published by the NYC DOF and Department of Information Technology and Telecommunications (DoITT). Making use of NYC’s rich information commons, the model and drawings are based on analysis of available financial and geospatial datasets in the public record. Comparison figures for assessments draw from the Department of Finance’s property assessment roll for fiscal year 2017. Sales data were gathered through the DOF’s rolling and annualized datasets from the last 13 years (2003 to June 2016). Our process focused on the luxury co-op and condo sales in our section that were present in the data, of which there were 700.

SITU found significant discrepancies in valuation. One of the most expensive recorded sales in our section was $33,000,000 for a single co-op unit in an 111 unit building on Central Park West. The city assessed the entire market value of the building –all 111 units– at $60,722,00 for the fiscal year 2017, only $28,000,000 over the sales price for just a single apartment in a luxury building of many. The sale price of that $33,000,000 apartment is nearly 60 times its value assessed by the DOF for tax purposes.

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Detail of the drawing focusing on Tax Class 2 luxury sales along Central Park West.

In SITU’s section of Manhattan, the highest disparities are concentrated along Central Park West and along Park Avenue, where some of the most expensive apartments in the entire city are located. Expanding this analysis across our area of interest reveals a total undervaluation of around $5.2 billion dollars in the luxury condo and coop market.

The drawing unpacks selections of the underlying data. It identifies the 50 most expensive of the 11,000 undervalued unit sales in our section and compares their respective sale prices to the values used for property tax assessment. This study represents a small fraction of the lost property tax revenue that could be captured across the entire city. As a general trend, the more expensive the sales price, the more extreme the disparity, in some cases numbering in the tens of millions of dollars for a single unit alone.

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In SITU’s study section of Manhattan, the highest disparities are concentrated along Central Park West and along Park Avenue, where some of the most expensive apartments in the entire city are located (highlighted in green).

In the model, the height of the acrylic surface above a coop or condominium building represents the relative magnitude of difference between sales price and assessment value. It seeks to present a skewed reality wrought by Section 581 that is difficult to see: a real estate market that has benefited an elite class of New York home owners and disproportionately burdened the less wealthy with the funding of public life and works in the city.

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13_SITU_Section581_Model_Plan

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13_SITU_Section581_Model_Detail6All photos are by Patrick Mandeville

 

References   [ + ]

1. Capps, Kriston. “Why Billionaires Don’t Pay Property Taxes in New York.” CityLab. http://www.citylab.com/housing/2015/05/why-billionaires-dont-pay-property-taxes-in-new-york/389886/.
2.  N.Y. Real Prop. Tax Law § 581(1)(a) (McKinney 2013)
3. Yager, Jessica, and Andrew Hayashi. “Shifting the Burden,” The Furman Center, July 2013. http://furmancenter.org/research/publication/shifting-the-burden.
4. New York City Independent Budget Office. “Twenty-Five Years After S7000A: How Property Tax Burdens Have Shifted in New York City,” December 2006, http://www.ibo.nyc. ny.us/iboreports/propertytax120506.pdf

SITU and OMA team lead design apprenticeship at Citizen Schools

Over the past few months, SITU and OMA partnered on a semester-long project titled “Design It” at The Urban Assembly Unison School in Clinton Hill, Brooklyn. The course sought to bring architectural education and concepts to sixth grade students as part of Citizen Schools – an organization that partners with middle schools to expand the learning day by promoting student achievement and re-imagining education outside of the classroom. Working closely with Citizen School teachers and staff, SITU and OMA led students through an urban design “apprenticeship” to transform an existing bus stop in their Brooklyn neighborhood. Over the course of the semester, the students learned about the fundamentals of site analysis, drawing techniques, and model building. The apprenticeship culminated in a final project presented to teachers and family at SITU’s DUMBO offices.

sneaker storeStudents striking a pose with their new stylish hats after a visit to Vinnie’s styles – a clothing and sneaker store near the Fulton Street site – which inspired and influenced their design.
03.560Students presenting their research and site analysis.
01.567Students presenting their work at SITU Studio’s office
02.567Closeup of the “Mall of Jammin’ Sneakers” model created by students

Making: James Turrell’s Three Saros


Video by SITU Studio

SITU Fabrication was brought on as a specialty consultant and contractor to engineer and oversee the construction of an installation for artist James Turrell which serves as the centerpiece of a new, midtown corporate office designed by Shelton Mindel & Associates and Architecture+Information. Working closely with James Turrell’s design team and the project architects, a number of formal and material iterations were evaluated prior to arriving at a 24′ tall, 2-story volume with a seamless GFRG interior and a polished solid surface exterior.

