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In February, 2002, federal prosecutors uncovered a conspiracy in the New York City
Finance Department involving some 18 current and former city assessors who accepted
millions of dollars in bribes to improperly reduce the assessments on at least 500
properties and which may have lasted over 35 years. Such criminal conduct may have
cost New York City taxpayers from $200 million to as much as one billion dollars in
lost revenue, but more significantly, may have eroded property owners’ confidence
in the system of real property assessment and taxation.
Responding to this outrage, the Real Property Taxation Committee held a hearing to
inquire immediately into the facts surrounding the system of assessment
administration and assessor practices in New York City. A public hearing was
conducted by the Committee on March 21, 2002, at the Association of the Bar of the
City of New York, at which eleven witnesses testified.
The witnesses included Honorable Martha E. Stark, Commissioner, NYC Department of
Finance; Honorable David Weprin, Chairman, NYC Council Finance Committee; Steven
Spinola, President, Real Estate Board of New York; James DeCuzzi, President, Tax
Appeals Commission; and assessors, attorneys, other representatives of property
owners, and real estate experts.
The scope of the hearing was the need for assessor accountability and supervision,
improvement of assessor training and compensation, upgrading of technology used to
compute assessments and the provision of quality control. Moreover, the hearing
brought up the issue that the New York City assessment system needs to have the
spotlight shined on its flaws and should be simplified so the average citizen
understands how it works.
The hearing prompted the Committee to introduce and recommend the following
legislation to start to contend with the issues the hearing raised:
A.10434 (Stringer),
A.11404 (Stringer),
A.11405 (Stringer),
A.11406 (Stringer),
A.11407 (Stringer),
A.4683A (Brennan). The bill introduced by
Assemblymember Brennan has passed both houses of the legislature and is expected
to be signed into law. The substance of the legislation includes the following:
- New York City should have the authority to recover, by civil action,
revenues lost as a result of criminal conduct which reduced taxable
assessments;
- An independent City Assessor ought to be established with the
responsibility of certifying the accuracy and completeness of the
assessment roll;
- City assessors and assessing personnel should meet minimum
qualifications and be certified as having requisite education and
training;
- State reimbursement should be available for training courses;
- Assessors should be subject to financial disclosure ethics law;
- Methods of valuation, including capitalization rates and other
data used in determining assessments should be made available to
property owners;
- Sales data for real property transactions should be made available
to the public; and
- State reimbursement to New York City for maintaining updated
assessment valuations and assessment rolls should be granted in full.
Real Property taxes account for 20 percent — about $9 billion — of New York City’s
revenue and is vital to the maintenance of City services. It is therefore crucial,
especially now when the City and State are facing severe budget deficits, that the
assessment process is complete and exact to ensure that none of this revenue is
lost. The Committee’s legislative recommendations will open a dialogue that will
enable the City and the State to work together to find solutions to the problems
in the tax assessment system.
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The School Tax Relief (STAR) Program — the first state funded real estate tax
exemption to be offered in New York State — was enacted in 1997. Although this
program has been highly successful, Mitchell-Lama homeowners have been denied
STAR eligibility for the past four years. Now, after years of protest,
approximately 75,000 Mitchell-Lama cooperative owners will be eligible for property
tax discounts under STAR.
There are two types of STAR programs — Basic STAR and Enhanced STAR exemptions. The
Basic STAR exemption is available to all residential property owners, regardless of
age or income, as long as the property is used as the applicant’s primary residence.
The Enhanced STAR exemption is available to senior citizens whose combined household
income does not exceed $60,000. Seniors with total annual incomes above $60,000 are
still eligible for Basic STAR.
To apply for the STAR exemption, Mitchell-Lama homeowners can use one of the
following methods:
- Send a request via the internet at www.nyc.gov/finance
- Call the STAR exemption office at (212) 361–8215
- Write to New York City Department of Finance, STAR Exemption
Program, 66 John Street, 13th Floor, New York, NY 10038
Make sure to include your name, mailing address, property address (including apartment
number), tax block and lot numbers (these are available from your building management
office for co-op and condo owners), and the type of STAR benefit application that you
are requesting.
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In addition to the inclusion of Mitchell-Lama owners, the following improvements
in the STAR program were also achieved this legislative session.
 This
year’s budget included a provision that would account for cost-of-living increases
based upon the rate of inflation. This automatically raises the income eligibility
levels for seniors receiving enhanced STAR benefits. Enhanced STAR saved eligible
seniors $597 million last year — the cost-of-living increase will mean an additional
$10 million in savings.
It is now
easier for seniors to meet their application requirements. Rather than filing their
income annually, seniors can now choose to have their income verified automatically
by the Department of Taxation and Finance.
Extensions
have also been provided for homeowners who fail to meet a STAR deadline due to a
death or illness in the family, or other extenuating circumstances. After the
dreadful events of September 11, 2001, it was clear that a provision needed to be
established to protect people from losing the STAR exemption as a result of a
tragedy.
Certain
qualified tenant-stockholders of co-ops are eligible for a STAR exemption. Although
the individual applies, the exemption is paid in a "lump" sum directly to
the co-op and is then distributed to the tenant stockholders. A new law has been
established which requires co-ops to provide a written statement within sixty days
to tenant-stockholders detailing how they are crediting the STAR exemption. This
will clarify any potential ambiguity associated with the distribution.
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This session, two bills introduced by Assemblyman Stringer to encourage the
development of affordable housing in New York City were passed into law. The
first bill amends Section 421-b of the real Property Tax Law to authorize the
City of New York to extend the date by which new construction of one and two
family dwellings must be commenced and then completed in order to qualify for
the exemption under this section. Exemptions for new construction of private
dwellings encourages the growth of middle class housing in New York City,
especially in the outer boroughs. Over the past three fiscal years, there have
been approximately 19,500 dwellings which have qualified for this exemption.
This program is important to the replenishment of the housing stock in New York
City.
A second law would amend Section 488-a of the Real Property Tax Law to authorize
New York City to extend the date by which not-for-profit and for profit owners
rehabilitating single room occupancy housing (SRO) are eligible to receive real
property tax benefits. SRO housing is an important source of affordable housing
for individuals of low income who are often elderly or formerly homeless. The
bill would continue to provide an incentive for owners to upgrade major structural
systems in such buildings, thereby rendering such residential housing more
habitable.
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Dear Fellow New Yorkers:
Scott Stringer, Chair 
