What Maps are needed?

John Walkup

Talking Manhattan on UrbanDigs.com
Ooh love this stuff - the tax map on your site showing the disparity in tax rates between condos/coops and 1-3 family homes is great.
 

Fedex1

Member
Ooh love this stuff - the tax map on your site showing the disparity in tax rates between condos/coops and 1-3 family homes is great.
Yes it is amazing even with the co-op / condo abatement, co-ops and condos still pay more than three family homes.

Also the 421A exemption complicates matters.

Some condos have 100% exemption so they don't feel the property tax until 20 years pass. Then it suddenly jumps up.

The map is supposed to help people see the wild differences.

I don't think people in general care about averages. They want to know how their house is affected and why every property is treated as a special case.

The goal of the website and the maps is to make it easy for people to share and compare.

For example,

Multifamily home pays
$4,228.60 a year

Vs.

Nearby 1 unit condo pays
$9,661.72 a year and this is even with a 2K condo abatement!!!

Sharable links are below

lander bradford s | 256 13 STREET 11215 LANDER BRADFORD S 2020 The property tax rating is very low. | TidalForce https://nyc.tidalforce.org/search/lander_bradford_s

Vs.

3010981432 | 444 12 STREET 11215 LANCE, VIRGINIA 2021 The property tax rating is high. | TidalForce https://nyc.tidalforce.org/search/3010981432
 

David Goldsmith

All Powerful Moderator
Staff member
Back when the current Tax Classes were established, Coops/Condos lobbied to be in a separate Tax Class from 1-3 families and to be assessed as if they were comparable rental buildings. The current anomalies are a result of that.
 

Fedex1

Member
Thanks for the information.

I was told that there were very few condos back then.

I see here https://cooperator.com/article/the-cooperative-model/full that coops go back to 1883

The Gramercy, at 34 Gramercy Park, was built in 1883. The Queen Anne-style, 9-story red brick building is said to be the first co-op in New York City

I've spoken with one of the people involved with the 1970's and 1980's fight against full re-assessment see https://bowneparkcivic.com/category/articles/nyc/#post-1226

I believe the inflation rate was high in the 80's so a 4% or 6% growth may have seemed small at the time.

But now 6% is high yet the law remains unchanged. It has no adjustments for inflation.

See https://en.wikipedia.org/wiki/S7000A
 

David Goldsmith

All Powerful Moderator
Staff member
It has nothing to do with inflation, really. Real Estate Taxes are the only area NYC government can raise money without asking for permission and guaranteed. And it doesn't matter if assessments go up, down, or sideways. The City simply decides how much money it wishes to collect from each of the Tax Classes and then divides by the assessment rolls to come up with the tax rates. That's why even though the assessment caps are the most strict on Class I properties, actual taxes paid have still grown substantially. Look at the relative historic changes in tax rates since the 1980s. 1981 Class 1 - 8.950%; 2021 Class 1 - 21.045%. 1981 Class 2 - 8.950%; 2021 Class 2 - 12.267%. There's lots of smoke and mirrors in the RE Tax system. DeBlasio had a commission come up with recommended changes and then just punted it to a future administration. Everyone wants to change the system, as long as it results in their own taxes going down.
 

John Walkup

Talking Manhattan on UrbanDigs.com
Ah - so that's why you think even if the comparable rental amounts fall, the city will simply make up for it through the division of assessments....
 

David Goldsmith

All Powerful Moderator
Staff member
Yes. For any other taxes, the City/State/Federal set a rate and the amount collected varies based on spending/revenue/etc. But for property taxes in NYC the City decides how money they want and the tax rates float every year so they collect whatever they want.
 

David Goldsmith

All Powerful Moderator
Staff member
OMG he is so full of shit it's mind boggling. He's the one who has been throwing up roadblocks to reform. And as a lame duck he didn't have to worry about getting reelected. The problem is that every owner in the city wants "reform" but their definition of that is "my taxes go down and someone else's goes up."
 

