On the eve of last year's mayoral election, frontrunner Eric Adams made a vow to fix the city's inequitable and unloved system of computing property taxes. (Stop me if you've heard this one before.) At the time, Adams said: “We must have a fairer system, and I believe it should be done immediately, It is my desire to get this resolved within the first year. Let’s put together a task force that sits down and comes up with real recommendations and solutions. It is unfair and has been unfair for far too long.”
The source of the unfairness, according to a new article in Bloomberg CityLab, was the city's noble desire in the 1980s to protect single-family homeowners — which led to a system that punishes renters, commercial buildings, and co-ops and condominiums. Under the unambiguous headline "New York City's Property Taxes Are Crushing Homeowners," the article notes that the current system often hurts the owners of low- and moderate-income condos and co-ops, whose properties are compared to high-rise, luxury buildings. Worse, their assessments are pegged to comparable rental properties, not their own market value, and they don't share in a prime benefit enjoyed by owners of fast-appreciating properties.
Hundreds of residents last year implored a special city commission to change the law — which Bill de Blasio promised but failed to do during this eight-year term as mayor.
Older single-, two-, and three-family homes in New York City are a protected class under a four-decade-old state law that governs how the city determines property values, with their assessments capped at a maximum 6% increase each year — another noble idea that had unintended negative consequences.
“In 1981, some bad choices were made,” says George Sweeting, acting director at the city’s nonpartisan, publicly funded Independent Budget Office, which advises city officials. “If they wanted to protect [single-family] homeowners, there were other ways of doing it. You could have created more exemptions. You could have created a low-income exemption, for example. The city doesn't have anything like that. You could have created a homestead exemption.”
The current cries for reform are not anything new to Sweeting. He also served on the 1987 New York City Tax Study Commission and the 1993 Real Property Tax Reform Commission. Speaking from long experience, he adds, “What the assessment caps have done is basically meant that the owners of buildings that were built before 1981, their taxes just have not kept up with their market value. And that's why you wind up with these very big disparities in the effective tax rate between those properties and in other parts of the city that are newer and or have a much slower appreciation.”
There are 11 months left in Mayor Eric Adams's first year in office. Proponents of tax reform are still waiting.
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.