Irvington Cannot Sustain Double Digit Tax Increases

To maintain the excellence of our school district we need to at least keep our budget on a same level. The budget does not even include the health care cost that our School Board Trustee Robyne Camp has mentioned previously. This is a hard task with revenue failing everywhere. There are few Irvington residents who will continue to support, and could afford, annual 10% tax increases.  Another way to balance the budget is to build and sell new houses.

Here is a snapshot of the housing situation in Irvington. Thirty-six properties are available for over $1 million, and a few land divisions are currently on sale that will make available another thirty “McMansions.” Compared to the other segments of the housing market these are obviously in overabundance. Property taxes on these houses are also steeper at more than $40K. I would love to see high net worth neighbors, but it does not make sense to continue to build these types of houses given the present levels of demand.

Current economic trends show that people are actually downsizing to more reasonably-sized homes, and sales of “McMansions” are in decline. Irvington should realize this changing situation and capitalize by seeking to attract individuals and families with high incomes but perhaps more modest housing budgets, rather than those able to purchase outsized real estate. These individuals regularly have higher levels of education, and recent research shows that there is a strong correlation between children’s SAT scores and their parents’ level of education. This upper-middle class could become the bedrock of the Irvington school district population. What home price range is attractive for this demographic? It is easy to compute; the maximum conforming mortgage is $625K for the New York area. Assuming a 20% down payment to lessen the probability of foreclosures, computation indicates starting home prices of around $780K. This means attractive houses would cost between $780K to $850K, with taxes in the $20-22K range and home sizes of 2-3,000 square feet. A look at the real estate listing shows that there are only ten properties available in Irvington village in the price range of $780K to $1 million. This supply is very limited compared to other segments of the market. A further look confirms that the median house price sold in Irvington is $820K.

In my opinion developers should build houses targeting this demographic. There is much more demand and it would be good for all residents. I realize that 2 issues exist. The first issue is that land parcels cost around $800K. The second issue is that builders are tending to try to capture large profit margins on a single house, rather than expend the additional effort to build multiple smaller houses for a lesser profit margin per each individual house. Developers should be encouraged to build such housing. Land should be split into smaller pieces.

Vlad Sakharuk, Irvington

 

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About the Author: Vlad Sakharuk