DEATH AND TAXES—A cry of pain from George Capsis
Neither can be avoided but one can offer considerable and protracted pain. So when I received a very well written plea for help from a neighbor who was facing an impossible-to- pay jump in real estate taxes to almost $51,000, I sent an e-mail to Chief of Staff for Corey Johnson, Erik Bottcher. Erik surprised me by sending back a press release about the city forming a committee last September to look into the unfairness and bureaucratic ineptitude in assessing and collecting what is the second largest source of revenue for the city government (when the city needs money they just push the real estate tax button).
The closing down of one shop after another on Bleecker is not just the manifestation of yelping fang-bearing landlords but exploding real estate tax.
My tax when I bought my building was $11,000. It now is $48,000—which is half of the rent income before heating and repair costs. When I asked the tenants to volunteer a 3% increase in their rent they froze in disbelief.
Now the young City Council folks are casting about for ways to save rent regulations with the assumption that landlords are evil and maybe some of the big ones are but some of us little ones are not (justice is a glove that has to fit all hands).
By Stanley Wlodyka
Throughout the city, local businesses are closing up shop, leaving once bustling streets pockmarked with empty storefronts. Nowhere, however, has this trend been more pronounced than in the West Village. Last year, Nicki Perry balked when a retail space that had been a coffee shop for over 60 years was forced to close after the landlord upped the rent to $27,000 per month. “The eggs and toast went up to $15. How are all these older people supposed to eat their breakfast at $15 a go? A plate of eggs and toast and coffee—it’s ridiculous!” Within months, Perry made headlines when she took to raising funds online in order to save her own shop, the West Village institution Tea and Sympathy.
If the decline in local businesses in the West Village is a symptom of the “rapidly disappearing Village,” the next step in washing the famous cobblestone streets clean of their history is pricing Villagers out of their own homes. As the ultra-wealthy move into the neighborhood in droves, drawn by the cultural and historical significance of the neighborhood—though with nary a desire to continue or contribute to that legacy—prices for residential real estate skyrockets. Even if the temptation to sell is resisted, the choice might be taken out of a homeowner’s hands once the property tax bill rolls in.
A Charles Street resident, who wished to remain anonymous, confided, “The receipt of my latest Property Value notice made it clear that I will be driven out of the house I’ve lived in for nearly 50 years.” Retired, in her mid-70’s, she received an appraisal from the city in January that claimed her property had risen in value by 67% over the course of a year. She is now scrambling, desperately attempting to scrape together enough funds to pay a property tax bill of nearly $51,000.
“There are very few of us left who moved here in the mid-1960s and early ‘70s when there were mostly middle-class owners in multi-family houses, who worked hard to pay their mortgages and struggled to keep up with the taxes. Now, there are mostly single-family houses belonging to hedgefunders, NYU, a couple movie stars, and houses which are constantly being flipped,” she laments.
Property taxes account for nearly 45% of the revenue for New York City, with approximately $24 billion collected annually. This has caused a lot of friction amongst taxpayers, whose feathers are apt to get all the more ruffled when they hear what’s in store next year. City officials recently issued a press release revealing that their appraisers have estimated the collective valuation of all the real estate in New York has reached an all-time high of $1.323 trillion for fiscal year 2020, an increase of 5.8% (or $72 billion) over the previous year.
Aware of the public’s concern for the ever-rising tax burden, Mayor Bill de Blasio and City Council Speaker Corey Johnson announced in May of 2018 that a Property Tax Reform Commission would be formed in order to, “evaluate all aspects of the current property tax system in New York City and recommend reforms to make it fairer, simpler, and more transparent, while ensuring that there is no reduction in revenue used to fund City services.”
The commission conducted five hearings this past fall where they invited public testimony, as well as several “research hearings” whereby they solicited the opinions of experts in fields related to real estate. Any day now, the commission is expected to release a report detailing their findings with recommendations for changes they believe should be made to the property tax policy. Some of those changes can be done at the city level, while others may require approval from state legislators. Once the report is released, an additional five hearings will be held seeking public comment on the propositions set forth.
