Mayor’s Agenda May Drive Property Tax Reform
David R. Jones, La Nueva Mayoria / The New Majority
For decades, politicians have criticized New York City’s property tax system as unfair, outdated and overly complex. And in that time, little was done to fix it. It has become the ultimate political third rail.
Mayor Zohran Mamdani’s opening bid to pay for his ambitious agenda provides the best opportunity in years to tackle property tax reform. The mayor’s gambit provides our elected leaders an opening to finally inject fairness into a system that is a thorn in everyone’s side.
By necessity, Mamdani’s calls for affordability would require property tax reform, and there is every indication the mayor will float a proposal in the days and weeks ahead. Just about everyone involved — real estate barons, small landlords, homeowners, and politicians from both political parties — largely agrees that New York City’s property tax system needs a makeover.
The mayor’s proposals to pay for his agenda appear aimed at forcing the issue. His strategy, which calls for a 9.5 percent increase in property taxes on all NYC real estate or a two percent income tax hike on roughly 34,000 individuals earning more than $1 million annually, is straightforward. The play is to make tax hikes on high earners more palatable than the broader, extremely unpopular property tax increase.
New York City Council Speaker Julie Menin has already said the property tax proposal is dead on arrival, and last week the City Council countered with a budget proposal that focused on savings from efficiencies and reforms.
Governor Kathy Hochul, who is campaigning for reelection, and the State Legislature, which has a say in any tax hikes, have not fully endorsed the mayor’s tax increase on high earners. However, the specter of Mamdani’s tax proposals may open a pathway for property tax reform that has eluded prior New York City mayors.
Penalizing Poverty and Upholding Racial Disparities
New York City has an unacceptably regressive property tax structure. Reforms should include a combination of abolishing some abatements, increasing levies on vacant land, transitioning to a true-value land tax, and giving tax credits to homeowners and tenants alike.
My organization, the Community Service Society of New York (CSS), has published several studies and polls showing that the current property tax system penalizes poverty and upholds racial disparity. It punishes owners of multifamily apartments while charging high-value buildings a lower effective tax rate. It also rewards speculators who sit on vacant lots and underutilized land.
Single-family homes — including mansions and brownstones in neighborhoods like Forest Hills, Queens, and Prospect Park South, Brooklyn — have an effective tax rate 2.4 times lower than small rental buildings and more than five times lower than large rentals, a 2025 CSS study found. The last remaining predominantly Black neighborhoods in the city — Canarsie, East New York, and Cambria Heights — are paying tax rates double those paid in gentrified Park Slope or the East Village.
The current real estate tax system dates to 1981, when the State Legislature passed a law dividing property in the city into four classes: residential properties with one to three units; residential properties with more than three units; utility company equipment and special franchise property; and all other real property, such as stores, offices, and factories.
The system is broken because New York City has not conducted a comprehensive, citywide property tax reassessment in decades. Instead, the system has relied on historically based assessments rather than current market values. As a result, there are wide disparities in what owners pay, both between property classes and from one neighborhood to the next.
A long list of New York City mayors have tackled, but failed to change, a property tax system they all agreed needed reform. David Dinkins named a commission that flatly concluded “the property tax in New York City not only appears unfair, it is unfair.” It called for uniform residential valuations. The report, however, was published two days before Dinkins left office.
Rudolph Giuliani shelved the Dinkins commission findings and, at the urging of the real estate lobby, won passage of a two-year tax abatement that helped apartment owners, which was repeatedly renewed. Michael Bloomberg, who did not take up reforms, signed an 18.5 percent tax hike to close a $1 billion budget deficit. Bill de Blasio appointed another commission that, late in his second term, recommended changes in the assessment methods for co-ops and condominiums and the removal of caps on tax increases for small homes. No changes were adopted.
Eric Adams floated a proposal that would have reduced tax rates for 275,000 households that coincidentally formed his political base in the eastern Bronx, eastern Queens, and southern Brooklyn. He then proposed tax rebates. Both plans, which faced intense criticism and legal challenges, were never enacted.
Now the property tax reform issue will test Mamdani’s leadership. Regardless of where lawmakers land on his funding proposals, now is the time for sorely needed reform — for once and for all.