Real Estate, U.S.
New York City’s Property Taxes Are Crushing Homeowners
First American News LLC: Raleigh, NC: Homes are taxed as a function of their market value across much of the nation, but New York City’s process is more complicated and problematic than most.
‘Living Here is Getting More and More Difficult’
The 40-year-old state law that created the system was built to favor single-family homeowners over renters or commercial buildings. And it often hurts the owners of low- and moderate-income condos and co-ops, whose properties are compared to high-rise, luxury buildings.
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Hundreds of residents last year implored a special city commission to change the law, as spiraling home prices magnified inequities, forcing some longtime city dwellers into debt, and others to consider leaving. Eric Adams, the new mayor, has vowed to prioritize the issue.
Bloomberg Tax journalists obtained homeowners’ appeals through a public records request, and followed up with on-the-ground interviews. The New York City Department of Finance declined to comment on the individual taxpayers who submitted statements. Here are some of their stories:
‘I Don’t Want to Move’
Since 1890, Erik Frankel’s family has supplied boots and clothes to longshoremen working the city’s piers. In the 1950s, the Frankels sold their original clothing store to make way for the Brooklyn Queens Expressway, and moved their shop across the street in their Sunset Park neighborhood.
But that move included a hidden price tag that’s come due for the fourth-generation small business owner: The upstairs apartment Frankel shares with his son is a few feet smaller than his downstairs store. And the city seized upon that difference to classify the owner-occupied building as “commercial.” That means there’s no cap on how high Frankel’s property taxes can go, even in an economically depressed block of Brooklyn, which houses two porn shops and two churches.
“They didn’t want to hear what I had to say, or they weren’t there to help. It just seems like, ‘Just pay. You gotta pay,’” he says. “I thought they wanted small, family-owned businesses to stay in Brooklyn, but apparently they don’t.”
Frankel got a loan to cover his tax bill — and ran for city council. He lost, but is eyeing a bid for Congress.
“I love my community,” says Frankel. “We’ve been here 130 years. We want to stay here, but our tax burden is too great. I don’t want to move, but if they keep raising our taxes, we’re gonna have no choice.”
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Four New York City Property Tax Classes
Class 1
Most residential properties up to three units (usually small family homes or offices with one or two attached apartments) and most condos that are not more than three stories
Class 2
All other residential properties, including rental buildings, co-ops, and condos
Class 3
Utility properties
Class 4
All commercial and industrial properties like office, retail, and factories