Three Saros

Photograph: Michael Moran/OTTO

SITU assembled a team consisting of Laufs Engineering Design for structural design and Art in Construction for GFRG fabrication to develop the means and methods for the construction. SITU worked with a 3D model to coordinate the variety of trades that had to fit within the doubly curved 14″ wall construction, including structural steel, light gauge framing, lighting, electrical, mechanical, and sprinklers. In addition to serving as lead coordinator, SITU also fabricated the thermoformed solid surface exterior cladding, all the molds for GFRG production, and any templates and precision mounting brackets.

Three Saros

Photograph: Michael Moran/OTTO

From the earliest phases of the project, SITU saw an opportunity to document the design and fabrication process as its own act of making. As with many of the artist’s large room-size installations the completed Three Saros project envelops the viewer in an immersive environment – free of surfaces, edges, light sources and vanishing points – capable of evoking a ganzfeld experience where information is subtracted from the visual field. Therefore, in the completed project, much of the architectural environment is only legible from sculpture’s exterior – as an object within the lobby volume. Over the course of the project SITU captured time-lapse, still and video content to both document and preserve the work that is, in the end, veiled by the beauty of the art.

Three Saros

Photograph: Michael Moran/OTTO

To learn more about Three Saros please visit our project page here.

SITU teams up with Brooklyn Solar Works to create Solar Canopy

SITU Studio has teamed up with Brooklyn Solar Works to develop the residential Solar Canopy – a modular rooftop structure that incorporates PV solar panels affixed to a lightweight, adjustable aluminum frame. Solar Canopy offers significant cost savings for homeowners — from federal and state tax credits, to an NYC tax abatement — Gaelen McKee President of BSW believes “now is the absolute best time to go solar.” According to US Green Buildings Council, buildings and homes in the US currently account for 60% of our country’s total electricity usage.  Switching to solar provides alternative power sources that decrease our dependency on fossil fuels and increase our use of renewable energy.

15_0607_brooklyn solar works_rendering_rk_forblogRendering of Solar Canopy

The Solar Canopy project is an exciting opportunity for us to work closely with our friends at Brooklyn Solar Works in the design and fabrication of the first prototype. Solar Canopy has the potential to be both replicable and customizable depending on roof size and structure as well as the particular solar capacities of the location. Ben Duarte, project manager at SITU Fabrication will walk us through the design process.

The first step is to survey the existing rooftop. In our collaboration with BSW we’re looking at applications at residential properties in existing Brooklyn neighborhoods and therefore must account for adjacent structures, foliage, roof penetrations and roof access – all of which play a role in the location and size of Solar Canopy. In addition, the Department of Buildings (DOB) requires a 6’ wide path of travel to the nearest stairway in compliance with the fire code, as well as a 9’ firefighter clearance height. We like to think of this as a 6’ wide x 9’ high volume that provides the minimum height and width for occupiable space beneath the canopy.

Elevation drawing showing the minimum 9′ height requirement

The second design factor and major consideration is the material size and shape of the structure. Attachment to an existing roof structure presents certain limitations and unknown variables, so careful attention must be paid to the location of anchor points and any perforations into the existing building envelope. With these factors in mind, SITU set about designing a canopy that contains both fixed – replicable, standard components – while also offering site specific adjustments. Aluminum was chosen for its lightweight properties, a revision from the original proposal of using steel tubes and speedrail fittings.

Exploded axonometric of one pre-fabricated truss and rails.

