Revenue losses by Condominium Law 339-y

[Lee Chowaniec]

The Lancaster Town Board approved a site plan revision resolution that allows the construction of another 200 townhomes in the Pleasant Meadows Subdivision VIII - Central Square Villas. The writer took no exception to the resolution or construction of the dwellings, but asked whether the units would be receiving Condominium Law 339-y consideration – 35-40% assessment reduction.

It was answered that the developer had already requested such considered from the NYS Attorney General’s Office and was given approval.

The writer then asked on the price of the units and Councilman Mark Aquino answered that he believed they were in the low $200,000 range.

Chowaniec: What I will present to you is similar to what I presented to the school board. In Lancaster we presently have 480 HOA’s that do not receive Condo 339-y assessment reductions; 35-40% tax breaks. There are 420 Home Association dwellings (patio or townhomes) that do receive 339-y consideration. That number is growing rapidly as 40-50% of new construction is for this type of dwelling – seven on tonight’s permit agenda.

If we were to consider $225,000 as an average cost for such dwelling in Lancaster, and that is on the conservative side, and that dwelling received a 40% assessment reduction ($90,000), that dwelling would now be assessed at $135,000. Considering the total town/county/school tax rate is near $31 per thousand of assessed property valuation, that homeowner is receiving an annual $2,760 tax break. That break pays for more than what that HOA is paying for services not provided by the town. In fact, it covers their entire Association fee; and more. I know because I reside in a HOA.

Considering the present 420 HOA units now receiving 339-y consideration, $1.17 million is being lost in town/county/school revenues (420 x $2,760). Adding another 200 homes to the mix brings another $558,000 in lost revenues for a total of $1.73 million in lost revenues through tax breaks.

Of that $1.73 million in tax breaks, the town loses 620 x 90 x 7.9 (tax rate) = $440,820.

Of that $1.73 million in tax breaks, the county loses 620 x 90 x 5.18 (tax rate) = $289,044.

I can understand the town and county revenue loss because HOA’S provide for services not provided by the town – although the tax break is far above the service cost provided by the HOA. I know what we spend for such services in my association and we don’t get the 40% tax break.

Of that $1.73 million in tax breaks, 620 x 90 x 16.045 (tax rate) = $892,000 in school revenue lost. Councilman Abraham, as a school teacher, you should be aware that the school district is currently losing $600,000 per year in revenue because of Condominium Law 339-y. I can understand some town and county tax break consideration based on services not provided, but I fail to understand the school district tax break inclusion.

I bring this up tonight because I fail to see the synergy between the town and school district to work together on like issues. In the past all we heard was the town take the position we will take care of town business and it is up to the school district to handle their own issues. It is my belief that both entities have an obligation to work together to prevent revenue loss; for the best interests of the taxpayer. We hear all the time that we need to level the playing field; that everyone needs to pay their fair share. People are not paying their fair share here.

For years there was talk about several senators attempting to put a bill on the floor to stop the perversion of a law whose original intent was deal with high rise apartments in New York City. No bill ever came to the floor.

Does this matter ever come up when board members attend Association of Towns meetings?

Supervisor Fudoli: It has not been a topic of discussion since I came on the board last year.

Chowaniec; I just don’t see any fiery spirit out there to address this perversion. When developers use the mantra that patio and townhome owners deserve school tax breaks because the population purchasing such units are empty nesters and have no children attending school, my response is that the same situation occurs in a lot of other communities where empty nesters live; or in fact where families/individuals never having children pay full taxes.

Supervisor Fudoli: Commercial properties still pay school taxes as well.

Council member Donna Stempniak: The town did at one time did approve a resolution to oppose this tax break. The City of New York obviously loves this; a law that was intended for high-rise owner occupied apartments. It is not liked outside of New York City.

Councilman John Abraham: We did sponsor a resolution that requested municipalities have the option of opting out of the 339-y. It went nowhere. It made sense to us and a lot of state legislators but never got to the floor as a bill.

Chowaniec: I remember that resolution very well. The school district is going to have a difficult budget process this year. Mr. Abraham think of how many teacher positions that $600,000 could retain.

Stempniak: When yours and my mother’s townhome development was built, developers didn’t know about this loophole. Since then they use it freely. We have appealed to the Attorney General’s Office without success in requesting to opt out.

Chowaniec: The pressure has to continue!

Comment

Condominium Law339-y was established near 30 years ago to provide tax breaks for New York City apartment owners who lived in high rise complexes four or more stories in height. Over the years, the law has been perverted by developers and legislators that allows for single-family patio homes and two-story townhouses to receive like consideration as long as they apply before units are marketed or sold.

There assessment is based on income valuation on comparable rentals. The Town Assessor has no control on who qualifies for the New York State exemption but is looking at an alternate way of taxing such units to level the playing field; to provide a tax break that covers the association costs for services not provided by the municipality only.

[joe d.]