Fedex1

Member
It has nothing to do with inflation, really. Real Estate Taxes are the only area NYC government can raise money without asking for permission and guaranteed. And it doesn't matter if assessments go up, down, or sideways. The City simply decides how much money it wishes to collect from each of the Tax Classes and then divides by the assessment rolls to come up with the tax rates. That's why even though the assessment caps are the most strict on Class I properties, actual taxes paid have still grown substantially. Look at the relative historic changes in tax rates since the 1980s. 1981 Class 1 - 8.950%; 2021 Class 1 - 21.045%. 1981 Class 2 - 8.950%; 2021 Class 2 - 12.267%. There's lots of smoke and mirrors in the RE Tax system. DeBlasio had a commission come up with recommended changes and then just punted it to a future administration. Everyone wants to change the system, as long as it results in their own taxes going down.
Hi David, Thanks for the information.



It is true that the city council does theoretically adjust the tax rates but they have been saying that the rate is frozen.



Listen to the NYC IBO director Mr. Sweeting describe the budget process:



For Class 1, the reason that property tax keeps going up at the limits (20% over 5 year/ 6% for any given year ) is that @NYC_Finance is claiming that almost everyone is under-assessed The assessment ratio = assessed value / market value is supposed to be 6% for Class 1 property but the assessed value growth is capped. The market value is whatever they say it is according to their "models" (fancy computer word for do not ask me how I came up with this number) (Although their market values are fairly accurate) So if the market value goes up 100% in 5 years and the assessed value can only go up 20% then there is a lot of "pending" assessment growth. Even if the market value goes down a bit the assessed value can go up.



Read this quote from
@NYCFinance
"How COVID-19 May Affect Your Property Taxes: Some property owners will find that their market value has decreased as a result of the COVID-19 pandemic. Assessed value increases are capped each year, protecting property owners when market values increase. When the market declines, assessed value can increase to catch up, but can be no greater than 6 percent of market value. Thus, it is possible that your taxes will increase even as your market value decreases." AMAZING BUT TRUE!


Also @NYCFinance can lower the class 1 property tax WITHOUT state law changes by lowering the assessment ratio. It has happened in the past.

New York City Department of Finance has lowered the assessment ratio in the past to comply with the law's uniformity requirement. After the State Legislature enacted the current system in response to Hellerstein, the Class One assessment ratio was about 25%. It was lowered to 18% in 1985, and then to 12% in 1989. In 1992, the ratio was lowered to 8%, and then in 2004 to the current 6% ratio.
Note from moderator: Please refrain from posting links to outside articles which you have authored or contributed to in order to back up your arguments without noting you are actually quoting yourself. Future infractions may result in having posting privileges limited.
 

David Goldsmith

All Powerful Moderator
Staff member

Fedex1

Member
Yes. It would be helpful to update the Wikipedia page to make it more accurate.

It's even confusing what Nassau county does. I think they use 100% assessment ratio now but I'm not sure.
 

David Goldsmith

All Powerful Moderator
Staff member
De Blasio to revive property tax reform

Blaming delay on pandemic, mayor commits to finishing plan​


Mayor Bill de Blasio said Thursday he will revive his stalled property tax reform effort before leaving City Hall.
At a state Senate hearing, de Blasio committed to restarting hearings on fixing the oft-derided system and producing recommendations before the end of his term, Gotham Gazette reported.

Only two days earlier de Blasio had repeated an excuse that the pandemic “derailed” property tax reform, which he has been identifying as a priority throughout his seven years in office.

“We’ve talked about it internally, we’ve got to restart this engine. We’re absolutely committed to a final report soon,” de Blasio said in response to a senator’s question at the hearing.
Whatever the city comes up with would have to be passed by the state legislature.

Martha Stark, policy director of Tax Equity Now New York, which sued the city in 2013 to force the city to make reforms, criticized the mayor ahead of his announcement at the budget hearing.

“Blaming his inaction on the pandemic shows the mayor’s lack of leadership, courage, and commitment to doing what he could to make NYC’s property tax less of a tale of two cities,” Stark told the paper. “He had six years to make the property tax system fairer for those who were also hardest hit by the pandemic: Black and brown people, the working class, small businesses, and renters.”

The state’s highest court dismissed the industry-backed group’s latest appeal in September 2020.
Since the 1990s the city has periodically moved to overhaul the property tax system, which TENNY and other groups argue favors single-family homes in well-off neighborhoods as well as co-ops and condos at the expense of homes in less-affluent areas and rentals.

In January 2020 the city released a preliminary report with recommendations. The report was widely criticized by the real estate industry for its tameness.
One reason it is so difficult to reform the property tax code is that any plan will raise someone’s property taxes, a prospect that few politicians relish. The system is also infamously opaque and complex, and the stakes are high: Property taxes provide a third of all the city’s revenue.