Pre-fabricated aluminum metal trusses serve as beams to support the rails upon which the solar panels are attached, offering maximum ease of maintenance. The feet sleeve into the legs allowing height adjustability – up to 18 inches. The feet also have a cleft end with a central pivot hole that can be attached anywhere on the roofing rails. The panels come in standard sizes which determined the overall size and shape of the Solar Canopy structure – roof applications vary from 15 to 35 PV panels per canopy and have the capacity to supply most typical household electricity usage.

After nearly a year in development, the engineers of record calculated the weight of the structure on the roof, including maximum wind and snow loads. The canopy structure was approved and sent off to the DOB where it is currently waiting on city approval.

The first installation is set to be completed in a few weeks– check back for a project update!

SITU Research Launches SPEA Project

Bil In1

Image courtesy of SITU Research and Forensic Architecture.

SITU Research is pleased to announce the launch of Spatial Practice as Evidence and Advocacy (SPEA) – a project that will utilize spatial analysis and visualization in the service of human rights fact-finding and reporting. Mobilizing innovative applications of existing and emerging technologies, a primary goal of SPEA is to broaden the “tool kit” and culture of human rights work to include design as an integral component of legal and advocacy initiatives.

Made possible in part by the generous support of the John D. and  Catherine T. MacArthur Foundation and the Oak Foundation, SPEA will undertake applied casework with human rights organizations, news outlets, legal counsel, scientists, and researchers to generate reports targeted at synthesizing diverse forms of evidence into precise, coherent and compelling spatial narratives. Further, the SPEA project seeks not only to represent consequential data in the most effective way, but also to extend the impact of these often technical and prosaic findings through public-facing, interactive reports.

As a cross-disciplinary project, SPEA has a unique opportunity to bridge the gaps that traditionally separate and segment the fields of human rights and design. SPEA will build upon the long-form textual structure of traditional human rights reporting with the integration of spatio- visual content that can enrich the analysis of specific human rights violations. Work will focus on the collection and synthesis of disparate forms of evidence, both quantitative and qualitative, that may be gathered in a specific case (e.g., satellite imagery, video footage, the verbatim testimony of witnesses, munitions specifications, etc.) Over the next 22 months, SPEA will collaborate on a series of reports that will be made available to the public. Examples of other human rights cases that SITU Research has worked on can be found here.

Rethinking Brooklyn Museum’s Entry Experience

In January, SITU Studio was commissioned by the Brooklyn Museum to re-envision its entry sequence – incorporating flexible, modular interventions in the Glass Pavilion and Lobby space as part of a larger Bloomberg Connects initiative – a project that seeks to imagine new roles for technology to enhance visitor experience.

Working closely with the Museum, SITU has developed a collection comprised of individual components – from interactive hubs and ticket bars, to benches, security desks and improved signage, banners and stanchions (in collaboration with graphic design firm MTWTF) – that combine in inventive ways to offer optimal program support within Brooklyn Museum’s public lobby area.

mockupMock-up of power benches

The design of the suite incorporates a high degree of flexibility that allows for continuous reconfiguration. Casters facilitate smooth transport and storage while outlets embedded in benches provide power to charge mobile devices such as phones, cameras and tablets. One of the primary goals of the Museum’s Bloomberg Connects initiative is to cultivate increased engagement between Museum staff and visitors. The components of the suite play a key role in reinforcing and facilitating this goal but none more so than the “hub” which serves as a resource and a platform – both digital and physical — shared between museum staff and visitors sparking inquiry and conversation. The translation of the admission booth to ticket bar – opening up and welcoming in visitors upon arrival reinforces this initiative. Designed to aggregate and disaggregate the bar transforms rapidly depending on programmatic use.

2015 03 20 hub2 (1)Hub plan, section and elevations

SITU partnered with MTWTF to find ways for the architecture and graphic design to complement one another, as well as with Arup Transportation who further identified and underscored the relationship between furniture and graphic layout.

image 3Glass Pavilion and Lobby plan

The greatest ambition of this project is the transformation of Brooklyn Museum’s entry into a well-used, highly trafficked and truly successful public space. Over the coming weeks we will be fabricating the suite in our Brooklyn Navy Yards facility and posting progress frequently on Instagram and Facebook. Check back weekly to see progress as Bloomberg Connects comes to life.

