New York City is the largest, most diverse, and, in places, most inequitable real estate market in the country. The same can be said for its property tax code. The City has undertaken numerous reforms but the last time it seriously tackled the issue was 25 years ago under Mayor Dinkins. At the time the City’s commission concluded that the property tax structure was inherently unfair, and advantaged people with higher incomes over those with lower incomes. But Dinkins was unable to pass reforms before the end of his term, and his successor, Giuliani, shelved the commission’s recommendations.
Today the residential tax burden remains disproportionately shifted onto those less able to afford it. Luxury condominiums are valued more in line with modest rental apartments than high-end townhouses. As for those high-end townhouses, they likely have a substantially lower effective tax rate than similar homes in lower income neighborhoods. Large rental properties generally bear the highest residential tax burden, leading to added pressure on renters.
From City Hall to the State Capitol — not to mention a few courtrooms in between — political leaders, civic groups, landlords, and homeowners are once again pushing for reforms. To create a truly equitable property tax code, it helps to understand how the city got to the system it has, to both overcome the problems of the past and prevent more in the future.