May 11, 2005
Condo owners beware
State lawmakers are considering raising tax bills
By Chris McKenna
Times Herald-Record
[email protected]
Woodbury – When Elayne Wolfenhaut bought a one-bedroom condominium in Woodbury Heights after her husband's death, a big selling point was that the property taxes were a fraction of what she was paying on her house in Monroe.
Wolfenhaut, 60, had planned to stay in her condo indefinitely. But now she's learned that legislation pending in Albany could double her $2,200 annual tax bill. She figures that's more than she can afford on her salary as a legal secretary.
"Some people can't bear the burden of one more dollar," Kim Chiapperino Schuessler, president of the Woodbury Heights Homeowners Association, said yesterday. "It's just not right. And it's not right that we haven't heard anything about it."
Bills are quietly moving through both the Assembly and Senate in Albany that would change how condominiums and cooperative housing complexes in New York are assessed for property tax purposes.
Supporters say the legislation would remove an unfair ceiling on condo taxes and stop builders from putting up big, detached houses and having the state classify them as condominiums to take advantage of the lower taxes – a trend that has ballooned in Sullivan County and taken root elsewhere.
"Developers are getting cute," state Sen. John Bonacic, a Mount Hope Republican who supports the bill, said yesterday. "They're building single-family houses and calling them condos."
But critics and condo owners just getting wind of the pending bills are howling about the proposed assessment change, which some say will more than double the property taxes on condos when put into effect.
"They're always talking about affordable housing," Jack Baird, a retiree who lives in Woodbury Heights, said of his elected officials. "And then it seems that they're not helping it."
Two mid-Hudson lawmakers – Assemblywoman Aileen Gunther, D-Forestburgh, and Sen. William J. Larkin Jr., R-Cornwall-on-Hudson – are among the bills' co-sponsors.
Gunther, whose constituents have sounded off about the explosion of condos in the Sullivan County town of Fallsburg, argues the legislation would correct an inequity in taxation and generate revenue for school districts that badly need it.
"I certainly don't want to hurt working families. But there has to be some sort of fairness," she said.
Larkin didn't return calls for comment. His
district includes Chester, Monroe and New Windsor, three of the four municipalities in Orange County with the most condos.
Kiryas Joel, a Hasidic community of 17,000 people in Monroe, is composed almost entirely of condos. The number of units in that village was unavailable yesterday, but the figure was high enough in 2003 to push the town's condominium total to 2,249 – one-quarter of all tax parcels in Monroe, according to the state Office of Real Property Services.
When contacted on Monday, Kiryas Joel Mayor Abraham Wieder said he needed to look into the proposed assessment change but didn't return calls for comment yesterday.
Lawmakers from Rockland County, which had more than 8,700 condos on the 2003 assessment rolls, and an organization called the Empire State Condo and Co-op Council are trying to torpedo the bills.
The legislation would leave intact the assessments of condos in buildings higher than three stories or in cities with a population of 1 million or more – in effect, socking suburban condo owners while giving those in New York City a pass.
"I think it's a very cynical bill," Assemblyman Kenneth Zebrowski, a Rockland County Democrat, said yesterday from Albany. "I have been working furiously against it."
The proposal offers politicians an interesting choice. Supporting the bill could incur the wrath of condo dwellers – if they remember the legislation when the next state election rolls around in November 2006.
But it could please other homeowners and win applause from tax-starved municipalities, counties and school districts, which stand to reap a windfall from new condo assessments.
Chester Assessor Andrea Nilon said yesterday that the legislation would more than double the tax bills for roughly 1,000 condo owners in her town and generate about $3.3 million more in tax revenue.
She said assessors statewide have been fighting for years for reforms that would allow condos to be assessed at their market value, like any other home.
"The bottom line is, (a condo) should be assessed the same as any other house," she said.
What's a condo?
Most people think of condominiums as apartments you own, but "condominium" merely describes a form of ownership, not a housing style. All it means is the owner possesses his or her unit and a percentage of the "common areas" shared with other owners. An apartment could be owned this way, but so could a town house or a detached single-family home.
State law says that condominiums and cooperative housing should be assessed differently than single-family houses. Under the law, the total assessment of all condominiums in a building or complex can't exceed what the assessment of the entire property would be if treated as a single tax parcel. That overall value is calculated by looking at how much combined income the condos would generate if they were rented out instead of individually owned.
Single-family houses, by contrast, are assessed according to their market value and the assessments of similar properties in a given area.
Critics complain that state law places an unfair ceiling on condo assessments – essentially giving condo owners an undeserved tax break. They say that basing condo values on theoretical rental income guarantees the assessments will be lower than those of comparable single-family houses, since homes that can be purchased are more in demand than rental housing.
Chris McKenna
By the numbers
Below are the towns and cities with the most condominiums in Orange, Ulster and Sullivan counties, as of 2003:
Monroe: 2,249
New Windsor: 1,347
Fallsburg: 1,028
Middletown: 985
Chester: 951
Town of Newburgh: 653
Blooming Grove: 585
Warwick: 488
City of Newburgh: 426
Wallkill: 347
New Paltz: 276
Source: New York State Office of Real Property Services
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