PRESS INQUIRIES
New York City Council Committee on Finance
Recommendations of the New York City Advisory Commission on Property Tax Reform
Thank you, Chair Brannan and members of the committee for the opportunity to testify on the recommendations of the New York City Advisory Commission on Property Tax Reform (the Commission). The Partnership for New York City represents private sector employers of more than one million New Yorkers. We work together with government, labor, and the nonprofit sector to maintain the city’s position as the preeminent global center of commerce, innovation, and economic opportunity.
The Partnership applauds the Commission’s efforts to make recommendations that would increase transparency and fairness in the New York City property tax system. The current structure of the city’s property tax system contributes to the city’s housing affordability crisis. Substantial changes are needed to appropriately value properties, provide relief for renters and encourage improvements to the housing stock. The Commission’s recommendations are a good first step.
The Partnership supports the Commission’s recommendation to advocate for changes to state laws to create a new property tax class to include all small residential property owners and to value all properties in this class using data on sales of comparable properties. Current state law requires the value of cooperatives and condominiums be based on the income of comparable rental buildings. This method produces valuations that are far below the sales prices for these properties. The Commission’s recommendation would more accurately value coops and condos and ensure they are contributing fairly.
The Partnership supports providing relief for renters, particularly in rent-stabilized units, to ameliorate affordability challenges. Large rental properties have a much higher effective tax rate than smaller homes, making property taxes a high portion of their operating costs. This is especially true in rent-regulated housing, where real estate taxes are typically as much as 30% of total operating cost. In a city where more than two-thirds of city households are renters, property taxes are the most significant contributor to unaffordable rents. These issues are not addressed by the Commission’s recommendations likely to avoid large revenue losses that would result.
The Partnership also supports state law to provide abatements to owners to offset the costs of major capital improvements and apartment improvements that are necessary in older buildings and where rent increases are strictly regulated. This could expand the number of stabilized units available for rent by making it financially viable for landlords to make needed improvements when apartments are vacated.
The Partnership supports reform of property taxes and will work with the city and state legislatures to secure needed changes in the current tax code.