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The Quest for a Limit on Property Taxes

For years, many co-ops and condos and the organizations representing them have rallied around a common cry: “Taxes are unfair!” And they’ve had a point: for years, single-family homeowners have been the chosen ones, at least as far as the politicians go. While the assessed valuation — a key part of the financial equation that determines how much a building pays in property taxes — on co-op and condo taxes increased, those on single-family homes had a cap on how high they could go. That changed slightly over the years, when co-ops and condos with 11 units or less got their own cap: no more than 8 percent per year and no more than 30 percent over five years. It was still higher than the assessment for single-family homeowners; that cap is no more than 6 percent per year and no more than 25 percent over five years. But it was a start.

The quest for a limit on how high the city can hike property taxes for all condos and co-ops was first proposed four years ago, but now it’s coming back. Some of the people leading the charge to expand the cap are cautiously optimistic that all co-ops and condos are getting closer to seeing similar relief.

“The current administration is very focused on affordable housing,” says Bob Friedrich, co-president of the Presidents Co-op & Condo Council, a consortium that represents 65 co-op and condo buildings. “There is no greater example of affordable housing than [what you find] among the co-ops inQueens and Brooklyn, but right now the policies of the city are hurting these communities.”

The DOF Speaks?

Also now, for the first time, lawmakers and advocates are getting a feel for how the city coffers could be affected if the cap were extended. Because of his support on the issue, City Councilman Paul Vallone recently asked the city’sDepartment of Finance (DOF) for projected information on the impact. According to the councilman’s office, the department indicated to his office that revenues would rise in the first year after a cap, but they would fall $44 million by the fifth year.

(A spokesperson for the city’s DOF declined to comment on the information provided by Vallone’s office, and has not taken a position on the proposal to extend property tax caps to all co-ops and condos.)

Vallone says his office is awaiting a final analysis from the DOF and will consider this data and all the issues. He pointed to DOF tentative assessment roll projections for 2016, released in mid-January, that estimate a 6.6 percent hike in the total amount of assessed property value for all co-ops citywide and a 14.2 percent increase in assessed value for all condos. That boils down to an average tax hike of $448 for co-op dwellers, and an increase of $838 for condo owners. Single-family homeowners squeaked by with just a $228 hike.

To enact the cap, the change must be made at the state legislature, but lawmakers in Albany will only act with the city’s blessing. Bills with the cap were introduced but died in last year’s session. Sponsoring lawmakers say they will reintroduce them again.

 

See Full Article by Jennifer V. Hughes at Habitat Magazine