How Property Tax Exemptions Work in New York

Originally written in 2017.

I was leaving Andy’s yesterday after recording the podcast and ended up walking behind 3 children of privilege having a conversation with a middle aged real estate agent about buying property in Bushwick. The kids were all around my age, 2 girls and a guy, and they dressed in the chic European style of Williamsburg. The young dude had a beard, a grey suit jacket, and expensive jeans. One of the girls wore a light black leather jacket and while smoking an American spirit she asked the real estate agent to explain to her what he means when he says “exemptions.”

The agent tells her exemptions are taxes back from the government, which is true. Having worked in real estate for a short time I did learn a bit about the labyrinthine system of property tax exemptions and abatements offered by NYC and NY State. There are the usual well meaning ones for senior citizens and the disabled, which of course rely on means testing and leave many unfortunate people stuck in a beuaracratic nightmare of sending paperwork into a black box and waiting months to receive a response if one is ever received. But there are also those exemptions that have become far more sinister and that reflect the endemic corruption of our government in Albany.

There’s the J-51, the 420c, 421a, 421b, 421g, or maybe he just meant the coop and condo tax abatement. It’s an alphabet soup of programs and tax breaks for owners and developers, many of which on their face promise to encourage the creation of affordable housing but which in actual fact devote little to tracking that their stated goals are being met. They exist because they provide tax breaks to people who own property in the most expensive place to own property in the world. Safe behind a confusing and complicated system the government distributes tax money to those wealthy people who can lobby, donate, and directly influence to get it.

Another thing I got used to working in real estate is that landlords in Brooklyn (most of whom are hassidic) won’t rent to people on section 8. This is illegal and I even reported a landlord at one point but nothing came of it. I stopped posting ads for low rent apartments because I would get calls from people on section 8 and landlords expected my company to give those people the run around. When I brought a senior agent a section 8 client I was explicitly told to “get rid of them.” The calls I did receive broke my heart. I still remember the desperation in a woman’s voice as she told me about her kids and that she didn’t know where to go, how she was going to keep a roof over their head. I wished her luck and told her I’d get back to her if I had anything, knowing I never would. The system teaches you to suppress your humanity.

As the real estate agent talked and explained exemptions to the group he rhetorically asked “why would you want the government making money off your money?” Left unsaid or unconsidered by anyone present is what state and local governments do with the money they collect off property taxes from the well to do. They fund schools, they fund government housing, they pay for community services, they clean streets, they remove graffiti, they do a hundred other things to make neighborhoods livable and try to provide a future to the children who grow up in them. By asking that question the agent flatters the ego of those listening. The money belongs to them, they earned it through their birth and nobody has a right to take it from them. There is no room for community in this discussion.

When the girl’s question is answered the young bearded dude, who I would assume is her boyfriend, slaps her ass and she giggles. Innocuous enough but I got a real game of thrones vibe from the whole thing. We like to think we’ve gotten rid of monarchy in America but as I watched these young royalty stroll the streets that they would soon own I asked myself what difference there was between monarchy and those who become our masters through the lottery of birthright?

Listening to them I knew they’d never spent time in places like the Bronx or East New York or if they had they probably justified to themselves that the people in those places did something to deserve their situation or that their situation was unavoidable and unconnected to the tax exemptions being discussed. I doubt they’ll ever actually talk to anyone suffering from housing insecurity. Maybe they’ll hear stories one day on a PBS documentary and briefly think “how terrible” before they return to their wine and brie as though the whole thing was just an awful dream. I discretely snapped a picture of them for my own memory but I’m not going to post it. They’re not villains, they’re just products of a system that needs to change.