So we pointed out last week that some of our highest taxed places—New York, Washington, Boston, the Pacific Coast gateways--are the most favored commercial and residential real estate markets, and that many low or no income tax (so-called “business friendly”) states have just as severe budget issues, offer fewer services to their constituents, and don’t rate as high on real estate investor lists.
Now it would be disingenuous to argue that high taxes are good for real estate, but they are not necessarily bad either. The most favored property markets, generally 24-hour places, have more complex and expensive infrastructure and services needs—police, fire, sanitation, water, sewer, road and transit. To keep these more densely populated places operating efficiently—they require more costly and sophisticated government machines. Is there waste and corruption? Sure. Are the public pension plans unsustainable? There’s no doubt that they need to be modified drastically to balance future budgets.
But the business friendly, low-tax places have corruption, waste and pension issues too. Up until now, they also have been benefiting by getting more back from the federal government in funding, earmarks and aid than states with country’s primary 24-hour, gateway markets. Not surprisingly, the gateways—where real estate investors want to be—are also the most productive economic and tax paying generators for the country.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
