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Candidate de Blasio the progressive, meet Mayor de Blasio the regressive

Candidate de Blasio the progressive, meet Mayor de Blasio the regressive
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Like an old crooner past his prime, Bill de BlasioBill de BlasioUS records over 14 million coronavirus cases New York City positivity rate above 5 percent, highest level since May NYC mayoral contender challenges New York Times for defining candidacy by marijuana use MORE will surely stick to his heyday tunes off the greatest hits album as he mounts the stage in Iowa next week.  You see, the Mayor is like the Joey Bishop of this Rat Pack; and while most of the audience comes for Frank and Dean, he is hoping to net a few noticeable claps for his timeless ode, “tax the rich.”     

Yet, the progressive crusader of lore is far from the mayor of reality. De Blasio governs a city with perhaps one of the most regressive property tax systems in any municipality in the country; and in truth, the Mayor has done little over his six and a half years as mayor, or 16 years overall in city office, to correct a structure that benefits the wealthiest New Yorkers on the backs of its working class homeowners.      

The disparities, which almost exclusively stem from a 38-year-old state law, were well known at the time of de Blasio’s first campaign for Mayor. The Times highlighted egregious cases like the $48 million condo at the Plaza Hotel that was assessed at only $1.7 million, or the $30 million unit at posh 80 Columbus Circle, valued at just $2 million for tax purposes. For regular folks who perhaps own a home in middle-class Queens at the borough’s median sale price of $650,000, you are likely to be paying taxes on the home’s full value assessment.

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When he took office in 2014, the Mayor would not commit to working with the City Council on a comprehensive redesign of a system that seemed to be punishing New Yorkers of lower incomes. In response, the city’s former Finance Commissioner along with an organization called Tax Equity Now filed a lawsuit, which highlighted the clear discrimination of the system. Instead of settling the case and working towards a reform, the de Blasio administration dug in, claiming there were “no victims.”

To be sure, the city’s property tax system does create clear winners and losers; but what may shock the mayor’s aspiring constituents in Iowa and in-between most of all, is that the de Blasio family holds a prominent place in the winners' circle. The city acknowledges his home as being worth nearly $1.8 million this year, its market value may even be more, but as a result of existing laws it can only tax him on its “effective market value” of $334,000, resulting in a “taxable value” of just slightly more than $20,000 and actual tax of $4,196. Who could blame him for liking the status quo?

The R.O.I. on what is essentially a real estate tax shelter is so good, that the de Blasios actually own two homes on the same block! Not to mention, the mayor gets complimentary housing in the city’s historic Gracie Mansion, so the rentals on his artificially low-taxed properties generated $108,405 in 2018.

These homes are such great investments that the market is now driven, at least in part, by wealthy foreign speculators and oligarchs, all benefiting from an artificially low property tax for homes in zip codes that demand some of the highest rents.

Not all neighborhoods pay the same effective tax rates. The de Blasio family lives in the Brooklyn of your dreams: the Brooklyn of greenmarkets, “Girls” and “Masters of None.” They and their neighbors in leafy Park Slope are assessed, on average, just 86 percent of the average sales price of comparable homes.

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Older homes, like those on the Mayor’s brownstone-lined block, are undervalued even more. One of his 11th Street neighbors, for example, just listed their home in the New York Times for $2.75 million. The city, however, thanks to the antiquated laws which de Blasio has made limited efforts to change, will only be taxing that home on its effective market value of $644,000, for a “taxable value” of $30,635 and actual tax of $6,408.

This home is prototypical of the problem. The records indicate that the property was in the hands of the same family since 1966. They stuck it out through the not-so-great days of the borough’s past; theirs was the Brooklyn of “Dog Day Afternoon” and “Do the Right Thing.” As the neighborhood recovered, and then flourished, they were protected by the city’s cap on assessment increases, ensuring that no one would face an unaffordable rise.

However, the cap is attached to the property, not the owner. So when a new wealthy buyer comes along to purchase it, they will be capped too, despite residing in a multi-million dollar home in the one of the priciest and trendiest neighborhoods in the world.      

On the opposite side of town and in the predominantly black neighborhood of East New York, another house is for sale: 986 Cleveland Street. It is listed for a modest (by NYC standards) $395,000. Sure, the owners there are protected by the same set of laws as their neighbors in Park Slope, but the effect is much different.

Despite living in a neighborhood plagued by high crime, underperforming schools, and poor health stats, and owning a home worth a quarter of Mayor de Blasio’s, the Cleveland Street residents will actually pay more in property taxes to the city government for the privilege: $4,325 to de Blasio’s $4,196.

These disparities are the norm in de Blasio’s New York. While his neighborhood is taxed on average just 86 percent of its assessed values, poorer neighborhoods, those of immigrants and people of color, and some the outskirts, pay far more. East New York is assessed at 112 percent of its collective market value, while in Crotona Park in the Bronx, residents are taxed on 123 percent.

This is all laid out in a study that accompanies the Tax Equity Now lawsuit, which summed up the system as resulting in a “massive under-taxation of some of the City’s wealthiest residents,” and one that is “deeply inequitable and regressive, hurting those who can least afford to be heavily taxed.”

You would be hard-pressed to find any of this on the literature Bill de Blasio is handing out at the Iowa State Fair; and to be sure, if you ask him about it, he will likely tell you that he formed a commission to examine the problem. Unfortunately, this came nearly two years into his second term as mayor, and his administration had not once made reforming the system a legislative priority in the past.

After nearly 13 months, the commission has made no recommendations, and the city’s regressive property tax system is likely to continue through the end of de Blasio’s mayoralty.

Voters around the country should not hesitate to ask him why he speaks of taxing the rich and income inequality in such lofty terms, but refuses to take a hard stand to eliminate the problem under his own nose.

Joseph Borelli is the minority whip of the New York City Council, Republican commentator, professor and Lindsay Fellow at the City University of New York's Institute for State and Local Governance. He has also been published in the NY Daily News, Washington Examiner, and appears on Fox News, Fox Business, BBC, CNN and HLN. You can follow him on Twitter @JoeBorelliNYC.