Tax parity at last for small co-ops, condos.

Paying one's fair share of taxes can be a burden, but paying a lot more than one's fair share is infuriating. In some cases, it can even force people out of their homes. That is exactly the trap some 10,500 property owners have been caught in for the past decade. Thanks to a little-known measure just signed into law by New York State Governor Cuomo, this inequity will now be eliminated.

The New York State Legislature has corrected a problem it created inadvertently. Vague language in the 1981 tax bill excluded some 1,500 of the city's 680,000 buildings with 10 or fewer units from the tax assessment escalation ceilings. If the building was a rental property, as over 99 percent were, it enjoyed a cap on its tax assessments. But if the comparably-sized buildings became co-ops or condos, they were assessed at a vastly higher rate, averaging three times their rental counterparts.

Some co-ops and condo owners have been hit by five- and six- fold hikes in their assessments in the last 11 years, placing their financial viability in jeopardy. Most of these buildings are brownstone or rowhouse properties with few amenities - no doormen, no elevators, no managing agent, no paid superintendent. Default by a single owner can threaten an entire building with financial disaster. Many buildings contain rent-regulated tenants.

This will be remedied by the new law, which will reassess all 2-10 unit co-op and condo buildings for the 1993-194 tax year. The new formula returns to the property's 1981-82 assessment (or, for former commercial properties, to the year of residential conversion for newer co-ops and condos) and restricts subsequent increases to an annual 8 percent or 30 percent over five years.

For one small building co-op owner, Peggy Barnett, the law means that she will not be forced to sell the Flat Iron district apartment she renovated into a work studio and home. Faced with a $12,000 tax bill on her one-floor loft, Ms. Barnett had to fight or sell.

Two years ago she met another distressed co-op dweller, Robert Snyder, at a public meeting on co-op taxation. Together with a co-op attorney, they pulled together a group of co-op and condo owners to constitute the "2-10 Unit Association for Fair Co-op and Condo Taxes". A strictly volunteer, low-budget operation, they rallied more than 200 of the 15002-10 unit buildings to contribute time and money for the effort. They started meeting to strategize a lobbying plan and research the legal issues. Some lobbying occurred in 1991, but their efforts - led by four persons who made repeated trips to Albany - were concentrated this Spring.

Although the group was hampered by nature of being decentralized and small-building dwellers, their strongest asset proved to be the high level of political organization typical of the city's Brownstone neighborhoods: Manhattan's Upper West Side and Lower East Side, and Brooklyn's Park Slope, Brooklyn Heights and Fort Green. Their mailings generated a pool of volunteers with organizing experience. They sought sponsors among legislators of impacted neighborhoods, and found Brooklyn's Senator Christopher Mega and Assemblywoman Eileen Dugan. Assemblyman Sheldon Silver, whose Lower East Side constituency was directly impacted, also played a pivotal role in convincing the Assembly leadership that the bill merited passage.

The city initially opposed the bill because of its negative fiscal impact - the excess assessments generate about $4 million this year. But ultimately the group's efforts were helped by the electoral climate: the bill looks like a reform measure at a time when true tax reform talk is off the agenda. The mayor came to see it as a relatively painless "justice measure" for the middle class, costing a tiny fraction of residential tax revenues.

The "2-10 Committee's" victory is but a wrinkle in the direction of much needed city real estate tax reform creating parity between Class I(one- to three-family homes) and Class II (all other residential properties, including rental buildings and all co-ops and condos). Until they develop a lot more political muscle, the average co-op and condo will continue to pay three times the amount of taxes as the average one- to three-family house.

Perhaps this year's experience can give us optimism about the prospect of eventual reform. The group did not have a lot of money or high-profile leaders. Instead, its victory stemmed from a combination of good organizing skills and political judgment, a strong level of self interest and high community stakes in the stability of our neighborhoods, tenacious resolve, pro-bono professional assistance and some good luck.

Larry McGaughey is a real estate attorney who is a founder and secretary the 2-10 Committee.