Hoboken featured on Bloomberg News
With property taxes sharply increased and job-losses now even affecting previously “immune” Hoboken, I wonder what the near-term Real Estate outlook is for our fair city?
Hoboken’s 47% Tax Rise Sparks Exodus Talk in Manhattan Option
The blue property tax statement Andrew Sapira received in the mail last month from Hoboken, New Jersey, has him questioning whether the city billed as a lower-cost alternative to Manhattan is worth it.
A state monitor, installed after city leaders failed to agree on a budget, ordered a 47 percent increase in property taxes for the 40,000-population community across the river from Wall Street, widely known from its portrayal as a blue-collar shipping port in the Oscar-winning 1954 film “On the Waterfront,” starring Marlon Brando. Payment is due today.
Sapira, a 40-year-old doctor who lives in a four- bedroom brownstone on Garden Street, said his annual tax bill for city, county and school services will jump to about $21,000 from $16,000. The married father of two says he may have to move from the city he loves for its restaurants, night life and proximity to New York.
“That’s a shame, because it’s great here,” Sapira said outside the tax collector’s office in city hall last week after making a payment.
Hoboken, cited in a Business Week and policymap.com study in September as among communities most vulnerable to a Wall Street decline, is a favorite of young professionals. One-third of residents were 25 to 34 years old in 2000, compared with 14 percent for New Jersey, according to the city’s master plan.
Renovated brownstones and new construction within the city’s one square mile (2.6 square kilometers) boundaries have drawn the rich and famous, including Governor Jon Corzine and New York Giants quarterback Eli Manning. The Maxwell Place waterfront development the governor calls home markets three-bedroom units for more than $1.1 million.
The property tax increase hits citizens at a time when New Jersey’s unemployment rate is at a six-year high and with 60 percent of residents telling Quinnipiac University pollsters last month that they are financially worse off than a year ago.
“Businesses are having a hard enough time with the downturn; this is salt in the wounds,” said Stephen Kilnisan, 58, who owns Traders of Babylon Fine Jewelers at First Street and Willow Avenue and will pay $4,000 more to the city this year. “The timing couldn’t have been worse,” he said.
The new rates put Hoboken above the average in New Jersey, which had the highest such levies in the country last year. City residents paid an average $5,780 in property taxes in 2007, compared with $6,796 statewide, which was 5.4 percent higher than 2006 as local governments raised their take to cope with less state aid.
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Discontent is widespread, according to Sapira. “I blame everyone,” he said.
Hoboken’s finances suffered from political squabbles between the mayor and nine-member council even as the city boomed. New Jersey’s local finance board placed Hoboken under state supervision in September after the city missed a deadline for passing a budget for a seventh straight year.
State monitor Judith Tripodi proposed a $120 million budget for the year that began July 1, up from $93 million in fiscal 2008. The higher amount equals about $3,000 per resident. New Brunswick, a city of 50,000 in central New Jersey that is home to Rutgers University, has a budget of $72 million, or $1,449 per resident. The total amount to be raised by municipal taxes in Hoboken surged to $62 million from almost $34 million.
Mayor David Roberts, a second-term Democrat whose term expires next year, said that since he took office seven years ago, taxable real estate within Hoboken’s borders swelled to more than $10 billion from $2.8 billion.
The city has avoided “substantial” tax increases for 16 years, Roberts said, instead using “one-shot” revenue items such as selling city assets to balance budgets. Roberts, 52, blamed the council for not amending and passing his spending plan by the start of the fiscal year.
“The citizens of the city are angry at everyone; they’re angry at all the bickering and the grandstanding that has taken place,” Roberts said. “They feel that because of all the political bickering, they’re being punished. And I can’t say I disagree with that.”
Councilman Peter Cammarano, 31, said Roberts allowed $10 million more in expenditures than what the council approved in the last fiscal year and provided no suggestions for closing the gap, prompting the budget stalemate. Roberts has said the spending was beyond his control.
“You’re talking about blunt force trauma,” Cammarano said. “People are getting hit at the worst possible time and people are already concerned about the largest asset on their books, which is their home.”
Cammarano said he will pay $250 more each month to his mortgage company, which handles taxes as part of servicing his loan. While the increase, which he likens to “a small car payment,” is too much, too fast, there’s no option other than to pay, he said.
Property owners aren’t the only ones hit by higher taxes, said Nicholas Petruzzelli, a Hoboken Realtor and developer. As many as 60 percent of city residents are renters who will feel the sting as landlords pass on the increase in taxes.
Jen Areneo and her husband, who rent a three-bedroom apartment in Hoboken, said the higher taxes will affect the size of the mortgage they can afford when they buy their own place.
“I’m as furious as everyone else,” Areneo, 31, said as she and a friend watched their children in a playground at Church Square Park.
Corzine, a former Goldman, Sachs & Co. chairman, answering reporters’ questions last week during a stop in Jersey City, said he would tell Hoboken residents “that we are trying to work with them, that we are trying to reduce the rate of growth of property taxes or even try to level them.”