The Hoboken Tax Reform Coalition
What is Reform?
In a previous discussion, Joe Brennan referred to a "split" in Reform between those who are satisfied with a government that is not run by crooks, and those who believe that the government should focus like a laser on cutting taxes as quickly and deeply as possible.
In my opinion there is, in fact, a split, but Mr. Brennan has not characterized it correctly.
Mr. Brennan, "overtaxed" and others believe that high taxes and big government are themselves the problem. Mayor Zimmer's job is to tackle the problem directly by cutting the budget and taxes immediately by as much as possible, leaving the government to adjust itself to whatever funding it has left. This is in effect Grover Norquist's "starve the beast" philosophy. It is grounded in the libertarian belief that government has few legitimate public functions and should be made as small as possible.
Mainstream reformers represented by the Mayor, Kids First and their supporters, believe that high taxes are not the problem itself but a severe symptom of the real problem. This group believes that the real problem is not government itself, but bad government characterized by self-dealing, incompetance and lack of accountability.
Those that are happy with Zimmer (and KF) point to the real steps taken to make our government more professional and accountable, like hiring highly qualified directors with no personal or political stake in the pre-existing disfunctional and corrupt system. They believe that if we continue on the path of making our government better, many things, including the quality of our government services, our bloated budget and our high tax rate, will improve dramatically as a result.
It does not appear that the first group has anywhere near the votes to actually elect one of their adherents to office, but they do have the ability to affect elections on the margins and act as "spoilers," a result that would set back their own agenda as well as the agenda of mainstream reform.
In my opinion, that group should continue to aggressively make their voices heard to prevent mainstream reform from taking their votes for granted. In so doing, they will help keep reform focused and help make government better.
But election challenges like Real Results need to be more responsibly and carefully considered based on a dispassionate and realistic assessment of the electorate, and abandoned when they have no real chance of success. The real results of "Real Results" are a powerful indication that the "Hoboken Tea party" plain and simply does not have anywhere near the votes to be anything more than spoilers, and that's not likely to change any time soon.
Mr. Brennan's earlier post contains the observation that had the "old guard" been united RR would have been successful at being "spoilers" and at least some of the "old guard" would have won. He also threatens that if mainsteam reform doesn't toe the line, next time the RR group may succeed - not in getting elected but in sabotaging mainstream reform, causing them to lose or into unhealthy alliances with the "old guard."
He may be right, but its hard to see how anyone interested in good government would view this as a positive accomplishment. We all need to respect and listen to each other and work together to improve our town. If each of us lets our idea of the "perfect" become the enemy of the "good" we'll wind up going back to the bad.
And we've come way too far too let that happen.
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Replies to This Discussion
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Permalink Reply by David on -
I'll bite. I generally consider myself right of center politically but I agree with your definition of reform.
At the local level my focus is on the waste in government. I think 'real' reform isn't about just electing 'good' people who hire 'good' people. The true goal of any reform movement is to ensure there are processes and institutions that make it hard for corrupt practices to occur no matter who is in office. I consider things like pay-to-play legislation and devolving zoning board appointments to the council steps along the right path. I want to see more changes like those.
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Permalink Reply by robert randall on
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David - I agree that reform requires more than hiring good people, and didn't mean to imply that was all there was to it. The reference to the directors was just one example. I didn't provide more examples like the zoning board change or the inclusive process used to select a BA because I didn't want my central point to be drowned out by a pro or con discussion of everything that has occurred since the Mayor took office.
My point was that her lack of success in lowering taxes so far is not, for most mainsteam reformers, an indication that she is not implementing the promised reforms. Mainstream reformers evaluate the Mayor based on precisely the kind of things you describe - not only is she hiring good people but is she changing our institutions in ways that will excise the bad practices that have led us to where we are, so that good government can become the rule not the exception?
Those who believe that the primary mission of reform is to lower taxes as deeply and quickly as possible are entitled to their opinions, and I respect their right to make that case. But they should recognize that this is not the view that has traditionally galvanized Hoboken's reform movement, and it is not the view held by the vast majority of Hobokenites who consider themselves reformers.
Instead of threatening to torpedo the ship, the "lower taxes first" group should engage mainstream reform in an honest and respectful conversation about our differences in approach. Such a discussion is the best way of helping to advance both the goal of good government reform and the goal of lower taxes.
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Permalink Reply by Joe Brennan on
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You can as easily turn around the 'spoilers' label, to say that 'good govt but high taxes' style reform will spoil itself if it doesn't focus more on lowering taxes. The impatience with high taxes, whether or not 'good people' are in office is going to grow, not shrink if taxes don't go down. Whatever other achievements the Zimmer admin/council majority can present or claim within a couple of years, if they haven't lowered taxes substantially it will be *they* who are creating the split in the coalition which elected them, not those who demand lower taxes being 'spoilers'.
