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Editorials
After several years of pressure put on Albany by municipalities, their town clerks and the public to reform NYS Real Property Law 581 and 339-y, and with the recent draft by Senator William Stachowski that would allow municipalities the right to opt out of 339-y consideration, builders and realtors met with the aforementioned to seek compromise.
How can anyone rationalize town officials sitting at a table with parties perverting the NYS Condominium Law and agree to reach compromise on a matter that is in truth illegal and adversely impacts the community as a whole?
However, such meeting did occur this week and the compromise sought should result in nothing less than a concept that brings assessment fairness and equity to all taxpayers.
Builders and realtors who have used 339-y over the years as a marketing ploy have been hammered by municipalities and the public to the point that even they have to agree the tax breaks are out of line and contravenes any attempt made by towns to establish a “fair and equitable” assessment roll.
The Buffalo News reported on Thursday that Dan Locche, a government affairs director for the Buffalo Niagara Association of Realtors, declared that there is a need for compromise.
Representatives of the Buffalo Niagara Builders Association also agreed to bring back a list of compromise suggestions including those mentioned at Wednesday’s meeting – such as to determine services that patio home owners pay for privately versus those they use publicly, assessing at full market value but giving limited tax exemptions and the creation of a special town fee specific to patio homes.
Condominium Law
NYS Real Property Law 581 and 339-y requires condominiums to be assessed at value substantially less than comparable non-condominium properties. Subverting this law has become commonplace throughout the state and disrupts the desire and credibility of local officials to deliver a fair property assessment.
The Condominium Law's original intent was to give property tax relief to high-rise buildings four or more stories in height, where land ownership was absent and common walls were the norm.
I have yet to speak to anyone that can give a rational answer on how 339-y status can be granted for patio home ownership when unit condominium deeds are prefaced on no land ownership, yet the footprint of the patio home sits on land.
Stand-alone homes that look identical to single-family homes, but which form associations and apply for 339-y status are currently required to be assessed as income-producing properties. As a result, the derived values bear no relationship to the properties market value and condominium homeowners receive 40-50 percent tax breaks.
A slippery slope marketing tool, whose prospectus is readily approved by the State Attorney General’s office, 339-y creates a competitive disadvantage to builders who choose not apply for the status and to current property owners having like structures but lacking 339-y status
Compromise on this matter is especially disturbing to those living in like associations paying full town property taxes and association fees as well to maintain their roads, infrastructure, energy, snowplowing and for other private services.
Towns in Erie County years ago (1996 for Lancaster) knew the revenue impacts that would result from giving such consideration to like established associations and instated a “no conversion” ordinance.
What’s fair?
It is not comforting to hear dialogue is taking place between municipalities, assessors, realtors and builders on how to reach compromise on a subject that adversely impacts the community as a whole but favors only the condominium homeowner.
NYS Senator William Stachowski was at the meeting and informed the group that he would continue to work to get the bill he drafted passed that would allow towns to opt out of giving 339-y consideration to new projects. That would put an end to the perversion of 339-y, grandfather homes already receiving tax breaks but do nothing for past like associations that provide their own private services and still pay full property and school taxes.
What seems fair is the concept to assess all properties at market value, determine what percentage of the association fees are paid strictly for services not provided by the town and to exempt that percentage amount from town tax liability.
As for school taxes, there should be no tax reduction. The argument made by builders that the patio homes are being purchased by empty nesters or young professionals who want that type of lifestyle and do not have children attending school is ludicrous. The same can be said for those who are not condominium 339-y dwellers.
As someone who lives in a townhouse complex and pays association fees for private services and full town taxes as well, I have always favored stopping the condominium 339-y tax break incentive (for developments that do not meet the intent of the law) before it came into Lancaster.
Unfair competition
Until recently, Lancaster was not faced with the impacts associated with 339-y. Well its here, thanks especially to Marrano Marc/Equity. And now it seems assured that this developer will be seeking such consideration for the Pleasant Meadows townhouse development.
The Parkhaven patio development is a testament to the unfair competition fostered by condominium status. Parkhaven was unable to sell patio homes because prospective buyers were flocking to Pleasant Meadows to get the tax breaks.
Already marketing and building several patio homes, but unable to sell them because of the tax breaks Pleasant Meadows was offering prospective homebuyers, Parkhaven Development decided to dissolve its original prospectus and association status and refile for condominium 339-y status.
No problem said the State Attorney General’s office. 339-y approval was granted.
As the law now stands, why would builders not seek to get 339-y approval to beat the competition, or at least compete on a level playing field.
More importantly, why would prospective homebuyers not consider buying such homes for the tax breaks?
What does seem fair
What is especially disturbing is that the tax breaks received by 339-y cooperative or condominium owners often far exceed their total association fee. As such, many of us taxpayers are not only paying more in taxes to offset their tax breaks, but also for the maintenance of their homes, their lawn cutting, insurance, amenities, etc., and then some.
A Lancaster patio homeowner owning a $225,000 home pays only $4,100 in taxes with 339-y status. A homeowner having the exact same single-family home pays full taxes of $6,750. The patio homeowner’s $262 monthly tax break savings more than offset his association fees.
As one of the options stated in the News report, it would be fair to exempt a percentage of tax liability based on association fees paid to provide services not provided by the town. It would be even fairer to allow past and future development associations that are not blanketed by 339-y the same exempt consideration.
Such exemption action would eliminate the handling of the grandfathering problem, reduce the amount of illicit tax breaks those already receiving 339-y consideration receive, incorporate all past and present developments that pay for services not provided by the town and would be the only true solution for leveling the playing field for promoting fair and equitable assessments.
© Copyright 2008 by Speakupwny.com
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