But now the city is destroying this vital part of the New York City housing market with unfair assessments of co-op and condo buildings that are driving up property taxes.
Over the last couple of years, some co-ops have seen their values rise dramatically – in one case 147 percent over the previous assessment. While at face value, an increase in a building's worth may seem like a good thing, it's not when that increase means rapidly escalating property taxes.
The Department of Finance recently admitted that it made a mistake with some of the assessments – such as the 147 percent increase - arriving at their figures by comparing some co-op and condo buildings to higher-assessed commercial properties in nearby areas. But even still, some co-ops and condos saw their property values increase by close to 50 percent.
In this decimated housing market, it's hard to fathom that values are rising that fast in about a year's time.
While co-ops and condo buildings look like large apartment buildings, they are essentially a collection of small single-family homes. When property taxes go up, the increase is folded into the maintenance fee, which covers all of the expenses of operating a co-op, divided among the shareholders making the increase less obvious.
And besides, when maintenance goes up because of fees related to property taxes, water rates, or other city services, the ire is most often directed at the Board of Directors, not the city.
Imagine if a single-family home owner received their property tax bill and saw that the city had determined that their home had gone up in value by 50 percent, as well as their taxes accordingly, knowing full well that they couldn't receive the city's assessed value from a buyer if they put it on the open market.
They would be outraged.
However, the city can't raise a single-family home owner's assessed value by 50 percent. That's because it is capped by law at an increase of 6 percent per year.
That's what needs to be done with co-ops and condos. Currently, State Senator Toby Ann Stavisky has a bill in the legislature that would put co-ops and condos on par with single-family homes, capping assessment increases at 6 percent.
Her bill needs to be adopted and signed into law, otherwise a unique aspect of the New York City housing market that has been helping families enjoy the benefits of home ownership since the 1920s could disappear for good.