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Tax Revolt II: The Co-ops and Condos Strike Back Against 50% Tax Increases

Frank Lovece in Board Operations on January 27, 2012

Bay Terrace, Northeastern Queens, Glen Oaks Village

Jan. 27, 2012

And just as the Queens coalition did successfully last year (see "Finance Dept. Admits Computer 'Glitch' in Huge Co-op/Condo Tax Overvaluation" and related articles), Schreiber vows that co-op / condo owners in northeastern Queens will again mount a tax protest, which had involved town-hall meetings with officials, street protests and a City Hall rally.

"We're still formulating our strategy," he says. "My thought would be to absolutely duplicate what we did last year but at a much higher level. We may go forward and demand the resignation of [DoF] Commissioner [David M.] Frankel," a 2008 Mayor Bloomberg appointee, "We may bring an Article 78 proceeding," in which courts can reverse agency decisions that are "arbitrary and capricious." As well, "Since we have elections coming up, we may hold all the elected officials accountable who don’t work to fix this."

Likewise, the Council of New York Cooperatives & Condominiums has announced that its Action Committee for Reasonable Real Estate Taxes is holding an open meeting in Manhattan on Thursday, February 2, at 7 p.m. To reserve a place and learn the to-be-announced location, call (212) 496-1306 or register at workshops@CNYC.coop.

Class Dismissal

At issue is the annual assessed property value of what are categorized as Class 2 properties, comprised primarily of rental buildings, condo apartment buildings not over three stories high, and cooperative apartment buildings. (Class 1 is comprised of most residential property of up to three units and most condominiums under three stories, plus some miscellanea.) DoF spokesperson Owen Stone, who did not respond to a Habitat request for comment, told the New York Daily News this week that that this year's increases were partly due to higher property market values.

But as Schreiber notes, "Commissioner Frankel has always said that according to law they're not allowed to take into account increased or decreased property values — that's not supposed to be part of the equation." Indeed, New York State's Real Property Tax Law, Section 581 requires cooperatives or condominiums to be valued as if they were rentals. This means their values aren't based upon the sale price, but on a comparison to "comparable" rental buildings to create a computer model of what co-op/ condo apartments could theoretically rent for and what a building's income would be from all that theoretical rent. The ultimate result is called the Total Assessed Value (TAS). This figure is unrelated to what a property might or might not sell for in the open market.

"If Owen Stone wants to make that claim" that the increases were affected by higher market values, "we'll go along with that," Schreiber says puckishly. "Because according to records of real estate companies in northeastern Queens, property values have decreased 15 percent."

Bill Me

How are local politicians reacting? State Senator Toby Ann Stavisky (D-16th Senate District) introduced a bill last year to correct what many co-op and condo owners see a basic iniquity: That fact that co-op / condo apartments and even condo townhouses are taxed not as private homes but as commercial properties that bring in rental income. While last year's legislative session in Albany ended in June without concrete action on the bill, Stavisky's office has said she's reintroducing it in this year's current new session. State Senator Tony Avella (D-11th Senate District) plans to offer a similar bill. And City Councilman Daniel J. Halloran (R-Whitestone) has asked that the DoF extend the deadline for co-op owners contest their assessments, from March 1 to March 15.

"The mayor is reluctant to give up the money generated by co-ops and condos, which the city has been using as a cash cow for many years," Schreiber believes. "We've reached out to [City Council] Speaker [Christine C.] Quinn, to the comptroller, and to our own elected officials, and all of them have been supportive. We need somebody who can actually get the city and state on the same page and say 'Let's fix this problem.'"

"It's not enough just to say you're on on our side," Friedrich says of political support. "At the end of the day, actions speak louder than words."

 

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