2012-08-31 / Top Stories

Homeowners Claim ‘Unfair Property Taxes’

By Alana Wilson

Homeowners in the west end complain that the city has raised property taxes even as home values fall. Homeowners in the west end complain that the city has raised property taxes even as home values fall. Amidst the recent slowdown in the fragile recovery of the U.S. economy, some Rockaway homeowners claim they are being subjected to increasingly unfair property tax rates.

One of those who believe they are being mistreated by the city is Jason Novetsky, of Beach 115 Street in Rockaway Park.

He told The Wave that he struggles to keep up with a property tax rate that is ever-increasing, despite the state of the economy and local real estate market.

The long-held belief that property taxes would fall in proportion to property taxes is apparently not operative in the city, he said.

Novetsky is a teacher and his wife a social worker.

The couple has recently rented out the second floor of their house to help with expenses, especially property taxes.

He says that his property taxes have doubled since he and his wife bought the home in 2005, at the same time the home’s market value, according to the city’s own numbers, has decreased significantly.

In 2012 alone, Novetsky’s home dropped in estimated market value by $27,000 from the previous tax year, to just below $400,000.

Novetsky claims that he and his wife are not the only homeowners experiencing trouble with property tax rates. He believes that a large portion of New York City homeowners are in a similar situation to his own.

“For many people, the market value of their property has gone down precipitously, while their property taxes keep going up,” he stated. “Property taxes are supposed to be tethered to property value, so it makes no sense at all. It sort of defies logic. Homes in one part of the city are being taxed more than properties of the same value in another part of the city. Homes worth more than $1 million are paying the same property taxes as I am.”

Novetsky says he has grown increasingly frustrated by the apparent lack of ex- actitude and fairness he and other homeowners are experiencing.

“It’s a system where the wealthy people stay wealthy. There’s a lack of consistency, and I’m not sure whether it’s a conspiracy or simply a matter of incompetence,” he said.

Scott Baker, a Manhattan-based author, community activist and president of the group Common Ground NYC, says this is a well-established and long running problem. “Assessments (of value) are notoriously lagging. It takes years for assessments to catch up to real values. It may have little to do with market value,” he said. The Common Ground NYC group advocates a citywide switch to Land Value Taxation, or LVT.

“The four classes are Byzantine, and nobody likes the system,” said Baker, referring to the four tax-classes dividing different types of commercial and residential properties. It’s been adjusted over the years, but nobody is happy with it. We’re trying to tax all the land equally, and more fairly, based upon its value, regardless of whether it’s built upon or not.”

In advocacy of the LVT system, Common Ground NYC cites a recent study by the office of Manhattan Borough President Scott Stringer, which tallied 1,723 vacant buildings and 505 vacant lots in Manhattan alone. The same study counted 22.2 square miles of vacant land city-wide. “The space we all need, for housing and commerce, is being hoarded by speculators,” states the Common Ground website. The group places blame squarely on the tax system. “We’re saying that instead of encouraging developers to build, we’re discouraging from hoarding,” says Baker. “Seventy percent of property owners would be paying less in taxes if we replaced building taxes with land taxes. Under that system, the landowner with undeveloped land plots is going to pay more.”

At a recent meeting on the proposed closure of the esplanade gap near the United Nations in East Midtown Manhattan, State Senator Liz Krueger commented that “all New York City issues are land-use issues,“ but also that people may be worried about overly-dense development if the LVT system were put in place. But Baker argues that this statement simply proves that LVT would be effective, and would benefit homeowners in the process. “It’s much better than having 22 square miles of unused vacant buildable land, as we have now, or even more underused land with mostly vacant 4-5 story tenements, like we have in so much of the city. There are many buildings with only a commercial tenant on the first floor and no residents at all on the top floors – the commercial tenant’s property taxes are enough to pay the meager tax bill for the whole property!”

Real estate agents are also well aware of homeowners’ contention with property tax rates. “Many people are complaining that their property taxes are not correspondent with the actual market value of their home. And many homeowners have contacted Councilman Ulrich on the issue,” said a realtor at Neponsit Realty.

Councilman Eric Ulrich was contacted for comment on this story, but is in Tampa this week for the Republican convention and was not available for comment.

