Lawsuit Against City Property Taxes Gets Green Light

In a move hailed as the most significant single step in four decades, a Manhattan Supreme Court judge has ruled that a lawsuit alleging the city's property tax system is biased against low-income and minority owners can proceed, Crain’s reports. The ruling is a blow to the administrations of Governor Andrew Cuomo and Mayor Bill de Blasio, which tried to block the lawsuit.

A group called Tax Equity Now New York (TENNY) filed the suit last year, challenging a key aspect of the tax system. Because a state law limited how quickly property taxes can escalate, owners in areas where property values have since soared, such as Manhattan and brownstone Brooklyn, now pay far lower taxes as a percentage of their home's value than owners of properties in neighborhoods of the Bronx and Staten Island. The coalition, which is comprised of unlikely bedfellows from civil rights advocacy groups and real estate circles, argues that this is unfair to minorities, who predominate in areas with higher property-tax rates. 

"Today's decision probably brings us closer to achieving reform of New York City's discriminatory, regressive and unlawful property tax system than any single action taken or commission formed by the city over the last 40 years," Martha Stark, a former commissioner of the city's Department of Finance and TENNY’s director of policy, said in a statement. "As the result of today's ruling, thousands of New York property owners will have their day in court." 

The de Blasio administration readily admits that the system is unfair, but wants it to be fixed by politicians rather than the courts. The plaintiffs agree but say they brought the case because decades have passed without anything close to meaningful reform. De Blasio appointed an Advisory Commission on Property Tax Reform, which began meeting earlier this month on suggesting revenue-neutral reforms to a system that has been infuriating New York homeowners and landlords for decades.