The city raised $30.7 billion in revenue this fiscal year from property taxes, although next year, with the pandemic lowering property values, that number is expected to dwindle to $29.4 billion.
 

David Goldsmith

All Powerful Moderator
Staff member

Where de Blasio went wrong on property tax reform​

Eight years after promising a fix, the mayor prepares to punt​


Deputy Mayor Vicki Been is known for policy expertise, not political savvy.
Case in point: When she was asked in September 2019 whether property taxes would be reformed during the de Blasio administration, she answered honestly.
“I don’t know that that’s realistic. I think the foundation can be laid,” Been said. “Laying the foundation now makes it a topic that has to be front and center in the next mayoral election, and I think that’s really important.”

Her boss, Mayor Bill de Blasio, did not appreciate that. Been had to quickly walk back the statement. “The de Blasio administration is working to reform property taxes before we leave office,” she wrote to Crain’s.
The city in 2018 had created a reform commission, initially co-chaired by Been. It has yet to make final recommendations for the city and state legislatures, through which property tax changes must go.

De Blasio was asked about this unmet goal during an unrelated state Senate hearing last week. He claimed the idea of reviving the reform effort had just been discussed internally and promised final recommendations soon. On Monday he told NY1, “We’re going to have the final report out in the next few months.”

As with everything he failed to get done in 2020, de Blasio blames Covid. The pandemic apparently prevented the property tax commission from gathering feedback on the 72-page report it issued in January 2020. Never mind that community boards, agencies, judges and the rest of the universe have been holding hearings via Zoom for the better part of a year.

New Yorkers would have appreciated some Been-like honesty from de Blasio about why this has not happened with property taxes. It would have been refreshing to hear, “We screwed up,” or, better yet, “Sorry, my approval rating is not high enough to increase anyone’s property taxes.”
With all the means of communication these days, the reform commission has lots of ways to hear from New Yorkers other than its archaic plan for public gatherings in each borough. Having people schlep to a school auditorium and line up behind a microphone won’t make the recommendations any better or people any less upset when their taxes go up.

Besides, the commission has already held public hearings in every borough, plus three hearings with invited experts and two other public meetings. That’s 10 meetings. Its preliminary recommendations were mostly sensible but not new. Zoom will suffice from here on out.
No one denies that fixing property taxes will be hard, but this is the year to do it. De Blasio cannot seek re-election and has nothing to lose. Most City Council members also cannot run again, so they vote purely for the city’s benefit, not their own. And it’s an odd-numbered year, so state legislators are not on the ballot either. The stars are aligned.

Adding to the urgency, Affordable New York, a program that eliminates or reduces property taxes on new apartments for up to 35 years in much of the city, expires next year. Developers must start planning now to break ground then on desperately needed housing. They need to know what the tax regime will be.
Affordable New York, like 421a before it, is a workaround that is supposed to encourage apartment development but increases the price of land, which obviously does not help affordability. We need a tax system that does not depend on temporary carve-outs to get new housing built.

Making property tax reform even more imperative, the system is unfair to minorities, whose financial disadvantages got even worse when Covid hit. Pound for pound, rental housing is taxed more heavily than single-family homes that sell for millions, tens of millions, and even hundreds of millions of dollars. Tax reform is a way to keep rents down.

Moreover, houses in white areas have lower property taxes relative to their value than houses in places like Brownsville and the South Bronx. This is because assessment increases are capped at 6 percent per year (and 20 percent over five years) while home values in gentrified enclaves have risen much faster. De Blasio’s two Park Slope houses are commonly cited as examples, but there are far more egregious ones.

The list of problems with the system goes on from there. Virtually no one understands how their taxes are calculated or the rationale behind them. For instance, a co-op or condo is taxed based on what “comparable” units rent for, even though they are not rentals.
I used quotes because often the “comparable” units are anything but. Tax assessors don’t actually visit the apartments. How could they possibly know what units are similar?

Market-rate apartments are sometimes compared to rent-stabilized units, which gets especially absurd when ritzy Park Avenue co-ops are assessed. And no one can explain to Mrs. Jones why the taxes on her humble house in Ocean Hill are much higher relative to its value than the taxes on Ken Griffin’s $238 million penthouse.

