City homeowners and landlords are facing potential increases in property taxes as Mayor Zohran Mamdani’s recent “rent freeze” initiative raises concerns among property owners. While the mayor aims to protect tenants in rent-controlled apartments, landlords feel that this promise could lead to increased operational costs, forcing them to raise rents on market-rate properties.
Humberto Lopes, CEO of HL Dynasty and the Gotham Housing Alliance, pointed out the financial strain this would place on building owners, highlighting his own situation. He noted that the property taxes for one of his rent-regulated buildings in Bay Ridge may rise significantly, from $78,000 to $91,000 due to an average increase of 6.2% in property assessments across the city. Meanwhile, assessments for single-family homes and small buildings increased by 4.7%, potentially translating to steep property tax bills.
The city Department of Finance released preliminary assessment rolls indicating this upcoming property tax increase, which will reflect the rising value of the housing stock rather than a hike in the tax rate itself. Specifically, assessments for one- to three-family homes rose by 4.7%, with Staten Island witnessing the highest increase at 5.1%. Larger apartment buildings saw an even greater surge of 6.2%. Brooklyn reported the largest hike, with apartment buildings experiencing an 11.1% increase, while commercial properties saw a 5.8% rise in their assessments.
The rising tax assessments have been criticized as an “invisible rent hike” by representatives from Homeowners for an Affordable New York, stating that property owners might feel compelled to pass these increased costs onto tenants. They argue that while Mayor Mamdani pledged to make the city more affordable, the unnoticed hike in assessments contradicts this goal.
Compounding these concerns, small property owners have taken legal action against New York State, claiming that the Rent Stabilization Law of 2019 has rendered it unfeasible to lease vacant units due to strict rent caps on unoccupied apartments. Currently, thousands of rent-controlled units are left vacant, contributing to a market with over 26,000 such “zombie units.”
Lopes emphasized the burden that small residential property owners will face, estimating property taxes on his buildings in Red Hook could soar from $35,151 to approximately $38,000. The Mamdani administration has defended the upcoming assessments, stating that there has been no actual increase in tax rates and that the assessments reflect general economic growth and adjustments in property values.
The Department of Finance has made it clear that property owners have the opportunity to review and contest their assessments through an independent city Tax Commission before the final roll is published. This process opens avenues for property owners to challenge valuations and potentially mitigate the impacts of rising assessments.
While challenges loom for property owners, city officials are advocating for reforms to the property tax system to resolve these conflicts and ensure fair taxation practices that do not disproportionately burden homeowners. There remains a hopeful outlook from some city officials as they work towards comprehensive reforms that aim to balance the needs of both tenants and landlords alike.