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9/7/2017 Tax Equity Now NY | NYC Class Action Property Tax Lawsuit

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Coalition plans to bring class-action suit challenging citys property tax system
Advocates blame 6% assessment cap for inequities in minority neighborhoods

April 24, 2017 09:40AM

Mayor Bill de Blasio (credit: Getty Images) and Judge Jonathan Lippman

A coalition of tax-reform advocates including the NAACP and former New York State Court of Appeals Chief Judge
Jonathan Lippman is gearing up to bring a class-action lawsuit claiming the citys property tax system is racially biased
and tipped in favor of auent homeowners at the expense of working- and middle class New Yorkers.
Tax Equity Now NYs lawsuit is based on data compiled by former Bloomberg administration Department of Finance
Commissioner Martha Stark, the New York Daily News reported.
State law requires the city to base property assessments on sales of comparable properties. But the coalitions data show
homeowners in predominantly minority neighborhoods are over-assessed by $1.7 billion. They pay $376 million or an
average of $844 per homeowner more than they would if their properties had been accurately appraised based on
comparative sales.
This is an insidious sort of economic oppression that doesnt seem sexy, that doesnt seem to pop up, said Bertha Lewis,
president of the Black Institute, which is part of the coalition. The more we looked into this, its just outrageous these
inequities from neighborhood to neighborhood, community to community being taxed at different rates.
The inequity stems from state rules that put a 6 percent annual cap on increases to assessments that can climb no higher
than 20 percent within ve years, according to Patrick OConnor, the former head of the Department of Finance property
division in the 1990s who now runs Texas-based OConnor Consulting.
Because more expensive properties climb in value faster, they hit the cap when actual sales prices rise. But less expensive
home values tend to stay at, so the 6 percent hike often drives their value above actual sales value, OConnor said.
The higher value areas were going up faster until the caps. The higher value neighborhoods have beneted from the cap
more than the other areas of the city, he said. Thats what the problem is.

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9/7/2017 Tax Equity Now NY | NYC Class Action Property Tax Lawsuit

Mayor Bill de Blasio last week promised to tackle the inequities in the property tax system, but only if he is re-elected
later this year.
Its because it is something that is going to take so much effort and so much of the administrations time and energy that
its just not a thing were going to do now, he said. [NYDN] Rich Bockmann

Tags: property taxes, Real Estate and Politics, Real Estate Finance

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