The most recent effort to reform New York City’s property tax system comes from the NYC Comptroller, who presented a comprehensive property tax reform framework before the City Counsel at a mid-November hearing: https://lnkd.in/e_7y9wqj
The reforms include proposals to incentivize new rental housing production by reducing base tax rates by 30%, aligning tax breaks with the cost of affordability of buildings, and replacing the expired “421-a” program with a new version of the state’s vaunted “Michell-Lama” program that would create permanently affordable, cooperative homeownership.
The impetus for the City Council’s hearing on property tax is the expiration of the controversial “421-a” incentive program, and a December 2021 study released by the NYC Advisory Commission on Property Tax Reform calling for sweeping reforms to fix the City’s property tax system to make it less opaque and more understandable for taxpayers.
That study argued small residential property owners – specifically one-to-three family Class 1 homes, Class 2 condos and coops, and small rentals (up to 10 units) – should be aggregated in the same tax class and uniformly valued at sales-based market value. It also recommended that tax class rates should be fixed for five-year periods, among other changes to simplify the system.
The Comptroller’s report on how to plug the hole caused by the expiration of the 421-a program for rentals is a small step in “a” direction buried under a new layer of political patches. Only guarantee – until a viable solution is put into practice, the ability to develop rental units in NYC will be severely hampered.
The City Comptroller’s reform framework can be found here: https://lnkd.in/e6guXPw2