The eventual reform is supposed to be revenue-neutral, meaning that the increases on some properties will be entirely offset by the decreases on others. This is supposed to make things easier for the politicians — “We’re not raising taxes,” they can say. Perhaps, but it will also pit winners against losers. That provision could be rethought.

It has been eight years since de Blasio made fixing property taxes part of his campaign for mayor. Covid was a bad excuse for stalling in 2020 and no excuse for all the other years. Reform needs to get done now, before another mayor takes office and creates another commission to kick the can down the road yet again.
 

Fedex1

Member
Thanks for the information but there are solutions that @nycfinance controls such as the assessment ratio that do not involve state law changes.

See https://tony.brooklyncoop.org/get-involved/nyc-finance-can-lower-property-tax (Disclosure: I help with this website)

Can someone here tell us what happened when the assessment ratio for class 1 property went from 8% to 6% in 2004?

(Disclosure: I helped with the wikipedia page on S7000A - The bill that lead to the current property tax law and this is derived from TENNY lawsuit)

New York City Department of Finance has lowered the assessment ratio in the past to comply with the law's uniformity requirement. After the State Legislature enacted the current system in response to Hellerstein, the Class One assessment ratio was about 25%. It was lowered to 18% in 1985, and then to 12% in 1989. In 1992, the ratio was lowered to 8%, and then in 2004 to the current 6% ratio

See https://casetext.com/case/tax-equity-now-ny-llc-v-city-of-ny-3
 

David Goldsmith

All Powerful Moderator
Staff member
Since property values have increased so much and so many Class I properties are capped out does it matter on a practical basis? And while that ratio went down, tax rate went from 8.75% to 21.167%

Multiplication is commutative. What happened in 2004 is taxes went up.
 

Fedex1

Member
Since property values have increased so much and so many Class I properties are capped out does it matter on a practical basis? And while that ratio went down, tax rate went from 8.75% to 21.167%

Multiplication is commutative. What happened in 2004 is taxes went up.
Thanks but we also know that there are many properties that are far under the maximum assessment ratio in Park Slope (for example).

If the maximum assessment ratio is lowered to let's say 0.1%, then these Park Slope properties will go to full assessment.

If the class one tax rate goes to 100% or higher, then Park Slope will pay a higher percentage of the tax levy.

Also the class 1 tax rate affects all of class 1 properties and it's clearer in the news that taxes are going up.

The effect of the maximum assessment ratio is less clear to the general public.
 

David Goldsmith

All Powerful Moderator
Staff member

NYC has $1.3B in unpaid property taxes​

Tax revenue could fall by nearly 5% this year​

Landlords and homeowners are struggling to pay their property taxes.
Unpaid taxes rose to $1.3 billion this month, or about 4.5 percent of the $30 billion total due this year, according to a report by The City.

That’s a large figure compared to prior years. For the previous fiscal year, which ended in June 2020, the delinquency rate for unpaid property taxes was 1.8 percent. At the highest point after the 2008 recession, only 2.17 percent of property taxes due were left unpaid.

Comptroller Scott Stringer and Mayor Bill de Blasio’s administration expect that once late payments are factored in, the delinquency rate will shrink to about 3 percent for this year. But looking ahead to next year, both forecast property tax revenue falling by 4.5 percent — the first decline in 25 years — due to a combination of lower assessments and higher unpaid bills.

The arrears are split between commercial and residential property owners. Nearly 5 percent of the city’s apartment buildings, co-ops, condominiums and one- to three-family homes haven’t paid property taxes.

The Community Housing Improvement Program is calling on the state to speed up the distribution of the federal rent relief funds, while the Real Estate Board of New York is pushing lawmakers to drop the penalty for unpaid taxes from 18 percent to 3 percent.
De Blasio opposes reducing the penalty; a spokesperson told the City his administration is “exploring ways to help taxpayers and businesses recover.” Stringer, who is running for mayor, maintained his position that “we must cancel rent for the hundreds of thousands of New Yorkers who have fallen behind through no fault of their own.”

Stringer did not address where that leaves owners, though he’s previously advocated for spending $2.2 billion in aid that would go to renters and small landlords.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
so much to digest here, its mind numbing...on resi side, stimulate development and bring 421a back, over time (10+ years) it will gradually help the property tax base?...we need pro growth policies big time right now
 
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