The co-ops and condos of eastern Queens are in a battle of their lives to keep their communities affordable. Co-ops are the last bastion of affordable housing in New York, but it is becoming increasingly more difficult to sustain such affordability when faced with an onslaught of unfunded mandates and staggering property tax increases.
In the midst of the worst real estate decline in a generation, the Department of Finance (DOF) would have us believe that our property valuations have increased in a single year by double or triple digits. These flawed valuations by the DOF are poised to create enormous hardships to the working class families living in our communities.
Although city-wide the average valuation increase was under 10 percent, many of the co-ops and condos in Queens have been hit with increases 10 or 20 times that amount. On the increase list, 86 percent in Glen Oaks Village, 122 percent in LeHavre and 147 percent in Cryder Point. These types of valuation increases will lead to staggering hikes in property taxes that can only be paid by crushing increases in monthly maintenance fees paid by co-op owners.
Under current law co-ops are valued as if they are rental properties, which they are not. As a result the DOF looks for comparable rental buildings to determine their value based on the rental income they generate. However, instead of using “like-kind” co-op comparables, the DOF was caught red-handed using commercial properties to create the valuations for residential co-ops. Until they were caught and exposed by my investigation, they had continued to defend the indefensible.
Now, the DOF is in full damage control mode. Their explanation that it was simply “a computer glitch” rings hollow. It is a scandal that runs deep and wide.
Even when the DOF properly used residential properties as comparables, they cherry-picked buildings with the highest rental incomes in order to create the highest possible valuations.
DOF Commissioner David Frankel continued to maintain that the valuations were done properly even after he testified before the City Council that a new computer system was deployed for the first time this year to select comparables. That all changed when the New York Post did a page two expose on the scandal and the local media including The Queens Courier, provided extensive coverage of this issue.
Commissioner Frankel is an unelected agency head, but his decisions will have far greater impact than even those of elected officials. Call it what you will, arrogance or indifference; both are unacceptable when the results are devastating and irreversible.
Presidents of 50 co-ops in Queens, home to 100,000 residents, have been united in this battle and have organized to bring pressure on elected officials, the mayor and the finance commissioner.
We cannot afford to lose this battle.
Many co-ops have already held town hall meetings to overflow crowds that have even had the local politicians buzzing about it. We have organized a rally on the steps of City Hall to take place on Sunday, May 1 at 2 p.m. The next day, Councilmember Mark Weprin will be holding City Council hearings.
These valuations are set to begin on July 1. It is now time for Mayor Bloomberg, who has been MIA on this issue, to remove DOF Commissioner Frankel from his post for failing to conduct a valuation in accordance with the law and failing to recognize the devastating impact such flawed valuations will have on our communities.
The Presidents Co-op Council is calling for a full Independent Investigation and for the City Council and State Legislature to protect its citizens by halting the imposition of these valuations until such investigation is completed. In the meantime, the co-op presidents are preparing to bring legal action if necessary to stop this insanity.
Bob Friedrich is President of Glen Oaks Village, the largest garden apartment co-op in New York. He also founded the Presidents Co-op Council, a think tank of co-op Board Presidents in eastern Queens representing 50 co-ops and 100,000 residents.