BY GEOFFREY MAZEL, ESQ.
On Feb. 29, the Presidents’ Co-op and Condo Council held the largest meeting of Queens Co-op Board Presidents and members in Queens County in the last 30 years. More than 50 Boards were represented at the meeting from all part of Queens, including many of the largest co-ops in New York City, in total representing over 20,000 units of co-op housing,
In addition to the overwhelming attendance by the co-op Community, many elected officials and community leaders were in attendance, including State Senators John Liu and Toby Stavisky; State Assemblyman Ed Braunstein; City Councilmembers Barry Grodenchik, Donovan Richards and Costa Constantinides; Former City Councilwoman Elizabeth Crowley; Queens Chamber of Congress President Tom Grech; Council of NY Cooperatives and Condominiums Director Mary Ann Rothman; and representatives from the offices of the NYC Comptroller, the Queens Borough President and U.S. Congressman Tom Suozzi.
The reason for the unprecedented turnout was clear: a broken down and unfair “Byzantine” real estate tax system in New York City and the onslaught of overreaching, ill-conceived, unnecessary and costly legislation recently passed by both the City and New York State. There are numerous critical issues co-op Boards are facing in 2020, but the Summit focused on two of the most critical: one, the NYC Tax Commission Report and two, the so-called “Tenant Protection Act.”
Introductory remarks were made by PCCC co-Presidents Bob Friedrich and Warren Schreiber as well as myself. I explained that for the last decade, the PCCC has been a “lean, mean co-op advocating machine” and is vigorous in pressuring both New York City and New York State to overhaul an unfair and convoluted real estate tax system. Mr. Friedrich called the current tax structure “so complicated and riddled with so many erroneous assumptions that few understand it.” As Mr. Schreiber stated, “The Presidents and Board members in this room are the ones who keep the co-ops affordable, despite the onslaught of unfunded mandates and poorly conceived legislation.”
As a result of the work of the PCCC and several other co-op advocacy groups, the Mayor of New York City appointed a blue-ribbon panel called the New York City Tax Reform Commission. The charge of the Commission was to make recommendations on how to fix the broken tax system. The Commission’s report came out in January of this year.
The report is basically an outline of what needs to be done to fix the system. The most significant recommendation for co-ops would be to include them in a “Residential” class with others forms of home ownership, including one-to-three family houses. Additionally, this class would base the taxes on the fair market value of the property. Currently co-ops are taxed as if they are rental buildings, so this new system would be a substantial change.
However, the report lacks many actual details and leaves many open questions. Mr. Friedrich highlighted concerns about several material issues with the report. Most significantly, co-ops’ market value relative to the overall valuation of all property types would increase significantly under the Commission’s report. Mr. Friedrich expressed great reservations about this large increase in increased valuation and the effect it could have on real estate tax bills for co-ops. A lively discussion ensued at the Summit on this and other specifics of the Commission’s Tax Report.
The next issue discussed was the so-called “Tenant Protection Act.” This legislation was passed by the New York State legislature in June, 2019. It was designed to protect tenants from unscrupulous landlords, but inadvertently includes co-ops too. The most harmful provision for co-ops is the limit of security deposits to no more than one month’s rent (or maintenance, as it’s called in a co-op). As a result, co-ops can no longer accommodate marginal applicants who might be able to put money in escrow in order to receive Board approval to purchase an apartment. Other provisions of the bill limit co-ops’ ability to collect late payment fees and eliminates their ability to collect legal fees and other charges in Landlord Tenant Court.
The large number of attendees at the PCCC Summit was a testament to the dedication of its co-op Board members. The PCCC and its members are confident that the strength of this united voice will continue to be heard loudly at City Hall and in Albany.