Published: Spring 2014
There has been growing recognition
that New York City's property
tax system, that dates from
1981, is now badly skewed, difficult to
maintain, and patently unfair in many
ways. Mayor DeBlasio, City Council
Speaker Mark-Viverito and many
citizens groups including CNYC have
called for tax reform.
Reform can't be tinkering or making
small changes to one class or another.
The courage must be found to restructure
the entire system, with fairness
and transparency as twin goals. Taxes
should be levied equally on properties
of like function and like value. Consideration
for seniors, for veterans, for persons
with disabilities -- and for home
ownership, if that is recognized as a desired
end to promote--all must take the
form of separate overlays, administered
by City government.
CNYC and the Action Committee for
Reasonable Real Estate Taxes seek to be
active participants in the reform process.
We dare to hope that by the time the present
abatement program sunsets on June
30, 2015, a fair and equitable program of
taxation shall have been created, vetted
by interested parties, and prepared for introduction
in the State legislature.
HOW DID IT BEGIN?
The New York State legislature passed
S-7000-A over the governor's veto in
1981, establishing four property tax
classes in New York City. It was cobbled
together to solve problems raised by a
lawsuit that successfully challenged the
prior tax structure. By 1990 it had already
created more problems than it had solved.
Assessments were increasing at a gallop
for multiple dwellings, utility properties
and commercial property while one, two
and three family homes were sheltered
from increases by assessment caps, and
by a system that took advantage of additional
opportunities, not to maintain each
group's 'share of the pie', but rather to
skew the system even more in favor of individual
home owners. Cooperatives and
condominiums were included in the Multiple
Dwelling class. Their number had
grown exponentially during the 1980s.
CNYC had been established in the
early 1970s by newly converted buildings
eager to share experiences so as not to
continually 'reinvent the wheel'; CNYC,
too had grown significantly by 1990, and
its members were staggering under their
ever-increasing property taxes.
ACTION COMMITTEE SUGGESTION
In February of 1990, CNYC called into
being the Action Committee for Reasonable
Real Estate Taxes. Its chairman and
officers studied the tax structure and proposed
a simple solution, two tax classes,
one residential and one commercial, with
a fixed ratio between the two, so that neither
sector would be overtaxed to benefit
the other. "Circuit breakers" such as
homeowner exemptions and government
provided relief for senior citizens, etc.
were also considered.
'TEMPORARY' ABATEMENT PROGRAM
Mayor Dinkins convened a blue ribbon
commission in 1993 to examine
the property tax system. Its report confirmed
that housing cooperatives and
condominiums pay far higher property
taxes than other homes of comparable
value. In 1996, Mayor Giuliani called for
an abatement program for home owners
in cooperatives and condominiums as a
first step toward tax fairness. This was to
be a two years program while the city developed
a long term plan for tax equity.
Instead, the abatement was repeatedly
renewed in 1999, 2001, 2004 and 2008.
As it was due to sunset in 2012, legislation
was introduced for yet another four
Instead, just days before the end of
the legislative session, the City put forth
a complex bill that modified the abatement
program in several ways and also
addressed J-51, Subchapter S Corporations
and the 421A program. Lawmakers
didn't have sufficient time to study this
proposal before the end of the legislative
session, so the abatement program
remained in limbo. The Department of
Finance continued to apply abatements
to Fiscal 2013 property taxes following
the format of previous years.
MANY MODIFICATIONS BRING
Finally, in January of 2013, a new state
legislature passed the City's legislation. It
significantly increased abatement percentages
for buildings whose assessed
value averaged $60,000 per unit or less.
This has resulted for affordable units citywide
and for most of the cooperatives
and condominiums outside of Manhattan
in significantly higher abatements – a
most welcome development.
PRIMARY RESIDENCY ISSUE
However, the new legislation also restricted
the abatement to an individual's
primary residences (plus up to two additional
units in the same cooperative or
condominium as the primary residence),
phasing out abatements on other units
over the fiscal years 2013 and 2014.
The Department of Finance had the
task of implementing the changes in the
abatement program. It worked diligently
over many months to try to confirm all
primary residences, but still some owners
have lost abatements to which they
The concept of providing a benefit
only for owners who live in their units
is a frequent practice in other jurisdictions,
where it is termed a homeowner
exemption. But no such criterion affects
taxes on Class One properties with absentee
owners, making home owners in
cooperatives and condominiums even
less like home owners in Class One.
TAX REFORM IS NEEDED
It is heartening to see the Commissioner
of Finance, the Mayor and the
City Council all speak of examining our
property tax system. This effort should
focus on developing an easily understood
tax structure that will deal equitably
with all New York City tax payers.
CNYC will keep members posted of
progress toward this vital goal.