Expiration of Controversial J-51 Program Could Prove Surprising
By Carl Gaines October 9, 2012 7:45 am
reprintsIn June 2012, the Community Service Society issued a policy brief on the program detailing many facets of the program, including how its $257 million in 2011 New York City tax expenditures dwarf what’s received from some federal programs, including the Community Development Block Grant.
CSS policy analysts Tom Waters and Victor Bach wrote how the program, established in 1955 as a way to improve rent controlled apartments, “was reconfigured as a response to declining investment in New York City.” In the early ’80s it was tinkered with multiple times, with amendments added that affected location and average price of a building’s units.
And indeed a perusal of the J-51 abatement and/or exemption data from the New York City Department of Finance shows buildings, bought for investment, in some of the city’s most expensive neighborhoods, including Tribeca and Soho.
Mr. Sonenberg said that a bunch of different co-ops had banded together to fight the expiration of this particular tax benefit, leaning on representatives to ensure that it is reinstated.
“It will affect these cooperative corporations and frankly all residential buildings, residential landlords,” he said. “People will pay more real estate taxes, bottom line. The city’s argument is ‘we need revenue to pay our teachers, our firemen, etc.’”
A spokesperson for Assembly Speaker Sheldon Silver, Michael Whyland, said in an email that the current bill that contains J-51—it’s A10798, which is before the Assembly Ways and Means Committee—will be passed soon.
“At the end of session we reached an agreement on a comprehensive bill which will cut taxes for the vast majority of condo and co-op owners who pay a disproportionate share of the city’s property tax burden,” Mr. Whyland wrote. “We will pass the bill when we return to Albany later this year.”
Mr. Spinola said that the program is critical and provides incentives for maintaining the quality of the city’s housing stock. It also, he said, is a generator of jobs. “I expect it to be reinstated retroactively,” he said, though he added that he never wants to predict what Albany is going to do.
