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Badillo vague on tax cuts at NYARM Congress lunch.

Referring to remarks made by running mate Rudolf Giuliani, Herman Badillo confessed it was his idea that there should be no increase in property taxes for single family homes to bring them in line with those paid by other property owners, including cooperatots.

Instead, referring to questions from industry representatives and REW, he told the luncheon crowd at the NYARM Real Estate Congress held at the New York Sheraton, "We cannot cut taxes for anyone unless we take steps to downsize city government." This, he believes, should be done in part through privatization of government services.

Badillo was hit by question after question on the tax issue by distressed cooperators and heads of such groups as the Federation of New York Housing Cooperatives and the Action Committee for Reasonable Real Estate Taxes, who could not fathom his stance. Badillo did not respond to a question as to what a Giuliani administration would do if the new Property Tax Reform Commission comes up with recommendations to increase taxes on single family homes.

Council Speaker Peter Vailone, who spoke earlier in the day in a more intimate setting at the Congress said, "I've always believed there should be no difference between a single family home and a co-op." At one point he stated: "The co-ops have to go down to the single family level." When queried on his way out the door as to whether single family property taxes needed to go up, he replied, "They all have to go Up."

Vallone also spoke about the need to meet the needs of the homeless, not only through housing but with medical and social service intervention. "The answer to the homeless is not just providing a place to sleep," he noted.

A real estate tax panel after lunch featured Assemblywoman Catherine T. Nolan from Queens, who explained the process of making tax reforms. She said even if a measure passes the City Council, the Albany lawmakers might not be willing to put themselves on the line for something that increases taxes on small homeowners in their districts. "I'm not convinced the solution is to increase taxes on single family homeowners," she said. "There is potential for not doing anything." On the other hand, she agreed there is a clear awareness that owner occupied buildings need to be factored in.

Martin Karp, president of the Action Committee for Reasonable Property Taxes, which is an Ad Hoc group that formulated a plan together with the Real Estate Board of New York and the Rent Stabilization Association, explained that right now, cooperatives are not worth the sum of their parts. "No bank in the world would give you 80 percent of the market value. They would give you 80 percent of the capitalized rents," he explained.

They would like to see two tax classes - commercial and residential-with all caps on assessment increases removed; a 1:2 tax rate tied in by law so that if commercial goes up, so would residential rates proportionately; circuit breakers for low income individuals, a reasonable phase-in period and taxation at full value. Co-ops and condos would be assessed proportionately as co-ops and condos, and assessed as rental properties for their rental apartments, a change from the current law.

The city currently prints the full market value on the tax bill along with the. assessed valuation, which is then multiplied by a tax rate. The rates would change markedly under the Action Committee scenario, but not necessarily cause any increase in taxes other than the Class One.

The Real Estate Board of New York's Mark Moss explained part of the current tax problem occurred because of the shift of tax burden from homeowners to commercial properties, as well as the rate of growth of the levy.

Other issues

The NYARM Congress focused on a number of other issues, including lead paint, security, cooperative financing, landmarking, Downtown revitalization, the homeless and housing court. Other speakers included Judges Jacqueline Silbermann and Bruce 1. Gold; New York State Assistant Attorney General and head of the Real Estate Financing Division, Gary Connor; Deputy Mayor Barbara Fife; President of Economic Development Corp., Carl Weisbrod; and the Rev. Al Sharpton.

The Rev. Sharpton complained the U.S. "can't be Santa Claus all over the world and a Scrooge at home." He believes more incentives should be given to the private sector to begin building affordable housing. In addition, he hopes private developers will work with the black communities to build housing.

The plight of many New Yorkers was emphasized when an elderly black cooperator complained about a small rent rise in his Mitchell-Lama apartment, at the same time the Housing Court Panel was discussing problems in evicting non-paying tenants.

A panel on security issues drew out many experts including John Laffey, head of Emergency Services; Captain Joseph Martella; Kastle Systems' head, Gene Samburg; and Mickey Schwartz, senior vice president of Park Tower and Triumph Security. While security might cost 75 cents a square-foot in most buildings, the World Trade Center is now paying $12 a square-foot.

Laffey said to prepare your buildings and make sure tenants know what to do. No matter what systems you have in place, he noted, "there is always a human factor."
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Title Annotation:New York, New York Mayoral running mate Herman Badillo discusses property tax reform proposed by Mayoral candidate Rudolph W. Giuliani at New York Real Estate Congress conference
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Oct 20, 1993
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