The Meter is Running
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When HDFC taxes balloon, someone isn’t paying attention.
AUTHORJosh Koppel, HSC ManagementWhen HDFC taxes balloon, someone isn’t paying attention. HDFCs offer different tax structures and reduced charges, so boards and management have to stay on top of them.
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HDFCs offer different tax structures and reduced charges, so boards and management have to stay on top of them.
I manage a 150-unit Housing Development Fund Corporation (HDFC) complex in Harlem that covers an entire city block. The property consists of two buildings that are not physically connected but share a boiler. As an HDFC, the corporation is entitled to a reduced property tax charge, a special tax classification for low-income co-ops, which keeps their taxes from going through the roof. Something was clearly wrong, however, because over a seven-year period, this complex saw its real estate tax bill increase by 1,800 percent – from $10,000 to $630,000 a year – an extraordinary burden for the low-income residents. For years, we fought to get the proper exemption in place. The problem was that, during the property’s original co-op conversion, the correct paperwork was not filed with the Department of Finance; as a result, the HDFC never received the tax exemption to which they were entitled. We hired an attorney who swore he could straighten things out. Nothing happened, and, in 2015, the HDFC’s taxes were about $800,000 in arrears, with a new $600,000 tax bill for 2016 on the horizon.
I called Scott Goldberg from Metropolitan Refunds, who investigates and challenges errors in property tax determinations. When we explained our case, he replied with confidence, “I’ll take it.” After seven years of broken promises and abandonment by professionals we hired to help us, Scott, the board, and management pushed forward together. We never gave up. Instead, we continued to look for new solutions. With Scott’s help, the HDFC finally received a refund check for $1.8 million. Our taxes for the next 21 years are locked in at approximately $100,000 – down more than half a million dollars from $630,000. Over the next ten years, we will save over $10 million. The HDFC is saved.
Never stop pushing. In this case, we kept going, pushing whoever’s buttons we could push to get something done. If one thing didn’t work, we tried something else. And then something else again. The moral to this story is never give up, and don’t accept “no” for an answer, even when everyone is telling you, “There’s nothing you can do.” It may be hard, and it may require enormous patience, but there is a way.