Council Speaker Hopefuls Urge City to Reform Property Tax System
City Council speaker hopefuls are urging the de Blasio administration to support a lawsuit challenging the city’s property tax system. Council members Donovan Richards, Mark Levine, Corey Johnson, Ritchie Torres, and Jumaane Williams, all of whom, except Torres, have shown interest in running for Council speaker, have signed a letter saying it’s wrong for the city to oppose the lawsuit. The complaint, filed by Tax Equity Now New York, alleges that the state’s property tax laws unfairly impact poor and nonwhite homeowners, since homes in poorer neighborhoods are often charged the same as homes in wealthier areas. The law caps assessments on one-, two- and three-family homes at 6 percent per year.
According to the coalition, the inequities for homeowners are created by rules that cap increases to assessments at 6 percent per year and no more than 20 percent within five years. Because higher value properties rise in value faster, the caps suppress their assessed value while actual sales prices rise higher and higher. Lower value homes tend to stay flat in value, so the 6 percent assessment hikes often drive their assessed value above their actual sales value. As a result, the higher value neighborhoods have benefited from the cap more than the other areas of the city.
The disparity in taxes from neighborhood to neighborhood is also exacerbated because the system also places a disproportionate burden on rental buildings with more than 11 units, which the lawsuit alleges is passed on to tenants. While big apartment buildings account for 24 percent of market value in the city, they pay 37 percent of the taxes.