Court calls NYC ‘deeply segregated’ but dismisses lawsuit over unfair tax burdens

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A New York appeals court on Thursday dismissed a lawsuit saying that New York City’s property tax system discriminates against low-income and minority homeowners, even as it called the system unfair and acknowledged that the city is “deeply segregated.”

The Appellate Division in Manhattan said the group Tax Equity Now New York did not show how the system has perpetuated racial segregation in the city, which has 8.4 million people, by disproportionately burdening black and Hispanic residents while benefiting owners in wealthier areas with more white residents.

The 4-0 decision came four weeks after a commission set up by Mayor Bill de Blasio and the City Council recommended a broad property tax overhaul addressing some concerns in the 2017 lawsuit.

Jonathan Lippman, a lawyer for Tax Equity Now and former chief judge of the state Court of Appeals, said he was reviewing the decision.

New York City and New York State were among the defendants.

De Blasio has said the property tax system should be fairer, but “believes strongly that reform should be done legislatively, not through the courts,” his spokeswoman Laura Feyer said.

A lower court judge had in September 2018 allowed the lawsuit to proceed.

Tax Equity Now complained that a state law capping how fast property taxes could rise has left owners of homes whose values have risen even faster with disproportionately low tax bills.

They said this has fueled higher foreclosure rates in minority neighborhoods, made it harder for minorities there to move out and left many residents in the counties of the Bronx, Brooklyn, Queens and Staten Island overtaxed relative to residents in Manhattan.

But the appeals court said that while the system “does, in many respects, result in unfairness,” it did not deny minorities their constitutional right to equal protection, and it was up to legislators to fix the inequities.

“It is undisputed that New York City is a deeply segregated city. Segregation has shamefully divided our neighborhoods for a long time,” Justice Cynthia Kern wrote.

But the judge found no “causal connection” between the property tax system and segregation among neighborhoods.

She also said raising property taxes in majority-white neighborhoods would make them “less, not more, accessible to minority residents.”

The commission’s 10 recommendations included assessing homes at full market value, and eliminating the cap on growth in assessed values. (https://www1.nyc.gov/assets/propertytaxreform/downloads/pdf/NYC-AdvCommission-Prelim.pdf)

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