After Vowing to Fix Property Taxes, Mayor Eric Adams Is Fighting Against Reform

Everybody complains about the weather, as Mark Twain noted, but nobody ever does anything about it. Similarly, everybody in New York City complains about the byzantine and inequitable system of property taxation, but for the past four decades nobody has done anything about it.

Including the city's embattled mayor, Eric Adams, who is not only fighting for his political survival — and to remain out of prison — he's also fighting a lawsuit that seeks to deliver the property tax reform he promised to deliver when he was running for mayor.

Way back in 2021, when Adams was locked in a competitive Democratic primary, he said: “Billionaires are not paying their share of taxes, and this is an unfair system and we're going to fairly look at it. Within the first year, we're going to come up with a real resolution to finally resolve this issue.”

Three years after making that vow, as Bloomberg reports, Adams not only hasn't proposed any fixes, his administration is vigorously fighting a lawsuit aimed at correcting the imbalances he decried. That lawsuit, brought by a group called Tax Equity Now New York (TENNY) has been crawling through the courts since 2017 and may soon reach a resolution. TENNY, a coalition of homeowners, renters, rental-property owners and public interest groups, claims the system discriminates against minority residents. A lower court tossed the case in 2020 but it was reinstated in March by the state Court of Appeals. State law gives the city the power to remove disparate tax burdens and it’s “only a question of the City’s willingness to do so,” the court majority said.

The lawsuit points out numerous inequities in the current system: one- to three-family homes make up nearly half the market value of all properties in the city but pay less than 15% of the taxes; state law restricts how much a property's assessed value can grow each year, which limits how much tax can be collected from areas that have seen property values soar in recent years, such as brownstone Brooklyn. Over time, that has shifted more of the tax burden onto areas that have experienced more moderate growth, such as Staten Island and the Bronx. TENNY is arguing the city could address this disparity by adjusting the percentage of a property's market value that is subject to tax.

Under state law, co-ops and condos must be valued based on the value of comparable rental properties — not on their market value. TENNY claims the city uses "often nonsensical comparisons" that have allowed some $4,500 per square foot cooperatives to be valued as if they were rent-regulated apartments, an approach that ultimately forces rental properties to foot disproportionate tax bills.

“The city continues to say things like we need Albany,” says Martha Stark, policy director of TENNY who was city finance commissioner under Mayor Michael Bloomberg. “It's pretty clear that the court indicated that there are things that the city could do now to address some of the wildest inequities in the property tax.”

Brad Lander, the city comptroller who is running for Adams's job, says that improvements to the way the city compares condos and co-ops to rental buildings would go only so far. “There's no comparable rental to 220 Central Park South," Lander says. "It's just it's not meaningful to say, 'find a comparable rental for that building.'" The luxury tower has become a symbol of the city's tax disparities since hedge-fund billionaire Ken Griffin in 2019 bought a $238 million high-rise penthouse that has a lower effective tax rate than most outer-borough homes.

The solution, Lander believes, is for the city to take a plan to the state and get it approved. “It is entirely possible for City Hall to put a proposal forward before the end of the year and ask the legislature to take it seriously,” Lander says, adding he would “bring a proposal for comprehensive property tax reform to the state legislature in my first year.”

Sounds familiar, doesn't it?