What It Might Cost the City

If TIC loan rates fall into line with condominium loan rates, what might that cost the City?

Let's assume there are 750 TIC buildings in the City, and they all decide to get fractional loans and forget about condo conversion.

750 buildings will no longer spend $150 on condo lottery tickets. The City loses $112,500.

750 buildings will no longer spend $600 (on average) getting condo conversion inspections. The City loses $450,000.

750 buildings will no longer spend $8,400 (on average) in condo conversion application fees. The City loses $6,300,000.

The City is going to lose about $6,862,500.

This doesn't include the additional property tax revenue that results when a TIC building converts to condos and an owner sells at the higher market rate currently ascribed to condos. The difference between TIC and condo valuation might evaporate if fractional financing comes into alignment with condo financing.

(This calculation was inspired by a conversation I had in the hall this afternoon with the owner of unit number 2.)