After a year of taking a backseat to more immediate problems caused by COVID-19, property tax reform is back as one of the key issues facing New York City.
In order to approach this matter, the New York City Advisory Commission on Property Tax Reform, formed in 2018 by Mayor Bill De Blasio and City Council Speaker Corey Johnson, is hosting a series of virtual hearings seeking input from the public on potential reforms.
Hearings have already happened here in Brooklyn and in Staten Island, with the other three boroughs taking place in the coming weeks.
A preliminary report from the commission was released in January 2020 with recommendations to create a fairer system, but the pandemic slowed momentum. Using the input from these public hearings, De Blasio has promised a finalized report before he leaves office in December.
Property tax reform has long been a contentious issue in New York City.
The city does not assess taxes at properties’ full market value, instead opting for a complicated system dating back to World War II that separates properties into four classes, each being assessed at different rates of the estimated market value. In practice, the system has taxed wealthy homeowners, and condo or co-op owners at vastly lower rates than middle class homeowners. The system has also shown to tax communities of color at higher rates.
“The current system is not fair,” the Commission’s preliminary report, which lists ten initial recommendations to confront this issue, says.
Among these recommendations is to merge co-ops, condominiums, rental buildings with up to ten units, and 1-3 family homes into one “residential” property class. It also recommends using a sales based methodology to value these residential properties, and to assess them at their full market value. This reform would, in theory, put all residential properties on the same playing field.
Any reforms would require working with the state government as well as the city council and, due to the upcoming term limitation for De Blasio, the onus will likely fall on the next Mayoral administration.
For some critics, this is a good thing.
“Bill de Blasio has not been effective in leveraging the powers and pulpit of the mayoralty against the powers that be in Albany,” City Councilmembers Justin Brannon of South Brooklyn and Joe Borelli of Staten Island wrote in a recent Op-Ed.
“New Yorkers of all stripes – homeowners, tenants, renters and small landlords – should join us in demanding each [mayoral] candidate commit to supporting the tax commission’s recommendations.”
Still, these reforms will likely be a tough sell to many homeowners whose property taxes would go up should the recommendations of the commission come to fruition.
Though the Brooklyn public hearing has passed, anyone concerned about the current property tax system and any future reforms can still listen in to hearings for Queens, the Bronx and Manhattan.
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