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As Assessments Hit All-Time High, Tax Reformers Push Back

New York City

Property taxes, assessments, TENNY, co-ops and condos, lawsuit.
Jan. 27, 2025

Tax Equity Now New York (TENNY), a coalition fighting to reform the city's long-derided property tax system, has filed a new motion that could force the city to recalculate its just-released assessments for the upcoming 2025-26 fiscal year.

As reported earlier by Habitat, those assessments have reached record highs — rising by 2.38% for co-ops and 2.23% for condos. Assessed values, distinct from market values, are used in the calculation of each building's property tax bill. The city estimates that the market values of co-ops and condos will rise by 7.3% in the upcoming fiscal year, which begins July 1.

TENNY's original lawsuit, filed in 2017, argues that the current system violates the state's real property tax law and federal fair housing law by overtaxing rental properties compared to owned homes and by overtaxing communities where most residents are people of color. The Court of Appeals ruled in a 4-3 decision last year that both arguments could proceed.

But TENNY — a coalition that includes property owners, renters and civil rights groups — claims in its new motion that the city has disregarded this ruling, Crain's reports. If successful, the motion would make the city redo its latest round of property tax assessments, which officials released earlier this month, says Martha Stark, policy director for TENNY.

"Despite the city's expressed desire to make the city more affordable for hardworking homeowners and renters, they are ignoring their ability to do just that in the area where they have the most control: the property tax," Stark said in a statement.

TENNY is seeking a summary judgment against the city, given that officials must notify property owners by Feb. 20 if their assessment has increased and by how much. If the court does not issue a judgment before then, thousands of property owners will have to pay taxes based on improper assessments, TENNY argues.

The city violated the Court of Appeals ruling by overassessing homeowners in minority and low-valued neighborhoods, according to TENNY. Officials also used rent-stabilized buildings as value comparisons for luxury condos and co-ops, which causes heavier tax burdens for cheaper outer-borough residences and lighter ones for luxury Manhattan residences, the group claims.

New York's current property tax system dates back to 1981 and has been harshly criticized for years. Two persistent criticisms are that it assesses co-op and condos based on the value of comparable rental properties; and it places a cap on annual tax hikes, which favors rapidly appreciating properties over properties with flat or slow-rising values.

City Hall spokeswoman Liz Garcia slammed TENNY's position in a statement, saying it "would harm the very taxpayers they claim they are trying to protect — particularly working-class New Yorkers — and create negative fiscal impacts that would jeopardize the city's ability to provide crucial services."

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