NYAA Pitched 485x for Rent-Stabilized Buildings

Rent-stabilized landlords have a new pitch to New York lawmakers: Cut us a break on property taxes.

The New York Apartment Association, a landlord group formed by the merger of the Community Housing Improvement Program and the Rent Stabilization Association, wants some rent-stabilized buildings to get a property tax exemption for up to 40 years. Specifically, buildings where at least 50 percent of the units have rents at or below 80 percent of the area median income would be eligible for the same tax breaks as the 485x program, which are only available for new multifamily construction and some conversion projects.

Under the group’s proposal, the length of the tax break would be based on the number of income-restricted units.

The proposal represents a different approach by the landlord group. For years, CHIP has been pushing for a one-time rent reset in apartments that become vacant after a long tenancy. The New York Apartment Association was expected to pitch a bill this session that would allow owners of vacant rent-stabilized units to rent their units to Section 8 voucher holders and collect the full voucher amount. Instead, it is focusing on securing tax breaks for owners of stabilized properties.

NYAA indicated that it is still working on bill language for its proposal and does not yet have a sponsor.

The group points to a New York Appeals Court decision last year that revived Tax Equity Now New York’s lawsuit challenging the city’s property tax system. TENNY maintains that that decision compels the city to change how condos and co-ops are assessed, in recognition that multifamily properties shoulder a higher tax rate than they otherwise would.

“Right now, the government is forcing lower rents while simultaneously overtaxing the same buildings,” Jay Martin, senior vice president of NYAA, said in a statement. “They are trying to have their cake and eat it too. That’s got to stop.”

TENNY filed a motion asking a state court to force the city to make some adjustments to how property taxes are calculated.

“The legislature does not need to act here; the City has the power to act right now,” TENNY’s Martha Stark said in a statement. “That is why we need the court to rule on our motion for summary judgement; anything else is a distraction.”

As part of the state budget last year, lawmakers increased how much owners of stabilized apartments can raise rents if they renovate apartments. Owners said the changes did not go far enough to address rising costs and the level of disrepair of their buildings.

State lawmakers have not shown much interest in passing additional legislation aimed at providing relief to rent-stabilized owners. The governor’s executive budget did not include any legislation focused on these owners.