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LEGAL/FINANCIAL

Battle Lost, but War to Reform Property Taxes Continues

New York City

No Rebate
June 13, 2018

The first battle has been lost, but the war on the city’s broken property tax system marches on.

A City Council proposal to grant a $400 rebate to all homeowners earning less than $150,000 failed to make it into the $89.15 billion budget deal struck between Speaker Corey Johnson and Mayor Bill de Blasio, Crain’s reports.

While that opening skirmish has ended in defeat, the larger campaign for substantive tax reform continues. Leading the charge is a seven-person panel that will endeavor to make the city’s property taxes “simpler, clearer and fairer,” according to the mayor’s office. Advocates frequently charge that the current property tax system unfairly shifts the tax burden to landlords of rental buildings in the outer boroughs while offering comparatively lower tax rates for owners of one- and two-family homes, condominiums and co-op units, particularly in wealthier neighborhoods. In another front in the ongoing war, a coalition of activist groups and real estate developers known as Tax Equity Now New York (TENNY) has sued the city, claiming that the city’s property tax system is not only unfair and unconstitutional, but also racially discriminatory.

The commission will examine the four-tier tax classification system, the methods of determining property market values and assessments, and the method of calculating tax rates, Commercial Observer reports. The group will hold at least 10 public hearings, which have yet to be scheduled. 

TENNY’s lawsuit, according to the group’s members, spurred the mayor and city council to create the commission. “Without TENNY, this latest iteration of a property-tax commission would have never happened,” says Martha Stark, TENNY’S policy director. “The difference this time is that our litigation isn’t just about unfairness, it’s that the property tax is illegal and unconstitutional. While we hope this commission will promptly address these issues, history has made us skeptical that anything will change.” 

Oral arguments will be heard in TENNY’s lawsuit today.

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