Affordable and Fair Property Tax Now!
New York City’s property tax system is notoriously opaque, confusing, and inequitable. For decades, calls for reform from homeowners, advocates, and elected officials have been ignored while New York State instead layered on a patchwork of complex exemptions and abatements.
The current property tax system significantly favors wealthy New York neighborhoods over working people: homeowners in Staten Island, Southeast Queens, Eastern Brooklyn, and the Northeast Bronx sometimes pay three times the effective tax rate of homeowners in Manhattan and brownstone Brooklyn.
It also favors condominiums and co-ops over multifamily rentals, taxing rentals at roughly double the median effective tax rate. These inequities disincentivize rental housing development, entrenching expensive and inefficient tax breaks like 421-a to facilitate housing production.
Now that 421-a has expired, New York City and State have an opportunity to reform our property tax system to finally achieve equity, protect homeowners, and create affordable housing programs targeted to real affordability with fair labor standards. Now is the time to achieve tax parity across new rentals and homeownership development, and between homeowners across the city. You can read more about those reforms in the New York City Property Tax Commission’s December 2021 Report, here: https://on.nyc.gov/3OaBV5Z.
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Comprehensive Property Tax Reform F.A.Q.
New York City’s property tax system is notoriously opaque, confusing, and inequitable. The current property tax system significantly favors wealthy neighborhoods over working class people: homeowners in Staten Island, Southeast Queens, Eastern Brooklyn, and the Northeast Bronx sometimes pay three times the effective tax rate of homeowners in Manhattan and brownstone Brooklyn.
It also taxes rentals at roughly double the effective tax rate of condos and coops. These inequities disincentivize rental housing development, entrenching expensive and inefficient tax breaks like 421-a that subsidize market-rate development at a time when affordable housing is urgently needed.
Rather than fix these problems, New York State has instead layered on a patchwork of complex exemptions and abatements that confuse homeowners and entrench inequities.
Right now, New York City and State have an opportunity to fundamentally reform our property tax system to finally achieve equity, protect homeowners, and create affordable housing programs targeted to real affordability with fair labor standards. The New York City Advisory Commission on Property Tax Reform laid out the principles of fair and affordable reform in a report issued in December 2021; now the state legislature must take up the task and move forward on legislation to get reforms done.
Property taxes account for approximately one third of New York City’s budget – this is the revenue that funds our schools, streets, and sanitation services. But property taxes are anything but fair. Homeowners in neighborhoods where home values have skyrocketed underpay relative to the value of their assets, while the other homeowners overpay to make up the difference. The tax disparity between rental and coops and condos has made it more expensive to build rental housing, leading to costly tax breaks for market-rate development, with too little real affordable housing that New Yorkers desperately need.
We propose reforms guided by the principles that any property tax system should be fair, simple, and transparent. Our recommendations include:
- Treating small residential properties equally, including 1-3 family homes, condos, coops, and 4-10 unit rental buildings.
- Creating targeted owner relief and deferral programs to prevent changes to property taxes from pushing seniors or other vulnerable New Yorkers out of their homes.
- Eliminating the tax disparity between new rental and homeownership multifamily buildings to facilitate rental development.
- Establishing a new targeted affordable housing tax incentive that matches the level of subsidy to the level of specific and genuine affordability the building will offer.
Depending on what kind of property you own now and what reforms ultimately are adopted, property tax reform could lower or raise your taxes. It is important that throughout the process of reform, policymakers hear from New Yorkers who are currently affected by our broken system, and who have a stake in making sure the reforms are fair and affordable.