Real Estate Weekly
Image default
Deals & Dealmakers Featured

NYC property values fall but taxes go up

The City’s largest organization of landlords of rent-regulated apartments is calling on the city to freeze this year’s property tax assessments after the COVID pandemic wiped five percent off the value of its real estate.

The tentative assessment roll for FY22 shows the total market value of all New York City properties is $1.298 trillion, a 5.2 percent decrease from Fiscal Year 2021, according to the new Department of Finance assessment issued on Friday.

“By all accounts, 2020 was an extraordinary year with a global pandemic that disrupted virtually all aspects of society,” said incoming Department of Finance Commissioner Sherif Soliman in a news release.

SHERIF SOLIMAN

“New York City’s real estate market was not shielded from the pandemic’s effects on the City’s economy.”

With its newest assessment, the city figures the taxes it can collect from property owners will drop 3.9 percent to $260.3 billion for FY22.

But the numbers show that hundreds of property owners will still face a tax hike.

“As landlords’ struggles continue because of dwindling rent collections, the City is once again proposing increased property tax assessments for hundreds of building owners across the five boroughs,” said Joseph Strasburg, president of the Rent Stabilization Association, which represents 25,000 landlords.

“Since this pandemic began nearly one year ago, there has been no real relief for property owners. State and City elected officials have turned their backs on the City’s true affordable housing providers with endless eviction moratoria, a rent freeze, no mortgage relief, and increased property taxes.

“This is another slap in the face to the City’s property owners. If the Mayor truly wants to help all New Yorkers, he would put a freeze on all property assessments for the upcoming fiscal year.”

According to the Department of Finance, commercial properties led the decline in overall property values. Retail and hotel values dropped 21.1 percent and 22.4 percent, respectively, while office building values fell 15.6 percent.

However, the city’s new tax assessment roll shows the value of Class 1 properties, that’s one-to-three family homes, went up by 5.3 percent to $23.2 billion.

The overall market value of Class 2 (cooperatives, condominiums and rental apartment buildings)fell to $320 billion in FY22, decreasing by $27.6 billion, or eight percent.

But in Brooklyn, where values fell 5.2 percent, billable assessments have increased 3.2 percent.

The real estate industry generated more than half (53 percent) of the City’s total annual tax revenue in the last fiscal year, which is more than double the next closest contributor – personal income tax, which accounts for 21 percent of the City’s annual tax revenue.

Last March when the pandemic began to ravage the City, the State implemented an eviction moratorium.

Albany lawmakers recently enacted the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020, which protects all tenants – even those who have no financial hardship but aren’t paying their rent – from eviction until at least May 1, 2020.

Stabilized rents were also frozen for the third time under the de Blasio Administration, despite increased owner operating expenses.

Through all of this — and the pandemic — landlords have still been required to pay their property taxes, mortgages, water bills, and other building operating expenses.

“Residential and commercial tenants continue to reel from the negative financial impact of government-mandated lockdowns – and City officials are oblivious to the fact that this has had a domino effect on landlords,” said Strasburg.

JOE STRASBURG

“The Mayor has repeatedly made it loud and clear that property tax payments are needed to fill the City coffers as the budget deficit increases. But with no relief for landlords, he is destroying the same affordable housing stock he swore he would preserve

“Tenants should be joining us in calling on the Mayor to put a freeze on all property tax assessments for the upcoming fiscal year.”

(Visited 1 times, 3 visits today)

Related posts

Stone Street portfolio trade for $16M

REW

Out-of-towner buys $89M FiDi development site; plans 400-unit apartment tower

REW

New Rochelle development site hits market

REW