May 09, 2025
New York City’s property tax system just turned 50 — but no one’s celebrating. Especially not the renters or developers trying to bring more affordable housing to the city.
A new report titled “Footing the Bill” by the Community Service Society and the Progress and Poverty Institute lays out what many in real estate already know: multifamily buildings are getting hit with high property taxes, while single-family homes and luxury condos get away with paying less.
In fact, the effective tax rate on apartment buildings with 10+ units is more than five times higher than on smaller one- to three-family homes.
That’s a huge disincentive for investors and developers looking to build the kind of housing we actually need.
And the kicker? Two-thirds of New Yorkers rent. So while the majority of households are renters, the tax system is skewed to favor homeowners — especially in wealthier, whiter neighborhoods.
Areas like Park Slope and the East Village benefit from caps on assessment increases, meaning their taxes stay low even when values skyrocket.
Meanwhile, working-class neighborhoods with slower appreciation, many of which are home to Black and brown New Yorkers, pay a disproportionately high share.
As a broker, I’ve seen how this plays out. Rental developers are squeezed by higher carrying costs, which they pass on to tenants in the form of higher rents.
That slows new construction and worsens the housing shortage.
Even co-ops and condos — particularly high-end ones — are assessed using outdated comparisons to rent-regulated apartments.
So a luxury unit in Manhattan can end up paying far less in property taxes than its actual market value would suggest.
There’s currently a court case pending (thanks to the folks at Tax Equity Now) that could finally push the city to act.
The state’s highest court already ruled that the lawsuit deserves a real hearing. But despite that momentum, the Adams administration is stalling, and mayoral candidates aren’t touching the issue.
City Comptroller Brad Lander has called for the kind of bold reform we need: unifying residential property classes and slashing taxes on rentals by 30% to encourage more development. That would be a game-changer — if anyone in power has the guts to make it happen.
Until then, we’re stuck with a broken system that punishes the people who can least afford it, and makes it harder to solve the affordable housing crisis we talk about every election season.
Let’s hope the courts — or the next mayor — finally do something about it.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
