Once a center for shipping, Brooklyn's Red Hook (now called "Carroll Gardens" by some) was one of the city's most blighted, crime-ridden neighborhoods. That made for some real estate bargains -- and recently the area has seen an influx of young professionals. Affordability declines as cachet increases (especially in the recent boom). And neighborhoods in transition, like this one, yield us a trove of assessment jaw-droppers. (Thanks to Mirella Landriscina for photos and legwork on this section.)

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"Smith Street"

This is a 25 x 55 vacant lot at the corner of Smith and Warren; no street address is listed in the assessment rolls. Notice the friendly green globes of the adjacent subway station. The tax Class is 4, and the city says the land value is $44,700, or $32.50 per square foot. Current tax bill is $1,908.

The yellow building next door is 178 Smith, a 3-story building on the same size lot. The city tells us that the parcel's market value is is $209,000, of which the land accounts for $73,900 -- much more than the corner lot next door! The city's MV has gone up by $54,000 since 2004 -- economically a rise in land value, for the building has not changed. The burden is transferred to the building, however; NYC says that land value has increased by only $24K. Its current property tax bill is $6,088.

62 Butler Street

Here is a single-story dining/drinking establishment. The building covers the entire 25 x 60 lot, and the tax class is 4. The city tells us that the land value per square foot is is $38.76 -- and the total market value is $156,000. Beteeen '04 and '06 NYC says the land value dropped from $60,780 to $58,140, while the building value increased by 39,880! (Due to its distinctive architecture? Its landmark status?)

Oddly, a nearby one-story garage, at 303 Bond Street, sold in April, 2006 for one and a half million dollars. The lot was a bit larger (48 x 75) but it was not on a corner. For this kind of money, the value of the one-story building is negligible. Let's allow a generous $100,000 for removing it; that leaves us with a per-square-foot land value in this neighborhood of $388 -- a full order of magnitude greater than the value given for the lot pictured here.

335 DeGraw Street

The dimensions of this Class 1 parcel (40 x 100) are a bit hard to figure out. The 40 foot side is on Smith St.; the 100 ft. side is on DeGraw and includes the 2-story house and garage, and the garden (parking lot?) that occupies the roughly 40 x 40 corner section of the lot. Because this is a Class 1 property, assessments are based on comparable sales, of which there have been many in this neighborhood; the city said this parcel's market value for '06 was $1,445,000. The property tax bill for '06 was $5,391.

Right around the corner at 348 Sacket St., a similar Class 1 parcel sold for $1,260,000 in December, 2005. It had a three-story building on a 20 x 100 lot. Its 2006 property tax bill was $2,274, or 0.18% of the selling price.

There's a bit more to the story here, which points out the unfairness that's built into the tax system. The city's market value for 335 DeGraw went up by $315,000 between 2004 and 2006. This was due to a real estate bubble, and the practice of comparable-sales assessments for Class 1. A politically-unfeasible increase in property tax could have been avoided by assessing the land value accurately and then simply lowering the rate, but New York doesn't do that. Instead, it imposes limitations on how much the assessed value can actually increase. The tax bill at 335 DeGraw went up by $586 between '04 and '06.

To explore the implications of this issue, let's hop across the river for a moment, to the two-story Class 1 parcel at 157 East 35th Street in Manhattan. This sold in August 2006 for $6,550,000. The lot is 25 x 98, and the current land valuation $1,730,000.

360 Smith Street

We're at the corner of Smith St. and 2nd Place. There's a 10 x 10 newsstand on the corner; the lot is 82 x 114. Class 4. In 2006 the city said the land value was $255,000 (It said $209,000 in '04.) The shape is irregular, but the value PSF is approximately $27. Do you suppose the newsstand's rent covered the $11,518 this parcel was charged in taxes this year?

The 16 x 100 lot next door at 125 2nd Pl. -- Class 1 -- is currently valued by the city at $1,598,000, but its land is only supposed to be worth $108,000 -- and a bit of the land value is exempt. This land ought to be worth less per square foot than the large corner lot. But let's give them the benefit of the doubt and say it is the same PSF; that would make the land worth $43,200 -- meaning, NYC would have us think that this 3-story walkup apartment building is worth over a million and a half dollars! Either Red Hook is loaded with historic landmarks, or building owners (and their tenants!) are getting socked with taxes on land value gains.

189 & 191 Smith Street

Here are two single-story Class 4 parcels. The store on the corner is 189 Smith; the Emerald bar is 191. One eighty-nine's lot is 25 x 80, and the building is 25 x 55. The city's "market value" figures were $104,000 in '06 and $98,700 in '04. NYC claims that land value is 79% of the total, but the building is a tear-down, so we'll assume a per-square-foot value for the entire MV, at $52.

Next door at 191 Smith, the lot is 50 x 100. Hard to figure how the 50 x 90 building qualifies as having two stories, but it is listed as such. The city's MV was $236,000 in 06, and $222,000 in '04, at which time they figured that land value was 65% of total value. But if one added this lot to the one next door, one would get a sweet 75 x 80 corner lot, with a bit left over in the back. So figure this building is a tear-down too; that means the city's PSF value is about $47.

Meanwhile: a nearby vacant lot, at 398 Bond Street, 25 x 60, sold in November, 2005 for $390 per square foot.

And last, but not least:

56 Nelson Street

A 22 x 100, Class 1 vacant lot, directly in the shadow of the giant elevated freeway intersection at Hamilton Avenue. This is undeniably a far poorer location than any of the others discussed here, yet it sold, in July, 2006 for over $71 per square foot. That's more than twice the city's PSF figure for that nice corner lot, beside the subway station, at "Smith Street" shown above!

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