If the Condo law bothers you so much,while living in condo exempt association, and you advocate the end of this law.... why havent you paid the additional 40% of taxes as a donation to the town every year?
BTW...I bet your neighbors love you when you stand for taking even more money out of their wallets. I too, live in a HOA, ALL the infrastructure,sewer, water storm drains, street cleaning , plowing,street lighting, including the installation costs of the poles , including liability insurance are and were paid for ..not by the Town, but by the residents of the HOA, so why shouldnt we be entitled to some cost relief!! There are strict standards residents must abide by to maintain their homes with an effective enforcement policy, unlike that of so many municipal housing court timetables that allow properties to continue to deteriorate and affecting the value of adjoining properties. HOA owners are confident in that their elected board members that also residents in the HOA and have a vested interest in maintaining the value and integrity of their properties .
There is much to be said for living in a structured living style/HOA, and many reasons why much of the tax discount we enjoy, are legitimate entitlements!

[gorja]

If the Condo law bothers you so much,while living in condo exempt association, and you advocate the end of this law.... why havent you paid the additional 40% of taxes as a donation to the town every year?
BTW...I bet your neighbors love you when you stand for taking even more money out of their wallets. I too, live in a HOA, ALL the infrastructure,sewer, water storm drains, street cleaning , plowing,street lighting, including the installation costs of the poles , including liability insurance are and were paid for ..not by the Town, but by the residents of the HOA, so why shouldnt we be entitled to some cost relief!! There are strict standards residents must abide by to maintain their homes with an effective enforcement policy, unlike that of so many municipal housing court timetables that allow properties to continue to deteriorate and affecting the value of adjoining properties. HOA owners are confident in that their elected board members that also residents in the HOA and have a vested interest in maintaining the value and integrity of their properties .
There is much to be said for living in a structured living style/HOA, and many reasons why much of the tax discount we enjoy, are legitimate entitlements!

Lee does not live in a condo exempt association. He pays full market value taxes. NO condo break. THose tax breaks are unfair to the rest of the taxpayers who may have a carbon copy home in non-exempt association.
I do agree to a tax break equal to the value of the costs assocaiated to the services not provided by the town.

[Lee Chowaniec]

Lee does not live in a condo exempt association. He pays full market value taxes. NO condo break. THose tax breaks are unfair to the rest of the taxpayers who may have a carbon copy home in non-exempt association.
I do agree to a tax break equal to the value of the costs assocaiated to the services not provided by the town.

Thanks Gorga. Joe d. must have misread the post as I clearly stated I do not receive 339-y consideration. He also seems to miss the point that I agree HOA unit owners should get a tax break for an amount that covers the costs of services not provided by the town. However a 40% tax break is way out of line and over the years I have been told the same by builders and realtors alike - of course off the record.

What is disturbing to me is the school district tax break that comes along with 339-y. The reasoning for it is illogical and should be excluded. But joe d. has nothing to worry about. Nothing will change. No one in the Legislature is pushing to have a bill put on either the Senate or Assembly floor. The Builder Association lobbyists would cut their campaign funds in a heartbeat. The status quo will continue as long as upstate municipalites and school districts continue to be silent on the matter.

[4248]

Joed stated :
"I too, live in a HOA, ALL the infrastructure,sewer, water storm drains, street cleaning , plowing,street lighting, including the installation costs of the poles , including liability insurance are and were paid for ..not by the Town, but by the residents of the HOA, so why shouldnt we be entitled to some cost relief!!"

I live in a house in Lancaster - so do many others - we paid for all the things you listed with our taxes - we pay full market value tax - people on my street get no Town Provided services - don't we deserve some cost relief?????????

[WNYresident]

Thanks Gorga. Joe d. must have misread the post as I clearly stated I do not receive 339-y consideration. He also seems to miss the point that I agree HOA unit owners should get a tax break for an amount that covers the costs of services not provided by the town. However a 40% tax break is way out of line and over the years I have been told the same by builders and realtors alike - of course off the record.

What is disturbing to me is the school district tax break that comes along with 339-y. The reasoning for it is illogical and should be excluded. But joe d. has nothing to worry about. Nothing will change. No one in the Legislature is pushing to have a bill put on either the Senate or Assembly floor. The Builder Association lobbyists would cut their campaign funds in a heartbeat. The status quo will continue as long as upstate municipalites and school districts continue to be silent on the matter.

No.

Why do you get to use different people for services already offered by the town while other residents can't opt out?

[gorja]

http://open.nysenate.gov/legislation/bill/S1000-2013

[Lee Chowaniec]

http://open.nysenate.gov/legislation/bill/S1000-2013

I have not had contact with Senator Little for years, do know she has presented like bills numerous times and that they have never gotten to the floor.

It is imperative that municipalities and school districts contact their legislative representatives and encourage them to get this bill to the floor for a vote. It is time for this loophole to be closed.