October 25, 2024
As Mark Twain pointed out, everyone complains about the weather, but no one does anything about it. Similarly, everyone in New York City complains about our Byzantine and unfair property tax system, but no one has done anything about it for the past 40 years.
Including embattled Mayor Eric Adams, who is fighting not only for his political survival and to stay out of prison, but also to deliver on the property tax reform he promised to deliver when he ran for mayor. He is also fighting a lawsuit demanding the same.
Back in 2021, during a close Democratic primary race, Adams said: “Billionaires don’t pay taxes. It’s an unfair system and we’re going to take a fair look at it. Within the first year, we’re going to find a way to finally solve this problem.” I’m going to come up with a solution.”
Three years after taking that oath, as Bloomberg reports, not only has Adams not proposed any amendments, but his administration has made no progress aimed at redressing the imbalances he denounced. We are vigorously fighting this lawsuit. The lawsuit, brought by a group called Tax Equity Now New York (TENNY), has been making its way through the courts since 2017 and could soon be resolved. TENNY, a coalition of homeowners, tenants, rental property owners and public interest groups, argues that the system discriminates against minority residents. A lower court dismissed the case in 2020, but a state appellate court remanded the case in March. State law gives cities the power to remove disproportionate tax burdens, and it is “solely a question of whether the city will do so,” the court majority said.
The lawsuit points out numerous inequities in the current system. One- to three-family homes account for nearly half of the market value of all real estate in the city, yet they pay less than 15 percent in taxes. State law limits how much property valuations can rise each year, and limits the amount of taxes that can be collected from areas where real estate values have soared in recent years, such as brownstone Brooklyn. Over time, much of the tax burden has shifted to areas that have experienced slower growth, such as Staten Island and the Bronx. TENNY argues that the city could address this disparity by adjusting the percentage of market value of properties that are subject to taxation.
Under state law, co-ops and condominiums must be valued based on the value of comparable rental properties, not market value. Tenney said the city made “often meaningless comparisons” that allowed it to value co-ops at about $4,500 per square foot as if they were rent-regulated apartments, and ultimately argue that it would impose a disproportionate tax burden on rental properties.
“The city keeps saying things like we need Albany,” said Martha Stark, policy director at Tenney, who served as city finance commissioner under Mayor Michael Bloomberg. “It is clear that the court has shown that there are things the city can do now to address the most egregious inequities in property taxes.”
City Auditor Brad Lander, who is running for Adams, said there are limits to how the city can improve how condos and co-ops are compared to rental buildings. “There’s no rent comparable to 220 Central Park South. It just doesn’t make sense to say, ‘Find a comparable rent for that building,'” Lander said. The luxury tower has become a symbol of the city’s tax disparity ever since it was hedged. Fund billionaire Ken Griffin bought a high-rise penthouse in 2019 for $238 million, with an effective tax rate lower than most suburban homes.
Lander believes the solution is for the city to submit a plan to the state for approval. “It’s entirely possible that City Hall will come up with a proposal by the end of the year and ask the Legislature to take it seriously,” Lander said. I intend to,” he added. 1st year. ”
Sounds familiar.
