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Expert: City's tax policy may raise your rent

By David Freedlander, amNewYork Staff Writer
More stories | dfreedlander@am-ny.com

March 5, 2008

Rents are going to rise unless officials undo a new policy for taxing property owners, the city's top real estate assessor said Tuesday.

The new method, which began in January, shifts the bulk of the city's property tax burden onto affordable, multi-unit dwellings in the outer boroughs, according to David Moog, who is also president of the assessors union.

"Overall, the boroughs and the poorer areas got soaked while the more affluent areas were cut a break," Moog said.

He testified before the City Council yesterday that the taxes on buildings of 11 units or more in the Bronx went up over 50 percent, and in Queens by more than 40 percent.

Brooklyn and Manhattan above 96th Street saw a similar rise in values.

"Properties should be taxed equitably, and properties that are worth more should pay more," he said. "The No. 1 aspect of appraisals is location, location, location, and location is being ignored."

Martha Starke, the chairwoman of the Department of Finance, which administered the new rules, disputed the union's findings, claiming that assessed values went up only slightly in the Bronx and not at all in Queens.

Starke also testified that the new method, which focuses on rents a property owner receives and ignores the costs of maintaining a building, has simplified the process of paying property taxes, slimming a 40-page document down to one page.

"I don't know where they got those numbers," Starke said. "That's not what the data we have suggests at all. This is a much more straightforward way of evaluating properties."

Critics, though, say that by focusing solely on rents, the city is making it more difficult for owners of older building in more marginal areas, which typically have greater expenses and aren't worth as much as their counterparts in tonier areas of town.

Jack Freund, president of the Rent Stabilization Association, said he thought the new policy would derail the Bloomberg administration's stated aim of keeping housing affordable.

"If the city keeps trying to milk residential buildings, it's going to affect the cost of housing, which is what they don't want to do," he said.

And with the city mired in a foreclosure crisis, local pols said the need of property owners should becomes a priority.

"After 9/11, it was the property owners who bailed this city out," said Councilwoman Helen Sears (D- Jackson Heights), referring to the massive tax increase that was levied on them to help close large budget deficits. "We need to look at how we can ease their burden."