_IMG_9131_sMockup of power bench for onsite testing

Brooklyn Artists Ball

SITU Studio was invited by the Brooklyn Museum to participate in this year’s Brooklyn Artists Ball. Now in its fifth year, the event honored outgoing Museum Director Arnold Lehman as well as artists Takashi Murakami, Kiki Smith and Jean-Michel Basquiat, as represented by his family, all of whom have made a lasting and profound impact on the Brooklyn cultural community specifically and New York as a whole. SITU was one of eight practices – all of whom are Brooklyn based – invited to design and install environments and tablescapes for the one-night-only event. On April 15th the Museum’s Glass Pavilion, Lobby and Beaux Arts Court, were transformed into an immersive experience replete with models donning crocheted garments to large papier-mâché iterations of food dangling from the center of the court space creating an overall environment that was as much a visual feast as fête.

Tasked with the challenge of producing a dynamic intervention in the Glass Pavilion, SITU welcomed the invitation as an opportunity to experiment with a fabric installation. SITU worked with a variety of industrial and construction grade nets often used to protect sites from falling debris and ultimately settled on shade netting found in agricultural applications. The material, a woven aluminum screen typically stretched horizontally, in this instance is instead hung vertically. Functioning as a progression of light-filtering layers, the installation both reflected and transmitted event lighting choreographed by Ken Lapham in dynamic and playful ways.

 Timelapse of SITU’s installation IllumiNetting in the Glass Pavilion.
IllumiNetting’s light-filtering layers capture the festive mood in the Dance Party space. Photo by Keith Sirchio

From street artists to set designers and everything in between the Artists Ball featured works by Duke Riley, Faile, Fernando Mastrangelo, Jen Catron & Paul Outlaw, Olek, Dustin Yellin and Pioneer Works inviting the 750 guests to dine among battleships (Riley), crocheted tablecloths, (Olek) cheese wedges and turkey legs (Catron & Outlaw) to name just a few. Guests at Faile’s table, the work of artists Patrick McNeil and Patrick Miller, donned sunglasses to protect their eyes from the bright lights of the designers’ massive illuminated comic strip table.

Crocheted artist Olek’s tablescape draws inspiration from the work of honorees, Murakami, Smith and Basquiat.
Photo by Liz Ligon courtesy of the Brooklyn Museum
photo (9) Jen Catron and Paul Outlaw – perched high above guests – enlivened the dinner with their over-sized food.
FAILE-Table-Photo-Credit-Elena-Oliva

A night to celebrate Arnold Lehman and everything he has contributed to the Brooklyn Museum, the Borough and far beyond, it was a special evening and a snapshot of the impact he has made over his seventeen years as Director.

Recent press about the event can be found here:
Artnews

Forbes

Town and Country

Design Leadership Summit 2014: Design Build in Brooklyn

 

SITU was invited to this year’s Design Leadership Summit to speak on a panel moderated by Anne Hellman-White, author of Design Brooklyn. The video of the “Design Build in Brooklyn” conversation with SITU partner Brad Samuels, Daniel Husserl (Uhuru), and Jeff Sherman (Delson/Sherman Architects) may be viewed here.

Held at Industry City in Sunset Park, the panel discussed working as designers and makers in Brooklyn. All three panelists spoke about the importance of establishing a practice in a creative community with the resources to collaborate with expert craftsmen, artisans, and designers who support local manufacturing. Industry City provides an excellent example of the ways in which businesses are growing in proximity to one another. In doing so, designers are finding ways to innovate by sourcing community talent, utilizing efficient technologies, and producing experimental design work.

The Design Leadership Network hosts a yearly summit to bring design principals and professionals together for purpose of building relationships, learning, sharing ideas, and growing together as a community.

Unven Growth: The Other New York

The Other New York, 2014. Design by SITU Studio, Video produced and directed by Brooklyn Digital Foundry.

