Economics & Finance

Co-op & Condo Tax Abatement Analysis



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.

NYCHAs 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 30ththis 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 DOFs 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 that 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 in 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 a total number of households impacted by different cutoff levels based on DOF billable assessed values.

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