Audits highlight faulty property values

A series of audits conducted by Comptroller John Liu’s office recently found that the Department of Finance, in some cases, arbitrarily assigns property assessments, sending co-op and condo owners on a financial roller coaster.
According to Liu’s office, the Finance Department (DOF) failed to tell homeowners of a change in its property assessment method in Fiscal Year 2011/12, which resulted in an uptick in property taxes while home costs were stagnant.
At a press conference last week in front of the Cryder Point houses on Powell’s Cove Boulevard, speakers charged that DOF officials can change assessment numbers by hand in the department’s computer system, sometimes resulting in errors.
The tentative assessment for Cryder Point rose 51 percent last year before it was corrected, Liu said.
Speakers at the conference called for more transparency for the public to see what their property values are based on, but Liu said DOF is so far only responsive to some of the audit’s suggestions.
“Homeowners shouldn’t have to stress over wild, unexpected, inexplicable swings in their property assessments and taxes,” he said.
While taxes rose 12 percent citywide last year, some co-op owners saw an average 32 percent increase in market values, according to one of the audits.
In addition, DOF did not yet explain why 10 percent of the 859 co-op buildings in Queens received higher property values than the department’s assessment formula should have allowed, the audit states.
The other audit found faulty decisions in the department’s assessments, such as comparing the value of a Brooklyn co-op to a parking lot, and assessing the value of a condominium building in Flushing by comparing it to a rental property in Far Rockaway.
However, a DOF representative countered that the “department works each year to assess more than one million properties transparently and accurately. We continue to work with New Yorkers throughout that process.”
The audits followed the introduction of two bills by state representatives that aim to keep co-ops and condominiums from paying excessive legal fees when challenging a tax assessment, as well as to stabilize assessments for two years after a challenge is won.
State Senator Toby Ann Stavisky and Assemblyman Edward Braunstein introduced the bills in March after co-ops in Bay Terrace spent $37,000 in legal fees to successfully fight last year’s assessment. As a result of the challenge, the city reduced the assessment to $11.8 million, only to raise it back to $15.3 million in January for the 2012/13 tax season.
In addition, the president’s Co-op and Condo Council recently approved a bill introduced by State Senator Tony Avella which would work to create a new property tax class, Class One A, for co-op and condo owners by capping yearly taxes at 6 percent, and 20 percent over a five year period.
“But it shouldn’t be up to these complaints and electeds getting involved, the Finance Department should have gotten it right in the first place,” Liu said.
Stavisky, who lives in a Bay Terrace co-op, said last week that residents in the area are middle class and can’t afford to keep up with drastically fluctuating taxes.
“What to me makes it worse is that the shareholders throughout the city of New York have lost confidence in the Department of Finance and the integrity of the process, and that to me, long-term, is a serious problem with the co-ops and condos,” she said.