The dwindling momentum for NYC property tax reform is being exacerbated by the coronavirus crisis and adjacent economic disaster, according to a recent report in the Gotham Gazette. An advisory commission convened by the Mayor and the City Council to assess and reevaluate the city’s “confusing and unfair” property tax system released its long-awaited recommendations back in January, but the growing pandemic stalled the intended community conversations and legislative proposals to follow.
Initially formed as a next-ditch effort to address what many see as an antiquated, opaque, and inequitable jumble of assessments and levies that overburden lower-income communities and communities of color, the Advisory Commission on Tax Reform is now in a holding pattern while city and state officials grapple with issues of logistics, prioritization, and a virus-fueled financial crunch.
However, as the Gazette indicates, the communities hit hardest financially and health-wise by COVID-19 are also disproportionately taxed in the current system. According to the report, “Homeowners in some of the city’s most booming neighborhoods have among the lowest effective property tax rates, as do some of the most expensive co-ops and condos, while homeowners in places like the Bronx and Staten Island, which have not seen rapid gentrification, pay a much higher percent of their property’s value in real estate taxes. Tenants often serve as a release valve for the high taxes on large rental buildings.”
The January recommendations focused on inequities in the assessment of one- to three-family homes, small rental buildings, and cooperatives and condominiums, sparking a range of reactions around the real estate industry. The first of a series of public hearings was set to take place in Staten Island on March 12, but with the pandemic taking hold in New York and surrounding areas at that time, the session was cancelled.
And now, with the city's budget filed on July 1 and a $9 billion budget deficit looming, expedient reforms to the system that garners such a large percentage of city revenue—35% for the current fiscal year, according to recent estimates—are not likely. New York City “relies on property taxes to fund the essential city services like hospitals and our first responders,” says Laura Feyer, a spokesperson for Mayor de Blasio, pointing to the conundrum in addressing a burdensome property tax system during a pandemic.