NYC must overhaul property-tax system after years of ‘discriminatory’ inequity: court

New York City has been ordered to overhaul its tax system in a landmark ruling by the state’s highest court after black property owners claimed the process favors their counterparts in whiter affluent areas.

“After decades of avoiding responsibility to fix a universally acknowledged problem and a seven-year legal battle, city and state leaders will be required to create a property tax system that is equitable and just for millions of renters and homeowners in lower-income and minority communities,” said Martha Stark, policy director for Tax Equity Now New York, TENNY, the group that filed the lawsuit, in a statement after Tuesday’s ruling.

The plaintiffs argued that the city’s assessment process — which helps determine a property owner’s taxes — discriminates against minorities by unfairly jacking up their property values for tax purposes.

A major ruling by the state’s highest court Tuesday will force the city to make major changes to how property taxes are assessed. Christopher Sadowski
A major ruling by the state’s highest court Tuesday will force the city to make major changes to how property taxes are assessed. Christopher Sadowski

For example, the system assesses properties at higher values in lower-economic areas such as Jamaica, and Queens, when compared to similar sites in predominantly white upscale neighborhoods such as Park Slope, and Brooklyn, they said.

TENNY alleged in its suit that these differing assessments translate to de facto discrimination because of their “staggering inequities’’ that hurt “those who can least afford to pay heavy taxes,’’ according to court papers.

“Multi-million-dollar properties are taxed at similar or lower rates than less valuable properties and … real property in majority-people-of-color districts are overassessed and subjected to higher taxes compared to properties in majority-white districts,” the docs say.

State high-court Judge Jenny Rivera wrote in her opinion, “TENNY’s allegation that the City’s tax system perpetuates segregation suffices.”

Ana Champeny, a top researcher at the Citizens Budget Commission, told The Post on Tuesday, “The court decision appears to suggest that the city has within its administrative power the ability to make changes that would reduce disparities in property taxes.”

A lower court had ruled that it was up to the state legislature to fix any issues.

“What the court said is the city can achieve uniformity in assessments within the cap. It can be done administratively,” Stark told The Post in an interview Tuesday.

The court decision will force the city to change its formulas to assess property values. Christopher Sadowski
The court decision will force the city to change its formulas to assess property values. Christopher Sadowski
A lower court will stipulate exactly how the city has to comply with the high court’s ruling moving forward. Christopher Sadowski
A lower court will stipulate exactly how the city has to comply with the high court’s ruling moving forward. Christopher Sadowski

The exact details of how the city will have to comply will be dictated by a lower court moving forward.

New York City Mayor Eric Adams declined to chime in on the court’s decision Tuesday, but his lawyers said they’ll comply with the legal direction.

“The court of appeals made the determination that there was standing. That does not mean the lawsuit is concluded, and it will go back to a lower court where the decision will be made,” New York City Corporation Sylvia Hinds-Radix added.

Gov. Kathy Hochul also declined to go into specifics as she and her legal team said they continue to review the ruling.

“I’m not going to get ahead of myself on this,” Hochul said Tuesday. “It’s really important to get this right, that we comply with the dictates of this decision, but also make sure that we’re doing the best we can to eliminate discrimination.”

The landmark decision was handed down by an increasingly liberal majority on the Court of Appeals. The leftward streak has been increasingly noticeable since Hochul appointed Judge Rowan Wilson to lead the court after a bruising fight for a more moderate nominee last year.