Amid speculation that passage of a property tax cap covering most of New York State will hinge on the fate of New York City’s rent regulations, Mayor Michael Bloomberg has shot down a proposal to cap taxes on some city apartment buildings.  He claimed, among other things, that the city’s property taxes are “low compared to the rest of the state.”  But this is true only of owner-occupied single- and two-family homes. The city’s taxes on apartments are actually quite high by any standard.

First, some background. As reported recently in the New York Post:

Developers are warning that as many as 10,000 “affordable” apartments in the 421-a tax-abatement program might be lost over the next few years because owners can’t afford to pay property taxes that, in some cases, have reached a third or more of their gross income.

The Real Estate Board of New York, which represents the city’s largest developers, has asked the administration to consider a tax cap of 20 percent.

Bloomberg’s response, again from the Post:

“Our property taxes in New York City happen to be very low compared to the rest of the state,” said the mayor.

He rejected threats that landlords will turn thousands of “affordable” apartments into market-rate units if their tax breaks are not extended.

But the bottom line is we have a deficit and I think it’s hard to see how you could provide the services if we had to lower taxes,” Bloomberg said.

The reality:

New York City’s property taxes on owner-occupied single- and two-family homes are low — only because the city’s arcane property classification system is designed to shift most of the burden to multi-family rental housing, along with commercial, industrial and utility properties.  Consider this sample of tax burdens on apartment buildings in some of America’s largest cities:

screen-shot-2011-05-02-at-124142-pm1-3365943

Note: New York City’s property tax burden on apartments is more than double the national average.  It is fully three times the tax burden in Los Angeles, and nearly three times the property tax in Chicago.  Among America’s largest cities, only (sick, dying) Detroit imposes a higher property tax on apartments.

As for comparisons within New York State, the same survey estimates that New York City’s tax burden on apartment buildings is essentially equal to Buffalo’s, and about 12 percent higher than the property taxes in a sample rural area of western New York.

Governor Cuomo’s proposed 2 percent cap on property tax levy increases would not apply to New York City, or to school districts within the state’s other top 5 cities–Buffalo, Rochester, Syracuse and Yonkers.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

You may also like

Minimum wage madness

Mayor Michael Bloomberg has joined Assembly Speaker Sheldon Silver in advocating an increase in the state minimum wage. Unlike Silver, Bloomberg in his State of the City message was at least willing to acknowledge that the minimum wage discourages hiring–specifically, that it “can reduce youth employment.” His solution? Read More

Cuomo, Bloomberg share plug-in fantasy

Mayor Michael Bloomberg’s plan to wire one-fifth of new parking spaces in New York City for electric vehicles would “force the private sector to build charging stations for a fleet of cars that don’t exist and probably won’t exist for years to come, if ever,” energy analyst Robert Bryce of the Manhattan Institute writes in today’s New York Post. Read More

CBC: “unchecked growth … to dominate [NYC] budget”

The Citizens Budget Commission has offered its take on New York City's budget for fiscal year 2012, which started last Friday. Read More

“the cost of the average city worker is way too high”

An in today's New York Daily News shows that what used to be considered a morally heartless and politically unworkable idea -- cutting public-sector salaries and benefits to a manageable level -- is now becoming mainstream thinking. Read More

Paterson’s (apparently) bad union deal

Governor Paterson is reportedly close to striking a deal with state employee labor unions under which the governor will drop his plan to layoff off over 7,000 state workers in exchange for the unions' acquiescence to (a) a $20 Read More

Digging the budget hole deeper in NYC

City Council Speaker Christine Quinn and the chairman of the Municipal Labor Committee, an umbrella group of labor unions, have the idea of tapping a union-controlled health care slush fund to prevent 4,100 scheduled scheduled teacher layoffs and 20 fireh Read More

Bloomberg on bargaining

In today's Times, Mayor Bloomberg says that state governments don't need to curtail bargaining rights for public workers' unions. Instead, states just need to bargain better -- and give localities the authority to bargain better, too -- to protect the... Read More

How not to fix pensions

The Post has a good editorial today on Mayor Bloomberg's plan to cut pension costs by taking away a "bonus" check from uniformed workers who have already retired: [W]hile the mayor has standing to ask for relief, the notion is fanciful... Read More