New York's Cooperative and Condominium Community
Shelley Cohen in Legal/Financial on August 21, 2018
Earlier this summer, we reported that Citylights, an affordable Long Island City, Queens, co-op built by the New York State Development Authority in 1996, saw its 20-year tax abatement expire in 2016. That year, the city’s Department of Finance assessed the 522-unit high-rise building at $51.7 million. This year the assessment jumped to $101.6 million – an increase of nearly 100 percent in three years. Writing in Crain’s, Citylights shareholder Shelley Cohen calls on the city to provide the co-op – and the rest of the city’s homeowners – with long-delayed reform of the archaic property tax system.
As criticism of our city’s outdated property-tax system grows louder, members of the newly created NYC Advisory Commission on Property Tax Reform met for the first time last month. The commission’s stated goal: to recommend reforms that will make the tax code fairer for all New Yorkers. They’d better hurry.
As a resident of Citylights, I know for a fact that there are thousands of New Yorkers who need help right now. In fact, maybe we should skip the commission and go right to the solution.
New Yorkers of modest means who live in buildings like Citylights or own single-family homes are often hit with much higher property taxes than wealthier homeowners. It’s not just unfair; it’s economically devastating to those who can least afford to be squeezed by the tax man.
Why does this happen? Put simply, the tax code is decades out of date.
Citylights is a tragic example. Because of the archaic code, our property tax is not based on the market value of our apartments. Instead, my family and my neighbors are taxed based on a convoluted formula. All this added up to a $5.8 million tax bill leveled recently against us by the city, which calculated it by comparing our affordable, no-frills property to new, amenity-filled luxury high-rises nearby.
When it was built in 1996, Citylights was the first major high-rise in what was then a desolate Long Island City. The co-op complex was built by the state as affordable housing for middle-income New Yorkers. Families and individuals bought apartments under the promise that they would stay that way. But then the state made a series of decisions which set Citylights up to fail financially, including an $85.6 million mortgage and engineering problems which required $10 million in repairs.
Meanwhile, city government has been cruelly indifferent. Aside from fixing the entire tax system, Mayor Bill de Blasio could also help save Citylights with the stroke of a pen by letting us negotiate a fairer deal directly with the state. We have begged. He has ignored us. Perhaps what the mayor is really worried about is acknowledging the much bigger problem: the city Department of Finance unfairly assesses the taxes on hundreds of buildings across the five boroughs.
Either way, the mayor should get to work on saving Citylights. We cannot afford to pay for the mistakes made by our government. And we cannot wait for the tax commission. Our middle-class and fixed-income residents already pay more in mortgage and maintenance fees per month than our luxury neighbors pay in rent. Many are finding it difficult to sell their homes because buyers are unwilling to take on the huge costs. Some residents may lose their homes because they can’t afford their monthly payments.
For my husband and me, moving in to an affordable apartment in Citylights was a dream come true. We didn’t have a lot of money, we were just starting a family – and we were able to own our own home.
We still do. For now.
Engage, enrage, ask questions and give answers with your community of board members. Submit your questions and comments here!
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.
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
Got elected? Are you on your co-op/condo board?
Then don’t miss a beat! Stories you can use to make your building better, keep it out of trouble, save money, enhance market value, and make your board life a whole lot easier!