 

SITU’s work for the Uneven Growth exhibition – which opens to the public this Saturday November 22nd at The Museum of Modern Art – focuses on the informal component of New York City’s housing market and seeks to place it squarely within conversations about affordability. The condition of unevenness in New York is distinct from some of the other cities featured in the show in that it is often concealed from view – at least with respect to housing.

Our contribution to Uneven Growth addresses the hidden density of New York’s informal housing not by trying to shift residents elsewhere, but rather, by proposing a way for communities to thrive within the neighborhoods they already inhabit. By focusing on tactical interventions, additions and renovations of existing housing stock, we envision a landscape of accretive architectural proliferation that populates rooftops, backyards, industrial buildings and other available spaces.

Taking this vision even further, we also propose a new mixed-use, mixed income infill building typology that provides a direct link from the public street up to the new roof-scape and behind to courtyard spaces. Facilitated through a novel financing model that aims to energize nearby urban hubs while also supporting local transportation and other infrastructural investments, a new form of incremental growth is catalyzed to produce a more equitable New York.

Uneven Growth: Community Growth Corporation (CGC)

The Community Growth Corporation, Jesse M. Keenan, MAS Summit 2014

As part of its research for the Uneven Growth project, SITU worked with Jesse Keenan of the Center for Urban Real Estate (CURE.) to propose an ownership and development model focused on capturing the value of unused air rights in the service of funding affordable housing.  In addition to working closely with Jesse, the Furman Center’s guidance and work on Transferable Development Rights was an essential component of this research.  This post focuses on SITU’s strategy for unlocking development rights as one approach to addressing the affordability crisis in New York on a localized level.  The CGC proposes a scenario where underutilized urban spaces could be opened up to a new type of incremental growth facilitated through neighborhood based organizations called Community Growth Corporations. In the below video, Jesse Keenan explains the principles and mechanics of the CGC at this year’s annual Municipal Art Society Summit.

 

CGC1. Redistribution of FAR in the outer boroughs.

The Community Growth Corporation (CGC) is a hypothetical development model meant to align social and financial capital in a way that allows for the preservation of affordable housing and the creation of community-driven neighborhood projects. The mechanism for capitalization is a public auction of excess floor area ratio (FAR) within a community that would otherwise go unused, or where the cost to build to the FAR outweighs the benefit of added interior space. Excess FAR is then exchanged for a share of the CGC. Altering the existing regulations so that FAR is no longer restricted to contiguous properties, but instead can be aggregated – forming new kinds of development– both low-rise affordable housing or higher rise mixed-income developments in adjacent neighborhoods that are suited for denser development (Image 2).

 

20141114_CGC44. Intra-borough Receiving and Donating Zones.

“Receiving Zones” are identified as areas that are capable of accepting increased density due to the availability of space as well as existing access to transportation infrastructure. “Donating Zones” are identified as areas that are currently over-populated and are severely rent-burdened, meaning that on average households spend more than 50% of their income on housing. The transfer of FAR between the two zones can only occur if they are adjacent.

 

20141114_CGC33. FAR Bank and redistribution of FAR

By exchanging excess FAR for shares in the CGC, landowners of properties with affordable housing receive modest investments returns that must be used to renovate or further develop the property. These returns are attached to the property itself rather than its owner in order to ensure that investment in affordable housing is continual, especially in neighborhoods that are already over populated and rent-burdened. All residents are able to gain shares in the CGC, regardless of whether or not they are landowners, through “sweat equity” – participating in street and public space improvements, engaging in senior care activities, coordinating transit pools, etc. Returns for these CGC shareholders come in the form of unit renovations or as rent credits, ensuring the advancement and quality of affordable housing.

 

20141114_CGC64. Participation in the CGC.

A CGC web interface would allow shareholders and community members to manage how their returns are both distributed, personally and within the larger community. A portion of yearly returns would be allocated to community developments ranging from schools to bike lanes and the interface would allow community members to participate in the decision-making process.

The CGC is predicated upon the commodification and a redistribution of the public asset of the right to build to ensure another right – a right to housing.

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