NYC Small Property Owners Slammed By High, Onerous Tax Assessments
Operating Costs Far Outpace Rent Caps In Proposed ‘Good Cause’ Eviction
The New York City Department of Finance released initial property tax assessments this week, showing massive increases of the assessed value of multifamily buildings despite significant revenue loss experienced by housing providers since 2020. Even when tax rates remain steady, increasing the assessed value of a building raises the overall property tax burden for the building. This is why housing providers in New York City have seen tax payments increase year-over-year, despite the tax rate remaining fairly steady.
Assessment increases are particularly hard to absorb in rent-stabilized buildings, where rents cannot be proportionally increased to offset the added cost. Pre-pandemic data suggested that the average rent-stabilized building was spending roughly 30% of rent collection on property taxes. Surveys of CHIP members in 2020 found that that number grew to closer to 40% with many small building owners reporting that more than half of their rent income was going to property taxes.
If the State Legislature passes “Good Cause” Eviction, a form of court-controlled rent control, no property owner would be able to absorb these massive property tax increases, since the proposed legislation does not account for rising property taxes when setting a standard of “reasonable” rent increases.
Early indications suggest that overall property tax payments will increase due to massive assessment increases. A building in Brownsville, Brooklyn reported an assessment increase of more than 40%. Another building on Sheridan Ave. in the Bronx reported an increase of 40.6%. A building in Northern Manhattan reported a 25.9% increase. Dozens of other property owners report double-digit assessment hikes, which are historically rare and typically come with special circumstances to explain the increase.
“Raising property taxes does one of two things: It either raises rents, or it leads to less investment in a building. If city elected officials want safe, clean, affordable housing then they need to stop bleeding renters and their housing providers with outrageous property tax increases. And they definitely shouldn’t make this worse by passing ‘Good Cause’ Eviction.” said Jay Martin, Executive Director of the Community Housing Improvement Program (CHIP).
“Jacking up the property taxes for affordable apartment buildings in low-income neighborhoods is immoral. We need to be providing the people in these communities more help, not more costs that will lead to higher rents or worse housing. Mayor Eric Adams needs to clean up this mess that de Blasio left him,” said Ann Korchak, President of the Small Property Owners of New York (SPONY).
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