A coalition of developers and civil rights activists is pushing hard for property tax changes in New York, but the obstacles are formidable.
New York City’s property tax formula allows many homes in Park Slope, Brooklyn, to be taxed less than lower-valued properties in other parts of the city. Photo: who?du!nelson on Unsplash
By J. David Goodman
Published Feb. 24, 2020
Updated Feb. 25, 2020, 11:19 a.m. ET
ALBANY, N.Y. — In a closed-door meeting in 2013, politically powerful developers told Bill de Blasio that they were planning a lawsuit challenging New York City’s property tax system.
The political system had done nothing to address their concerns for more than 20 years, they told Mr. de Blasio, who was about to be elected mayor. It was time to sue.
Mr. de Blasio agreed that the system was unfair, allowing million-dollar homes in Park Slope, Brooklyn, to be taxed less than far more modest properties near Kennedy Airport in Queens. He asked the developers to give him time to fix things, according to two people with direct knowledge of the October 2013 meeting.
Then, for years, nothing happened.
Frustrated, some of the same real estate moguls who had weighed legal action long before — including top-dollar political donors like Douglas Durst, Scott Rechler and Stephen Ross — decided to resurrect their plans to sue, hoping to lessen the high share of taxes borne by commercial and rental properties.
But, knowing many others also saw the system as unfair, they decided to try broadening their fight.
Calls went out to a former city finance commissioner and a veteran Albany lobbyist. They hired the law firm of Latham & Watkins, where the former chief judge of New York State, Jonathan Lippman, is of counsel. They recruited overtaxed homeowners from each borough.
“The whole idea was a big-tent approach, even odd bedfellows,” Mr. Lippman said. “Everybody hates the system.”
By the time their lawsuit was filed in 2017, they had formed a broad and unexpected coalition of plaintiffs that included city landlords, urban planners, budget hawks and even the N.A.A.C.P., which had for years complained of racial inequities in the property tax system.
“This is nothing new that just happened in the last two or three years,” said Hazel N. Dukes, president of the New York State chapter of the N.A.A.C.P. “But we weren’t getting any traction.”
A year after the lawsuit was entered, Mr. de Blasio and the City Council formed a commission that recently proposed the first real changes to the property tax system in nearly three decades.