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

10 Modest Proposals to Reform City Property Taxes

New York City

Property tax reform, tax abatements, Bill de Blasio, co-ops and condos.
Feb. 10, 2020

The 10 newly released and hotly debated proposals by the New York City Advisory Commission on Property Tax Reform are the latest in a long line of reform proposals. None got off the ground. For all you buffs of the history of failure, City & State has compiled this timeline:

1981: The state legislature divides property in New York City into four classes for tax purposes. Co-ops and condos with four or more units are placed in Class 2; co-ops and condos with fewer than four units are placed in Class 1. The class system, with its annual caps and other idiosyncracies, will become a major source of today’s tax inequities. 

1993: Mayor David Dinkins established the New York City Real Property Tax Reform Commission, which found that the property tax system was inherently unfair and benefited people with higher incomes. Dinkins, however, was unable to pass any reforms since the report came out two days before he handed over the mayorship to Rudy Giuliani. Many of the report’s central suggestions – uniform residential valuation, a revised class system, and relief for low-income residents – are still on the table today. 

1996: Mayor Giuliani and the city council endorsed the suggestion from the Real Property Tax Reform Commission’s report that would bring the tax status of co-ops and condominiums more in line with that of residential properties with one to three units. Two years later, a compromise providing a tax abatement to co-op and condo owners seeks to narrow the gap between the two classes. While it was supposed to be a two-year program, the abatement was repeatedly renewed and is still alive today. (One of the new commission’s 10 proposals is to replace the abatement with a “homestead exemption,” a hot-button issue for co-op and condo advocates.) 

April 8, 2014: During the press conference announcing his appointment, finance commissioner Jacques Jiha stressed his commitment to reforming property taxes. “It’s a major issue,” he said. “We have a lot of unfairness and inequity.” That was six years ago. 

Feb. 26, 2016: Two years later, City Council Speaker Melissa Mark-Viverito addressed the lack of progress with property tax reform, which she said was less of a priority than criminal-justice reform. 

April 24, 2017: Mayor Bill de Blasio, who had campaigned in 2014 on a promise to reform property taxes, downplayed a class-action lawsuit against the Department of Finance that claimed the property tax system is unconstitutional and racist, because it disproportionately affects low- and moderate-income neighborhoods. 

Nov. 6, 2017: Property tax reform gained more attention as de Blasio campaigned for re-election. “We will come up with a more consistent, more transparent, more fair system,” he said a day before his general election victory. “But I want to put a caveat on it. We can’t reduce our revenue substantially.” 

May 31, 2018: De Blasio and council speaker Corey Johnson announced the creation of a new advisory commission co-chaired by Vicki Been and Marc Shaw to recommend reforms. 

Jan. 30, 2020: Months behind schedule, the Advisory Commission on Property Tax Reform released its preliminary report. “The Commission’s recommendations are the most significant reforms proposed in 40 years and will bring a much needed level of fairness, transparency and simplicity to the entire system,” de Blasio said. 

Now comes the part that, for four decades, has proved impossible: getting the city council and state legislature to agree on reforms, then putting them on the governor’s desk. Stay tuned.

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