HABITAT

CO-OP/CONDO BUYERS

Is the Co-op/Condo Abatement Under Attack?

Kathryn Farrell in Co-op/Condo Buyers on August 8, 2018

Aug. 8, 2018

Earlier this summer, Jessica Katz, executive director of Citizens Housing and Planning Council, a nonprofit education and research organization that supports city housing and neighborhoods, wrote an article in the Daily News in favor of abolishing co-op and condo tax abatements. She argues that the $528 million spent on the abatement each year could instead be used to fulfill the capital needs of the New York City Housing Authority (NYCHA) without increasing the cost to the city.

With a perfunctory acknowledgment that there are indeed some co-op and condo residents in the five boroughs that rely on the abatements to afford their homes, Katz nevertheless dismisses these concerns as irrelevant, since she believes these residents are “few in number and their rebate represents a smaller percentage of the dollar value at stake.”

While supporters both for and against the abatement agree that the New York City property tax structure is in dire need of an overhaul, the Council of New York Cooperatives & Condominiums (CNYC) maintains that the abatements are an absolute necessity for the majority of co-op and condo owners. Below, Stuart Saft, Board Chair of CNYC, explains why the abatement is necessary and how it contributes to affordable homeownership in New York City.

I read with dismay the July 13th Daily News op-ed in which the Citizens Housing Planning Council proposed to “kill” the Property Tax Abatement program for homeowners in cooperatives and condominiums, a program that enables thousands of New Yorkers to afford their apartments. It is dramatic to dwell on the fact that Donald Trump’s luxury apartment once qualified for this abatement, but this is a red herring; kindly consider instead the thousands of ordinary New Yorkers who rely on the abatement program to bring their carrying charges to a level that they can afford. At a moment when New York City housing prices are soaring and when virtually no ‘affordable housing’ is available – we find shortsighted your suggestion to destroy completely this abatement program which makes the dream of homeownership possible for so many! While I very much admire and support your efforts to improve the lives of New Yorkers in NYCHA housing, I urge the Citizens Housing Planning Council to reconsider the consequences of the proposal that you have made.
 
If New York City is to continue to prosper, grow, and be a beacon for culture and business worldwide, it is absolutely imperative that people of modest means be able to afford to live in our city. Without some relief from ever-increasing living costs, there will be no way to attract or to keep the best and brightest as they graduate from colleges, law schools, medical residencies, musical academies, etc.
 
I completely agree that New York City and State must address the desperate need for repairs to our NYCHA housing stock and to provide affordable housing options. However, the level of holistic planning necessary at the City and State levels around property tax reform has been absent for many decades. This situation urgently needs to be remedied, but not at the expense of hard-working New York homeowners in cooperatives and condominiums.
 
The history and purpose of the property tax abatement program for homeowners in cooperatives and condominiums should be borne in mind. A 1993 blue ribbon commission assembled by Mayor Dinkins concluded that the property tax structure in New York City imposed an unfair tax burden on cooperative and condominium homeowners by assessing property taxes that were three to five times the level of taxes paid by owners of the 1, 2, and 3-family homes that make up Property Class 1 in our City. This unfair burden still exists today. In the City’s FY19 Tentative Assessment Roll, the average taxes assessed on 1-family homes was $5,882. For 2-family homes it was $6,077. For 3-family homes it was $7,011. The average taxes paid on a condominium unit? This past year it was $11,172. Grouped in Class 2 with rental buildings, cooperatives and condominiums are subject to much higher taxes than the carefully protected homes in Class 1. CNYC contends, and the Dinkins Commission agreed, that property taxes should be comparable on all forms of homeownership.
 
The abatement program that the Citizens Housing Planning Council seeks so blithely to abolish was designed as an interim measure – a modest first step towards property tax fairness for NYC homeowners in cooperatives and condominiums. The loss of their property tax abatements would doubtless force thousands of New Yorkers – many of them located in modest housing, where the abatement relieves them of 25% to 28% of their tax burden (as opposed to the 17.5% reduction in higher income cooperatives and condominiums) to sell their homes and leave the city. It will be the school teachers and the police officers in our city that may be forced from their homes as a result of this proposal.
 
Housing cooperatives and condominiums are a vital piece to New York’s housing puzzle. They provide homeownership opportunities at virtually every level of the economic spectrum. These forms of ownership enable important spaces for self-governance and vibrant communities where neighbors know and care about one another. They are also invested in improving their neighborhoods through involvement in local schools, houses of worship, etc. New Yorkers who make their homes in cooperatives and condominiums also vote in larger proportion than the general population.
 
Property tax fairness in our city is long overdue and the Council of New York Cooperatives & Condominiums has long advocated for a permanent tax structure that treats all New York City taxpayers fairly and equitably, While awaiting reform, we must protect the abatement program as a vital bastion of fairness for our city’s apartment owners. The Mayor and the City Council have recently appointed a Property Tax Reform Commission to look into this very issue. If this commission functions well, it should focus on fairness for all NYC tax payers.
 
I strongly encourage the Citizens Housing Planning Council to reconsider and retract its startling proposal and to join forces with those seeking constructive and viable solutions to some of our city’s biggest challenges.
 
Stuart M. Saft, Esq.
Board Chair
Council of New York Cooperatives & Condominiums

Ask the Experts

learn more

Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

Source Guide

see the guide

Looking for a vendor?