N.Y. property levies are an unfair mess

Our city’s property tax system is broken. For decades, political leaders, independent analysts, community groups and homeowners have decried it as unfair and irrational, and acknowledged that it imposes bills on New Yorkers that bear little relationship to actual property values.

The system is also aggressively regressive, shifting the tax burden away from wealthier homeowners and onto the backs of lower-income property owners and tenants in working-class areas of the city. It imposes higher effective tax rates on rental buildings — in a city where more than twothirds of residents are renters.

These inequities have widened and now penalize homeowners in slower-appreciating, predominantly minority neighborhoods.

Snapshots of property tax bills for different properties in the five boroughs show how out of whack our current system is.

Single-family homeowners on Staten Island and in the Bronx pay taxes at a higher effective tax rate than homeowners in Park Slope, Brooklyn, condo owners in Tribeca, and co-op owners along Central Park West.

In fiscal year 2015, homes that sold for $775,000 had property tax bills ranging from just $1,500 annually to as much as $11,000. Another way to look at it: Properties that paid about $4,300 in taxes had sales prices ranging from as little as $500,000 to as much as $9 million.

The city and state laid the foundation of its current property tax system back in 1981. At the time, policymakers protected some single-family homeowners from an immediate tax spike and from rapid property tax increases.

Co-ops built before a certain date were protected, too, in that most of them were former rental properties and the law required that they continue to be valued as if they were rental buildings and not based on sales prices.

Much about the city has changed since then. The number of co-op and condo apartments has grown rapidly; they now almost equal the number of small homes. Meantime, the city has gotten safer and neighborhoods have gentrified.

And the city has increasingly relied on property taxes as a source of revenue; the portion of city revenues from property taxes has jumped from 20% in 2001 to 30% in the last fiscal year.

But the original choices that were made created inequities that have only gotten worse with time.

True reform requires a massive, coordinated and sustained effort from officials in both New York City and Albany to untangle the patchwork of policy decisions that have brought us to the irrational and unjust position in which we find ourselves today.

Yet while legislators and local and state officials all recognize that the system is broken, no one has been willing to tackle this problem. That is why Tax Equity Now New York, a coalition of homeowners, renters, rental property owners, and civil rights and social justice organizations, filed a lawsuit against New York City and State in April.

On several occasions during the recent mayoral campaign, Mayor de Blasio said that he would deal with property tax reform after he was reelected.

But he maintains that the courts are the wrong avenue to address the problem. Further, the city Law Department has been fighting the lawsuit at every step now for several months, seeking to have it dismissed and using motions to delay its moving forward.

That’s a bad approach. The right way forward is to acknowledge the problem that the lawsuit has exposed — while simultaneously demonstrating the courage to change our laws.

Band-Aids are not adequate anymore.

Let’s be very clear: We who have filed suit don’t want the courts to impose a solution on the voters, residents and taxpayers of New York. That is the job of the elected officials. Nor is the coalition of plaintiffs seeking financial remuneration from the lawsuit.

They are simply seeking to crystallize what the law requires, and ensure that New York City has a fair and rational property tax structure that does not shift the burden from the wealthy to the less affluent and to minority homeowners and renters.

The ultimate goal of the lawsuit is to end an unfair and arbitrary system. Rather than continuing to fight the lawsuit with motions and delay tactics, the mayor should welcome the effort.