Page 7 - New York Cooperator July 2020

COOPERATOR.COM THE COOPERATOR — JULY 2020 7 to brokers and generates essential revenue for the City of New York to maintain the sal- aries of fi rst responders, fund infrastructure improvements, and provide for public ser- vices like schools, libraries, and parks.” Other fi ndings from the REBNY investment and residential sales report included: • From April 2020 to May 2020, total sales volume declined 26% • From May 2019 to May 2020, total residential sales and transactions declined, re- sulting in a 53% decrease in tax revenue. Th is represents a combined loss of $45 million in tax revenue at the City and State level compared to the previous year. • From May 2019 to May 2020, total investment sales and transactions declined, re- sulting in a 93% decrease in tax revenue. Th is represents a combined loss of more than $100 million in tax revenue at the City and State level. REBNY compiles its Investment and Residential Sales Report every month to track both investment and residential sales transactions in New York City and New York State. According to the organization, “REBNY is tracking all revenue generated by each as- set class and transaction on a monthly basis to quantify the impact of the coronavirus (COVID-19) crisis on the City and the State’s ability to generate taxes needed for essen- tial government services. Th e report is an analysis of offi cial data from the NYC Depart- ment of Finance’s Automated City Register Information System (ACRIS) and captures total sales volume, number of transactions, and tax revenue.” n REAL ESTATE SALES... continued from page 6 mended an elimination of late fees—but only for properties with an assessed value of $250,000 or less, and only for delinquency on the upcoming July 1 payment date if a COVID-19 hardship can be proven. City Comptroller Scott Stringer, characterized by TRD as a mayoral contender for next year, has urged the commission to “use every tool at our disposal to provide compassionate relief.” As the third member of the commission (along with Mayor Bill de Blasio and his appointed fi nance commissioner Jacques Jiha), Stringer appears to be the minority opinion of that body. For his part, de Blasio has been advocating for relief from other sources, acknowledging that the income from city property taxes—and apparently their late fees as well—is needed to keep essential city services running during the crisis. In a dire projection, he says, “Th ere is literally no way we can solve this problem without federal help, or having to make very painful choices.” Even with evidence indicating that delinquency is growing, TRD notes that the commis- sion advised keeping the 18% rate for large properties. And in the absence of the proposed legislation, it suggests that the rate for smaller properties without a COVID-19 hardship should be dropped from 7% to 3.25% for the July payment and to 5% for the other three quarters remaining in the fi scal year. “It is in the city’s best interest to encourage the prompt payment of real estate taxes by all taxpayers,” says the commission. REBNY’s Take Noting the diffi culty that many of its constituents are likely to have in paying their up- coming July 1 tax payments timely and fully, the Real Estate Board of New York (REBNY) has raised the idea of letting owners stretch out payments over time “so there isn’t one big hit in July,” as REBNY president James Whelan says. Alternatively—or additionally—the painfully high 18% rate could be lowered to ac- count for the crisis. “No one is saying the penalty should be waived,” says Paimaan Lodhi, a REBNY senior vice president, “but in this time of crisis, it should be reduced to not further punish those that are experiencing hardship.” Even if it approves rate reductions, the Banking Commission’s proposed rate must fol- low a prescribed formula, according to TRD . It must be at least six percentage points great- er than the prime rate, which was 3.25% on May 12. While the commission therefore could have recommended a rate as low as 9.25% percent, it instead opted to maintain the 18% rate. Such a decision was not well received by REBNY and other industry leaders. Existing Payment Plans According to TRD , for property owners who are delinquent or just don’t want to fall behind, payment plans that run as long as 10 years are available—but interest and any new charges must be paid promptly. Homeowners facing hardships can defer payments in amounts based on the property type: 25% for single-family homeowners and 50% for condominium owners. Th ere are plans for seniors and low-income owners as well. n NYC LEADERS... continued from page 6