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Op-ed | New York City’s broken property tax system

Jan. 8, 2024 By Martha Stark

For decades, it has been an open secret that New York City’s property tax system is inequitable and unfair. This regressive system, rooted in outdated and discriminatory policies, has not only exacerbated the housing crisis but also deepened the economic divide, disproportionately burdening lower-income and minority communities.

Next week, New York’s Court of Appeals will hear arguments on a case brought by Tax Equity Now New York (TENNY), a coalition of renters, owners, civic leaders, and public policy and social justice organizations, that challenges NYC’s broken property tax system.

TENNY’s lawsuit was born out of necessity. After decades of widespread acknowledgment of the system’s failings, political leaders at both the city and state levels have repeatedly failed to act.

NYC’s current property tax system is a failure on multiple fronts: it’s discriminatory and regressive and violates the principle of uniform assessment. As a matter of law, properties within each of the City’s four tax classes should be assessed at a uniform share of its value. In practice, however, homes in certain well-off neighborhoods in Brooklyn and Manhattan are artificially assessed and taxed at far lower rates than some neighborhoods within those boroughs and lower than neighborhoods in Staten Island, the Bronx, and Queens. The practice shifts the tax burden to those who can scarcely afford it.

This is not just an abstract injustice; it’s a tangible harm that affects thousands of New Yorkers, from small homeowners to tenants who bear the hidden cost in their monthly rent.

Beyond fiscal disparity, this broken system threatens the fabric of our city, making it increasingly difficult for working-class families, essential workers, and communities of color to afford housing. Property taxes––one of the most significant expenses for small homeowners––are driving away the very people who form the backbone of our city. If we continue on this path, we risk losing the economic and cultural diversity that defines New York City, turning it into a place where only the wealthy can reside.

The case TENNY brought is not just about numbers on a tax bill; it’s about the principles of fairness and equity, and the need to put fairness over political convenience. It’s a fight to ensure that NYC’s property tax system doesn’t penalize you based on where you live or the value of your neighborhood.

Our vision is clear: a property tax system that is equitable, transparent, and fair––one that can serve as a model for cities across the nation. We envision a system where taxes are based on actual market values, not convoluted formulas that stoke inequities. We seek an end to the arbitrary penalization of communities, ensuring that all neighborhoods are taxed fairly and justly.  It’s time to replace a broken system with one that reflects the values of our city.

Martha Stark is a tax policy expert and serves as the policy director of Tax Equity Now New York, a coalition that has sued New York State and City, claiming that the property tax structure violates the Constitution and various tax laws. The former commissioner of the New York City Department of Finance, she now serves as clinical professor of practice at NYU’s Robert F. Wagner Graduate School of Public Service. 

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