Landlords, activists, trade groups call for property-tax freeze

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Civil rights activist Hazel Dukes is joining landlords and real estate trade groups to ask Mayor Bill de Blasio to freeze property taxes amid dismal rent-collection rates.

“Temporary fixes like mortgage deferrals are not enough,” Dukes said in a statement. “Mayor de Blasio has to provide the meaningful lifeline of a property-tax freeze to prevent  the American dream of homeownership from becoming a nightmare.” 

The mayor’s office could not be reached for comment, although the city’s Department of Management and Budget told Crain’s earlier this month that property-tax relief was unlikely, and that it expected $180 million in delinquencies in the summer.

The closures of nonessential business and soaring unemployment have initiated a chain reaction of nonpayment that’s threatening the real estate industry, experts say. Businesses that are closed can’t pay employees, who in turn are unable to make rent. Landlords then have no way to pay their mortgages and tax bills or maintain their properties. 

Forty-five percent of small businesses missed some or all of their rent payments for the past two months, according to data from the Brooklyn Chamber of Commerce. Vornado Realty Trust announced that it had received rent from only 20% of its retail tenants in May. 

Property taxes have risen since de Blasio took office in 2014, according to figures from the city’s Department of Finance, and members of the group expect them to continue to rise in the wake of the pandemic’s devastation of the local economy.

“Our community of homeowners is not positioned to absorb new costs in the form of increased taxes,” Mary Ann Rothman, executive director of the Council of New York Cooperatives and Condominiums, said in a statement. 

Dukes, president of the NAACP’s New York conference, added that a tax increase would disproportionately hurt low-income communities of color that are already hurting.

Other members of the group included landlords in the hospitality industry, which has been devastated by a halt to tourism. The industry reported the highest spike in the city’s unemployment rate for April compared to last year—72%, the state’s Department of Labor found. Low occupancy levels allowed hotels around the city to provide shelter for health care workers, Covid-19 patients and the homeless.

“It’s  essential  and only fair that the city does everything it can to keep hotels in business,” Vijay Dandapani, president and CEO of the Hotel Association of New York City, said in a statement. “We  need immediate property-tax relief.”

But that’s not the only thing worrying landlords. The group also is demanding that interest penalties be cut to 3% from 18% and that property owners be given the chance to pay their taxes through monthly payment plans to avoid bankruptcy.

Data from the Real Estate Board of New York shows that tax revenues from real estate transactions—which make up more than half of the city’s annual tax revenue—are already in trouble. They fell 72% between March and April amid declining deal and leasing rates

This isn’t the first the city has heard about property-tax relief.

In March the group NYC Landlords Unite launched a campaign in response to the ongoing rent strike, calling on property owners to stop paying their taxes. The group, whose change.org petition has 6,000 signatures, said it planned to file a class-action lawsuit against the city to contest tax bills and ask for subsidies. 

Landlords also took action when the Housing Court announced on Tuesday that it would begin scheduling conferences for eviction disputes. Requests from landlords began flooding in, with hundreds of applications on the day of the announcement. 

“We need policies that will support employers  and support their employees,” Thomas Grech, president and CEO of the Queens Chamber of Commerce, said in a statement. “Property-tax relief is a win for property owners, small businesses and residents.”