As part of an urgent response to support NYCHA, Citizens Housing & Planning Council (CHPC) put forth a bold idea to reform New York City’s Co-op & Condo Tax Abatement program to help the city pay for NYCHA’s capital needs.
NYCHA’s large capital needs require a menu of funding tools to help close their funding gap. Reforming the Co-op & Condo Tax Abatement could provide NYCHA with a steady revenue stream, something the agency could plan around. Expiring on June 30th this year, the Co-op & Condo Abatement is up for renewal and ripe for reform.
To better understand how to reform the abatement and who currently benefits from it, CHPC conducted analysis of several different data sets. The first is a data set provided by the Department of Finance (DOF) for Fiscal Year 2019 Co-op & Condo Abatements. Additionally, CHPC analyzed 2017 NYC Housing Vacancy Survey (HVS) data on Co-op & Condo owners by income and location. HVS analysis shows the total percentage of Co-op & Condo owners at specific income levels. CHPC also compiled historical data on the abatement provided in DOF’s Annual Report on Tax Expenditures- not included on this page.
Co-op & Condo Owner Income Analysis
CHPC conducted analysis of Co-op & Condo owners by looking at the 2017 NYC Housing Vacancy Survey (HVS). This analysis shows Co-op & Condo owner income levels by household and by location. The HVS occupied household data files that were used to complete our analysis contain a sample of approximately 13,000 households. While this is a large sample size, when drilling down to the number of Co-op & Condo owners at a sub borough level, the sample sizes become much smaller. HVS data shows the percentage of Co-op & Condo owners at various income levels, but available data sets do not allow us to determine the household income for individual abatement recipients.
Potential Avenues to Reform the Co-op & Condo Tax Abatement
How can we ensure that reforms to the Co-op & Condo tax abatement protect low- to moderate- income homeowners but still produce significant savings to help public housing? CHPC conducted analysis of several options for reform that protect low- to moderate- income homeowners but still generate savings to help NYCHA residents. Options include determining a cut off based on the following:
- By household income
- Co-op & Condo Abatement amount
- DOF Billable Assessed Value amount
Co-op & Condo owner income data is not available at the household level. Without that level of data there is no way to determine the precise amount of the abatement that would be saved if a cut off based on income was available.
Another option for reform is to determine a cut off based on the size of the abatement (removing households who receive the largest abatements). CHPC looked at removing the top 10% of units receiving the Co-op & Condo tax abatement. Removing the top 10% of the Co-op & Condo tax abatement would remove around 30,000 units and would result in $168,000+ million savings.
A cut off level could also be established by the DOF determined billable assessed value. Billable assessed values are lower than actual market-rate values and incorporate the phase-in of increased property values (which differentiates between new, high value units and older units that have had swings in their market value). The table below shows the potential savings and total number of households impacted by different cutoff levels based on DOF billable assessed values.
A real housing victory is in reach: Fix NYCHA by closing luxury tax breaks Op-Ed by Rachel Fee, NY Daily News, 06/10/2019
AM New York Highlights Co-op & Condo Reform Legislation
Co-op and condo tax abatement revisions bill could benefit NYCHA By Sarina Trangle, AM New York, 05/30/2019
Assembly Member Rodriguez Introduces Co-op & Condo Reform
Lawmakers: Axe Tax Break for High-End Condos and Coops to Help Fund NYCHA by Jarrett Murphy, City Limits 04/08/2019
Read more about the press conference with Assembly Member Rodriguez and see CHPC data in the news!
CHPC’s Co-op & Condo Abatement Reform Highlighted in Politico
Proposal would exempt high-end condos and co-ops from tax break By JANAKI CHADHA 03/04/2019 05:01 AM EST
Read more about state legislation aimed to remove high-end properties from the Co-op & Condo Tax Abatement.
Original Op-Ed by CHPC Executive Director, Jessica Katz
Read the original NY Daily News Op-Ed by CHCP Executive Director, Jessica Katz.
CHPC Joins Coalition to #SaveNYCHA
Read about the Co-op & Condo Tax Abatement Reform as part a larger city and state ask for additional funding for NYCHA.
Blast From the Archives
From CHPC’s 1959 Memo to The Committee on Tax Exemption:
“Tax abatement is a privilege, not a right. It is an economic benefit bestowed by public officials upon private persons which affects the tax base of the community. Abatement must therefore be limited in amount and be allocated without fear or favor. Inherently an outright public subsidy, it must be used to accomplish a maximum of social good.”