By: Greg David – The City
Unpaid property taxes in New York City are soaring as homeowners struggle and the pandemic recession slashes the rents landlords are collecting from both commercial and residential tenants.
The arrears rose to $1.3 billion in February — 4.5% of the almost $30 billion due, according to figures released Monday by city Comptroller Scott Stringer.
By comparison, unpaid property bills for the fiscal year that ended in June 2020 equaled 1.8%. Even in the aftermath of the 2008 financial crisis, owed property taxes peaked at 2.17% or half February’s figure.
“We have been warning about the inevitability of this since the start of the cancel-rent movement,” said Jay Martin, executive director of the Community Housing Improvement Program, which primarily represents owners of rent-regulated buildings. “Something is giving way in the fabric of property ownership in the city.”
Commercial properties represent just over half the unpaid taxes. With tourism paralyzed, the delinquency rate for hotels citywide is 10%, with Brooklyn hotels double that at 20%.
Manhattan commercial properties have a lower default rate than those in the other four boroughs. While Manhattan properties have seen the biggest fall in occupancy, many tenants are still paying rent and large landlords have so far had the financial resources to weather the crisis.
City officials and some real estate experts are divided on whether unpaid property taxes will increase in the months to come amid an eviction moratorium that goes through at least May 1 and widespread economic suffering among New Yorkers.
Stringer expects the delinquency rate to finish the year at 3%, with late payments cutting the amount owed. The de Blasio administration’s budget is also based on 3% going unpaid.
Both expect higher unpaid bills and lower assessments for commercial buildings to reduce overall property tax revenues for the next fiscal year by 4.5%, to just over $29 billion, the first decline since 1996.
‘Only Get Worse’
Meanwhile, the unpaid percentage for all residential properties — apartment buildings, coops, condos and one- to three-family homes — is 4.9%.
“We would expect delinquencies to only get worse,” Martin predicted. “Property taxes make up 50% of operating expenses for smaller landlords of rent-regulated buildings, and a large percentage of multi-family rent-regulated owners are operating at a loss.”
Martin called on the state to accelerate the distribution of rent subsidies. The federal aid bill passed in December would provide $1.3 billion to help residential tenants in the state.
A previous effort by the Cuomo administration was botched: By the end of December, only $40 million of the $100 million program administered by the state Division of Homes and Community Renewal, had been disbursed to 9,600 households. The program closed on Feb. 1 but no update has been released on the amount provided.
(TheCity.nyc)
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