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In addition to my quoted

In addition to my quoted comments in the article, I would like to add the following testimonial from Mayor Steven Reed of Harrisburg, PA (1981-2008), also echoed by his successor, Linda Thompson (2008-present): “In most places, millages, or tax rates, is the same for both land and for buildings and improvements. We find this frankly to be punitive on a broad scale and thus in the city of Harrisburg the land value tax has been in effect for quite some time. The tax rate on improvements – on buildings – is now only 1/6 of the tax rate that is charged on land. This land value tax policy first began as a one to two ratio, which … means that the tax rate on buildings was half the rate of the tax rate on land. But we determined, frankly, that that did not have the qualitative and necessary incentive effect that we were looking for from a land value taxation policy and so it was changed. It was changed to a 1 to 4 ratio and then to a 1 to 5 ratio and then years back we moved it to the present day 1 to 6 ratio. And I can tell you absolutely unequivocally that from this experience and record that we can affirm without hesitation that a land value tax policy can and does have a significant beneficial effect of inviting new and additional investment, throughout which, simultaneously, also means additional jobs, a larger tax base, and expanded economic activities overall. When the Council of Georgist Organizations sets forth the theory and the policy of land value taxation to many elected officials, they will sit there with their eyes glazed over because number one, they’re not experts on the subject of taxation at all, and secondly, they’ll think this is something that as a brainy nerd group you came up with to solve all the world’s problems, when in fact there are very practical applications of that which you have advocated for many, many, years. And I would point to Harrisburg Pennsylvania and a host of other locations where the land value tax has in fact been very practically applied, with, in all instances, and with no exceptions, it has produced measurable economic benefits which otherwise would not have occurred. The Land value tax achieves the following purposes: Number one: it serves to produce the highest and best use of land…. Cities have inelastic boundaries. Number two: Land value tax rewards rather than penalizes the greater and highest uses of land while the single tax rate policy does in fact the exact opposite. It penalizes. Number three: the land value tax discourages land speculation and allowing the land to sit vacant and unused. Number four: it dramatically encourages vertical development and high-rise development while discouraging horizontal development, that involves greater and lesser use of land – the sprawl that we’ve all experienced in most parts of our country. Number five: the land value tax reduces the need and the pressure to spread single projects across larger tracts of land and because of that the land value tax policy has made it easier to secure and preserve open space areas for parks, recreation, historic sites and other public purposes without those sites always being coveted for encroaching development purposes. In this reference to land sprawl, something more needs to be said, because the land value tax policy is so intertwined that sometimes people don’t get that – its relationship with whole issue of sprawl – in many parts of the United States and in particular here in Pennsylvania, Land use policy, if in fact any exist – and you’d be shocked how many places don’t have land use policies but to the extent that they exist they are almost existent and set forth at municipal level as opposed to a county and state wide level. … Let me use this region of Pennsylvania as an example of what happens in the absence of having land use policies … more land has been consumed by new development in the last 40 years then had been used in the preceding two hundred fifty years, yet during that same forty year period the population increase that has occurred here is nowhere, nowhere doesn’t even remotely come close to the pace of development. So what has happened is basically the shifting of the population and businesses from one part of the region to another, basically from cities and the older towns up to what at one point were largely undeveloped suburbs and urban areas. In America and here in Pennsylvania for sure this has created a classic urban-suburban dynamic that in most cases has meant the city has lost population, businesses and jobs while the outlying peripheral municipalities have received those businesses, population and jobs. … In Harrisburg we uniformly apply (the LVT) to all real estate parcels. The administration is uniquely simple. When the tax billings are issued, we sharply lower tax rates on improvements and buildings. It’s automatically applied to the value of those buildings. The taxpayers of those buildings have nothing to file, nothing to annually renew, (and) no special unit of government or staffing had to be created to maintain and operate the land value tax system. Let me tell you categorically that the administrative costs of having a Land Value Policy in Harrisburg, Pennsylvania is zero. So I believe it accurate to report that the land value tax policy has a beneficial macro-economic benefit and for that be more fully understood I offer the case of Harrisburg…but you will find great similarities in other communities all across America.” Quotes from Mayor Reed’s 8/2/12 closing speech on Land Value Taxation to the Council of Georgist Organizations – Harrisburg, PA, 8/2/12 Mayor Steven Reed (28 years, 1981 – 2008) of Harrisburg, PA. In addition to these local improvements, a Land Value Tax, applied nationally, would have the effect of eliminating "mortgage meltdowns" - by far the largest cause of market crashes and bank credit freezeups; 80% of bank loans are for mortgages, and half, or more of those are on the land portion of the property. With proper assessments, all other taxes save the Land Value Tax could be eliminated, rewarding work and productivity over hoarding and speculation. Please check our website for more information for NYC: http://commongroundnyc.org/

you should move befoe u

you should move befoe u though u out urich!!~

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