NYC treats real estate taxes as “golden goose for revenue,” city officials, real estate execs say

TRD New York /
Sep.September 19, 2012 11:30 AM

While the city has not raised real estate taxes in more than a decade, a convoluted appraisal process has allowed the city to effectively raise taxes — and city officials have gone to great lengths to ensure that the revenue stream from real estate taxes stays steady, the New York Observer reported.

The fact that property taxes never waned, even in depths of the recession, is evidence that “the city has come to treat real estate as a golden goose for revenue,” analysts told the Observer. “We had four years of falling prices, but real estate tax collections never fell,” said Robert Knakal, a chairman at Massey Knakal Realty Services. “How does that even work?”

A few years ago the city’s Department of Finance lowered valuations for some residential buildings, after noticing an irregularity, a source told the Observer. To even the playing field, the department decided to decrease its assessments across the board for the type of property in question.

Immediately after that decision, the concerned officials were called to Mayor Michael Bloomberg’s house and told, essentially, not to mess with the revenue stream, the source explained.

Others say the city is doing the best it can. “It’s a common-sense question: how is it possible from 2007 to now …  for building values not to have gone down?” said Allan Schwartz, a real estate tax attorney. “It’s because buildings’ incomes haven’t necessary suffered. And the city is using that income to calculate the values.” [NYO] — Guelda Voien

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