Public Employee Press

Union blasts new assessment system

Effect of new assessments
	Manhattan: 75% 30 W. 70 Street 31 apartments, built 1916 Assessed full-market value ’07-’08: $16.1 million ’08-’09: $ 4.1 million Decrease: 75%	The Bronx: 107% 1818 Clay Avenue 24 apartments, built 1937 Assessed full-market value ’07-’08: $1.2 million ’08-’09: $2.5 million Increase: 107%

Local 1757 says the new method favors the wealthy and cheats the outer boroughs

By GREGORY N. HEIRES

A new way of assessing rental properties is shifting the tax burden from wealthy parts of Manhattan to poorer areas and the outer boroughs.

The misguided methodology stands to cost the city $100 million a year in property taxes, said David Moog, president of Assessors, Appraisers and Housing Development Specialists Local 1757.

“Unfortunately, this change has been introduced just as the city is grappling with an economic slowdown,” said Moog, who blasted the unfair new system in the press and at a City Council budget hearing. “This new method is depriving the city of funds it needs for basic government services like education, law enforcement and fire protection,” he said.

The new, simpler “gross income multiplier” formula for assessing rental properties is based on gross income and sales price of a building, but it ignores operating expenses, the age and condition of the building, type of building (walk-up or elevator) and the value of other property in the neighborhood.

Cost to city: $100 million
The older method, used by municipalities nationwide, takes into account gross income, operating expenses and expected property value increases. The New York State Supreme Court has ruled numerous times that this “income capitalization” method is the most accurate way to evaluate property.

Earlier this year, the Independent Budget Office estimated that the city would have lost $100 million in tax revenue last year if it had used the new method, which has never been widely tested. “There can be a price for this simplicity,” the report said.

Addressing the City Council Finance Committee March 4, Moog charged that Commissioner Martha Stark came up with the new method “in secret” without any policy discussion at the Dept. of Finance.

As a result of the change, the “tax burden has been unfairly shifted from the affluent areas of Manhattan to areas north of 96th Street and to the outer boroughs,” Moog told the committee. With the new method, the average market value figure used to calculate the assessed value of rental buildings with more than 10 units increased by 17 percent below 96th Street in Manhattan. But the increase was 35 percent north of 96th Street, 50 percent in the Bronx, 40 percent in Queens and 25 percent in Brooklyn, Moog estimates.

The old method requires more personnel, but it is fairer and more accurate than using the GIM formula, according to Moog. The city should fund an additional 100 assessors, which would return the staffing level to what it was before 9/11, Moog said.