Mayor Bill de Blasio. Image Credit: NYC Mayor’s Office.
Advisory commission will conduct comprehensive review of property tax system. On May 31, 2018, Mayor De Blasio announced the formation of an advisory commission to develop recommendations to reform the City’s property tax system. The reform aims to make the property tax system simpler, clearer, and fairer, as well as ensure that there is no reduction in revenue used to fund essential City services. The property tax system has not had an in-depth review by such commission since 1993.
Property taxes represent 45% of all city tax dollars collected and are set forth in state law. Properties are classified in multiple categories called tax classes that contain provisions that govern fractional assessments, market valuation restrictions, and caps on growth. Application of the various provisions of state law can result in differences in taxes paid on properties, which may become more pronounced with the passage of time.
The advisory commission will conduct a comprehensive review that will include a review of the tax classification system, the methods of determining property market values and assessments, the treatment of property value increases, the relief for low-income and senior homeowners, and the method of calculating tax rates. The advisory commission will also study property tax systems across the nation, including different methods for property valuation and homeowner protections. The advisory commission will seek input from the public by holding at least ten public hearings. Any recommendations from the advisory commission may include changes at the City level and state legislation.
The advisory commission will be co-chaired by Vicki Been, the Boxer Family Professor of Law at NYU School of Law, an Affiliated Professor of Public Policy of the NYU Wagner Graduate School and Faculty Director of NYU’s Furman Center for Real Estate and Urban Policy and former Commissioner of the Department of Housing Preservation and Development, and Marc V. Shaw, the Interim Chief Operating Officer for CUNY. Non-voting ex-officio members include the Commissioner of the Department of Finance Jacques Jiha, Director of the Office of Management and Budget Melanie Hartzog, Director of the City Council Finance Division Latonia McKinney, and Deputy Director and Chief Economist Council Finance Division Raymond Majewski. Other advisory members include Carol O’Cleireacain, Adjunct Professor at the Milano Graduate School for Management & Urban Policy at the New School, a Senior Consultant to the Brookings Institution’s Task Force on the State Budget Crisis, and Of Counsel to the LIATI Group, Felice Michetti, Chairperson and CEO of Grenadier Realty Corp., James Parrott, Director of Economic and Fiscal Policies at The Center for New York City Affairs at The New School, Gary Rodney, Chairman of City Real Estate Advisors, and Elizabeth Velez, President and Chief Contract Administrator of the Velez Organization.
Mayor de Blasio said, “To be the fairest big city, you need a fair tax system. For too long, New York City taxpayers have had to grapple with a property tax system that is too opaque, too complex, and just feels unfair. New Yorkers need property tax reform, and this advisory commission will put us on the road to achieve it.”
Council Speaker Corey Johnson said, “This is an important first step towards addressing inequities in this city’s broken property tax system. It is crucial that we work to bring clarity and fairness to this process, which has long perplexed the public and left many feeling hoodwinked by the city government tasked with representing them. The Council looks forward to rolling up our sleeves and addressing this long-standing problem.”
To learn more about property taxes, click here.
By: Dorichel Rodriguez (Dorichel is the CityLaw Fellow and New York Law School Graduate, Class of 2017.)
This is good news. The city property tax system is baroque, opaque and loathed by nearly everyone.
In its place should go something that is simpler and fairer.
For example, the city to shift property taxes to land and off of buildings.
This will produce better use of land and better – and more – buildings, as it has wherever such a shift has been applied.
The local chapter of Common Ground-NYC – of which I was president for 6 years – explains how this works in great detail on their website:
http://commongroundnyc.org/
Also, the notorious 429a tax abatement system needs to go. It provides a windfall for developers, allowing them to jack up prices on barely taxed properties, but not providing truly affordable housing. Much of the 25-30% affordable housing required to be provided is neither affordable, nor in areas where people want to live. Worse, the city is running out of areas to provide new housing at such low prices. Instead, property should be all taxed uniformly, which will drive down prices because people won’t pay twice – once for purchase and again in higher taxes. More, and smaller, apts. will be built and the middle and working classes will again get places to live. The luxury end is already glutted and losing value. What we need more of are middle and lower middle class housing.