NYC property tax reform advocates call for DOJ intervention

After slow progress at state level, Tax Equity Now New York places hopes in Biden admin

New York /
May.May 25, 2021 08:00 AM
Principal Deputy Assistant Attorney General Pamela S. Karlan and New York Policy Director Martha E. Stark. (Getty, NYU, Tax Equity Now)

Principal Deputy Assistant Attorney General Pamela S. Karlan and New York Policy Director Martha E. Stark. (Getty, NYU, Tax Equity Now)

After more than a year of frustrated efforts in the state court system, Tax Equity Now New York’s latest attempt at property tax reform is an appeal to the federal government.

In a letter sent Thursday, the coalition implored the Department of Justice to challenge the city’s tax structure under the Fair Housing Act.

The plea comes eight months after the New York Court of Appeals tossed out a TENNY suit challenging the constitutionality of the city’s property tax laws, citing a lack of a “substantial constitutional question.”

At the time, a TENNY spokesperson vowed that the group would continue fighting in state court. But since then, reform has gained some renewed attention at the local level.

In February, Mayor Bill de Blasio pledged to revive his administration’s efforts to address property tax reform more than a year after releasing a series of recommendations as part of a preliminary report on the topic, blaming delays on the pandemic. Public hearings finally resumed this month.

In the letter sent Thursday, TENNY policy director Martha Stark asked the Justice Department to consider the discriminatory nature of the city’s property taxes, citing as precedent the “key role” played by the department in resolving “longstanding discrimination in Nassau County’s property tax system” two decades ago.

Communities of color, Stark argued, are taxed at higher rates than majority-white areas as a result of a “dizzying array of valuation methods, caps, adjustments, abatements, and other features.”

Will the Department of Justice answer the call? Stark is reluctant to predict the future.

“I’ve given up my betting life,” she told The Real Deal.

But a new White House administration could be of help.

President Joe Biden specifically addressed the topic in a January memorandum on discriminatory housing practices, calling out the “persistent undervaluation of properties owned by families of color” and committing to reexamine the Trump administration’s repeal of an Obama-era rule that compelled local municipalities to take steps to remove barriers to affordable housing.

There’s also precedent for the case, which Stark outlined in the letter. In 2000, the Justice Department challenged Nassau County’s property tax laws on the basis that higher rates in Black and Latino neighborhoods violated the Fair Housing Act.

Stark said she’d be satisfied with a similar outcome to the one in Nassau County — where the county agreed to abide by Justice’s recommendations — provided the federal agency outlined aspects of the city’s property tax law that conflict with the Fair Housing Act.

“We need judicial intervention to actually get these changes made,” Stark said. “The legislature has had ample opportunity to make them and they have not.”

After restarting public hearings with the city’s commission on property tax reform this month, the de Blasio administration intends to use the findings to issue a second report by the end of the year, coinciding with the end of his term.

But any changes to the law would need to go through the legislature, and it’s unlikely lawmakers would take up new proposals before a new mayor comes in, Stark said.

The hearings are also occurring in the final weeks before the city’s mayoral primary election, which Stark believes will steal a good bit of their limelight.

“But you know, they’re scheduled, and I do think the commission is interested in what the public has to say,” she added.

A virtual hearing for Staten Island was held on May 11. Brooklyn’s hearing is next, on Thursday, May 27.





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