Rising costs aren’t showing any signs of slowing down.
Homeowners and landlords in the city are preparing for increased property taxes as Mayor Zoran Mamdani’s promise of a “rent freeze” may lead to higher expenses for those not living in rent-controlled apartments.
Property owners with government-regulated units are expressing concerns that if the mayor’s proposed “rent freeze” is enacted for rent-controlled apartments, they might struggle to maintain their properties and may need to increase rents on market-rate apartments to compensate.
“You can’t say you want to freeze rents and then increase property taxes,” commented Humberto Lopez, CEO of HL Dynasty and Gotham Housing Alliance, who manages around 100 properties.
Lopez mentioned that his 20-story rent-regulated building at 446 Senator St. in Bay Ridge could see its tax jump from $78,000 to $91,000 based on the latest property evaluations, which reflect a 6.2% rise in co-op, condo, and apartment values.
More generally, assessed values for single-family homes and buildings with up to three units are projected to rise by 4.7%, which will likely affect property tax bills as well.
“If we’re freezing rents, then property taxes should be frozen or lowered. Instead, the costs for maintaining my building are going up,” he continued.
Recently, the city’s Department of Finance unveiled a preliminary list detailing real estate valuations for the upcoming fiscal year, clarifying the expected property tax increases. This list partially determines future property tax adjustments.
The tax hikes are tied to the rising market values of the city’s real estate, rather than an increase in the tax rate itself.
- For Type 1 properties, which include 1-3 family homes, average appraised values rose 4.7%.
- Staten Island saw the largest increase, at 5.1%.
- Class 2 properties, encompassing co-ops, condos, and rental apartments, experienced an average increase of 6.2%.
- Brooklyn, known for its popularity among Mamdani supporters, reported an 11.1% increase in co-op and apartment building appraisals, the highest in the city.
- Commercial property valuations increased by 5.8%, with the Bronx witnessing an 11% rise, the largest in this sector.
- Appraisals for office buildings rose by 4.2%, while commercial buildings increased by 5.9%.
- Brooklyn also saw the highest increase in commercial building valuations, hitting 7.6%.
“These rising assessments are going to lead to higher property tax bills,” noted a spokesperson from Affordable Homeowners of New York.
“Mayor Mamdani promised to lower living costs, yet under his leadership, taxes have been quietly rising, which owners inevitably pass on to renters,” they added. “These increased valuations mean subtle rent hikes for all tenants in New York, putting additional pressure on regular homeowners.”
In a related situation, small property owners filed a lawsuit last fall against New York state’s 2019 Rent Stabilization Act, which they argue caps rents on vacant units, making it impractical to lease them out.
Currently, the city has about one million rent-stabilized units, with rent levels determined by the Mayor-appointed Rent Guidelines Committee.
The Rulgujuraj brothers, who are plaintiffs in this lawsuit, allege that the rent for a vacant room in their building is capped at $700, and renting it out would mean operating at a loss for years.
Lopez expressed concerns for owners of single-family homes as well. He owns a three-family house in Red Hook, Brooklyn, and projects his property taxes could climb to around $38,000 from roughly $35,151.
“In Red Hook—that’s outrageous,” he remarked.
As for the mayor’s administration, they have postponed any increase in real estate taxes.
“No, the city isn’t raising property taxes,” said spokeswoman Dore Pekek. “The last time we increased tax rates was back in January of 2014 under former Mayor Bloomberg.”
Pekek clarified, “This annual preliminary report simply assesses property values. The mayor has shown commitment to reforming our property tax system.”
City Hall reiterated that assessed values account for factors like new building developments and economic shifts, and they are not the sole determinants for tax calculations. Statutory caps on assessments are also in place to limit sudden increases.
Mamdani stirred debate during his successful campaign, stating he wanted to shift tax responsibilities from “over-taxed” homeowners in suburban areas to “wealthier, predominantly white neighborhoods.”
He also proposed changes to state laws so that co-ops and condominiums wouldn’t be taxed like rental properties.
The Department of Finance issues notices to property owners, encompassing details like market value and appraised value, allowing time for owners to review and appeal preliminary assessments to the City Tax Commission before finalizing them in May.
For Class 2, 3, and 4 properties, challenges must be submitted by March 2, while Class 1 property owners have until March 16. Relevant forms can be obtained from the Tax Commission’s website.
Ultimately, the Department of Finance will use finalized assessments in June to create property tax bills for the upcoming fiscal year starting July 1.
Additionally, the agency provides several tax relief options for qualified homeowners, including programs for seniors, veterans, the disabled, and religious leaders.
They also offer payment plans so that property owners can manage tax payments over time instead of in a lump sum.
