After city report, disgruntled property owners hope for tax relief
“This is nothing less than blatant class warfare”
The release of a city-commissioned report on property taxes has spawned hope and outrage for homeowners throughout the borough — hope that the complicated tax system can be simplified and outrage that the taxes are so high in the first place.
The outrage is equally distributed between residential and commercial property owners, as the Eagle learned following the Jan. 30 release of a long awaited report from the New York City Advisory Commission on Property Tax Reform.
“Suffice it to say, I am among those southern Brooklyn small homeowners who have ample reason to complain,” homeowner Dennis Middlebrooks wrote in an email to the Eagle on Feb. 1. “When I inherited my three family home in Bensonhurst in 2008, my annual property taxes came to just $5,200. They have since increased to $11,200, well above the $10,000 limit for SALT deductions against federal income taxes. I can no longer deduct all of my annual property taxes and not one cent of my state and city income tax.”
SALT stands for State and Local Tax.
“While property taxes have more than doubled on small homeowners in Bensonhurst and other working class areas since 2008, they have been kept relatively stable in upscale, gentrified sections of Brooklyn as well as Manhattan,” Middlebrooks wrote. “Under our deranged property tax system, the people who are least able to afford property tax increases have been constantly slammed with increases and pay far higher property taxes than the people who could most afford it and who have been favored with property tax decreases.”
Mayor Bill de Blasio, for example, pays far less in property taxes for his two Park Slope homes, a combined $7,970, than homeowners in other neighborhoods.
“This is nothing less than blatant class warfare,” Middlebrooks added.
De Blasio did an interview with Brian Lehrer on WNYC on Jan. 31 in which the mayor acknowledged the unfairness of the system.
“So the recommendations that have been put out so far will lead to me paying more in property taxes, period. And I believe that’s fair,” de Blasio told Lehrer. “The fact is that in brownstone Brooklyn, there’s been an artificial dynamic in the way our property tax system is structured where, even as properties have increased in value greatly, the property taxes have not aligned to that reality. That’s just not right. So we have to make change. And I think the basic principles that this commission has put forward are the right ideas. So look, I’m comfortable with fair is fair and if it means I pay more in property tax, that’s okay. It’s fair.”
Owning a commercial property doesn’t protect a person from being gouged by the city, according to George Poulakakos, who owns a four-story, commercial-residential building on the corner of 86th Street and Third Avenue in Bay Ridge.
“The taxes were $16,500 when I bought the building 23 years ago. Last year, I paid over $70,000,” Poulakakos said in an interview Feb. 3.
His building, at 280 86th St., contains a restaurant on the first floor and 12 residential units on the second, third and fourth floors.
“The city doesn’t want the rents to go up, and I agree with that, but they keep raising the property taxes. They keep raising the water bill,” he said.
Poulakakos tries to compensate for the high taxes by saving money where he can. For example, he handles any plumbing issues that come up himself, rather than hiring a plumber.
His building recently made news when it was learned that the restaurant located on the first floor, Chobana Grill Café, at 8602 Third Ave., is up for sale. The real estate firm Gama Group NYC has listed Chobana for sale with an asking price of $160,000. The new owner purchasing the restaurant business would then assume responsibility for the lease and the monthly rent paid to the building owner.
“When you own a building, you have to be ready for anything, like people moving out,” Poulakakos said. “If you’re not ready, you will be hit with a downslide.”
The 72-page report issued by the New York City Advisory Commission on Property Tax Reform last week contained 10 recommendations on how to improve the system, including a proposal to put co-ops, condos and small apartment buildings with fewer than 10 units into the same Class 1 category as one, two and three-family homes.
New York has four classifications when it comes to property taxes; Class 1, one-, two- and three-family homes; Class 2, rental buildings, co-ops and condos; Class 3, utilities; and Class 4, commercial properties.
The commission also called for the creation of a “circuit breaker” that would lower the property tax burden on low-income primary residential owners.
The seven-member panel, led by Marc Shaw, interim COO of the City University of New York, was formed by the mayor and City Council Speaker Corey Johnson in 2018.
But beleaguered property owners should not expect relief any time soon.
The next step is a series of public hearings. Any major changes to the property tax system would require legislative approval.
The mayor told Brian Lehrer that the idea to form the commision grew out of town halls he has held around the city during his years at City Hall. Time and time again, he told Lehrer, New Yorkers raised the issue of property taxes.
“A lot of real deep concerns that it just wasn’t a consistent and fair system … we need a fairer, more transparent system and we need to not have it change our revenue dynamics substantially … So they came back with a framework, which I think is absolutely in the right direction,” de Blasio said in the WNYC interview.
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