New York's Cooperative and Condominium Community

Habitat Magazine July/August 2020 free digital issue

HABITAT

LEGAL/FINANCIAL

HOW LEGAL/FINANCIAL PROBLEMS ARE SOLVED BY NYC CO-OPS AND CONDOS

Property Tax Reform Proposals Will Be Revealed “Soon”

New York City

Property tax reform, assessed value, tax-hike caps, TENNY, co-ops and condos.

Be careful what you wish for: property tax reform might finally be at hand. Some will suffer.

Dec. 16, 2019

Marc Shaw, head of the city’s Advisory Commission on Property Tax Reform, tells the Gotham Gazette that its long-overdue proposals will be on the table “soon” – probably by the end of the year.

The commission was created by Mayor Bill de Blasio and City Council Speaker Corey Johnson in May 2018 as a way to lay the groundwork for reforming a system often described as byzantine, illogical, and unequal – and one that is largely controlled by the state legislature. Those inequities have brought a lawsuit by a coalition called Tax Equity Now New York (TENNY), which claims the current system is racially discriminatory and unconstitutional. The coalition is composed of some odd bedfellows, including deep-pocketed landlords and civil rights advocates. De Blasio has argued that reform should come through legislation, not the courts. 

The commission held public hearings in 2018 but has worked out of public view for most of 2019. Once it presents its long-awaited reform proposals, de Blasio says two things will happen. “Some [recommended changes] will be part of city law, which means they can be voted on by the city council, and then I decide of course whether to sign or not,” he says. “And the other [changes have] to be done by state law. The state legislative session begins in January. We’re coming up to the point where these things are going to be put on the table and resolved.” 

Any reforms are likely to produce an equal number of winners and losers – because lawmakers have said property tax reform must be a “zero-sum” game, meaning it will not diminish the city’s annual income from property taxes, which fund nearly half of the city’s $92 billion budget. One homeowner’s tax cut will be another homeowner’s tax increase. 

Of particular interest to co-ops and condos are tax abatements and the means of assessing properties. Many critics say co-ops benefit from unfair abatements and tax-hike caps, while co-op advocates argue that the means of assessing their properties – based on nearby rental properties – leads to unfair tax bills. This much is certain: when the commission releases its proposals and the negotiating begins, it’s going to be a good old-fashioned New York alley fight.

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