Dishonesty is one reason for the very high taxes in Hoboken, but it's not the only one or even necessarily the main one. Take for example, very high public safety department's compensation and what many would view as top heavy management structures. There's nothing inherently corrupt about that, though it surely delivers less services per dollar than it might. But it's not just a matter of putting the right people in charge, but being willing to fight the (figuratively) bloody political battles to get those compensation packages and management structures in line with best practice. I don't think anybody believes that can be done quickly and easily, there's a host of legal constraints. The issue, to me, is the 'high tax reformers' willingness to stick with that when the going gets tough, ratther than just start calling the 'low tax' reformers 'spoilers', and then turn to the votes of portions of the status quo to sustain themselves at the polls. That's what I saw worrying signs of in the KF/RR contest. A lot of the pro-KF posts on this 'tax revolt' forum had a distinctly Hoboken 'status quo' sound, to my ears.
Or, another example would be dealing with the scope of public housing and rent control in Hoboken, which absolutely also contributes to the very high tax rates for the 'market' properties. Again it's not corrupt or self-dealing to have so many public and rent controlled units that don't pay their share of taxes. There has obviously been insider self dealing, as to for example who gets to live in certain tax abated properties despite high incomes. But that's not the fundamental issue from a tax perspective. Having stricter income limits would be fairer perhaps, but would do nothing to lower taxes. That can only be done, insofar as these properties are concerned, by transitioning them, or at least some of them, to market rents so they can bear market tax rates. The implementation is about figuring a humane way, also in compliance with all law and state or federal govt mandates, to bring that about over a reasonable period of time. This is again not a matter of just 'the right people in charge' but what their policies are. Reasonable people can disagree whether Hoboken has too many properties that aren't taxed, but those who think not must admit they are for higher taxes at the margin when it comes to this major reason why taxes are so high. They can't just claim they have a smarter better way to deal with it where everybody wins.
And, it's not cast in stone that one position on such issues will always be the minority among those inclined toward reform. Perhaps many taxpayers just don't fully realize yet how little scope there is for real tax reduction with the 'right people in charge' but with lots of the sacred cows left alone, or challenged pretty lightly (highly paid municipal workers, very high spending per pupil in schools, large numbers of buildings paying hardly any property tax). I don't know how Mayor Zimmer and her allies will carry out their duties in the next few years, but I still believe the bottom line must be much lower taxes, or the 'rebellion' within reform will get a lot larger than what we saw with RR campaign.
Joe
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Permalink Reply by Jack Dawkins on
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Have to chime in here - the VAST majority of buildings not paying their "fair share" of property taxes are new, luxury PILOTed properties (see the W Hotel for the worst offender.) Those PILOTed properties, when they are rental properties, do not have any rent control and a quick google search reveals circumstances where tenants had multiple rent increases in one year, and huge rent increases when they didn't have multiple increases, with rents jumping from 2K-3K/mo. on 30 days notice. This, of course, creates a transient population - that often doesn't vote - fertile ground for government corruption to find it's way back into office. The real reason for our high taxes is the developer community that raped the taxpayer and a corrupt government who took their "cut" from the developer bounty.
(sorry to go off topic, but I had to correct what, in my view, was complete MIS-information)
With that said, I think the subject article has a lot of truth in it.
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Permalink Reply by robert randall on
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I agree with Jack that the unhealthy way we have subsidized development, together with the fact that we we have misused the supposed "windfalls" these developments have provided to expand the patronage mill, is the principle reason for our high taxes.
Personnel costs must be addressed in a serious way, since they represent the vast majority of our operating budget and there simply isn't enough to cut anywhere else. But we shouldn't cut personnel because we need to cut taxes, we should cut personel because it will give us a better more efficient and cost effective government. We need to adjust our work force to address top heaviness and cut personnel to the extent that our staffing levels are unnecessary for the efficient delivery of city services. This might sound like a mere semantic difference, but I think it goes to the substance of my disagreement with Joe. At the end of the day we likely wind up in the same place, but our differences in philosophy make it hard to communicate if we don't listen carefully to each other and maintain an open mind.
I'm not sure about Joe's point about rent control being a tax issue, since I don't know how rental properties are appraised for property tax purposes. If the appraisals are based on rent rolls, then he is right that rent control results in higher taxes for the rest of us. If it is not, then this is a false issue and while rent control may or may not be a good idea, it has nothing to do with our property taxes. If anybody knows the answer, please chime in.
This is the kind of discussion we should be having rather than issuing threats and ultimatums that serve only to empower the enemies of reform.
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Permalink Reply by Jack Dawkins on
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Thanks for your thoughtful comments, Robert. I'm not an accountant and only have limited information on how buildings are taxed - so take this with a grain of salt. Property is appraised based on it's value, this includes location, size, quality. Some things that add value are outdoor space, private parking, updated kitchens, extra bathrooms. It's reasonable to presume that a low rent roll, in some limited measure, holds down the value of a property (I say in limited measure, because I read the real estate listings and quite frankly, many rental properties list high - so where is the decreased value?) Also, not all rent controlled units have low rents, so in that case the rent roll could not lower the value. It's a common "talking point" that rent controlled buildings pay lower taxes - I'd like to see proof of this, maybe someone will site something on this board. Condos do appear to pay higher taxes per square foot than some other property types, including single family houses. I've been told this is because a four story/four condo building collectively will, most likely, have more bathrooms and more kitchens than a 4 story single family house. Features such as bathrooms and kitchens add to the value of the propetry as a whole. Even if, however, condos bring in more revenue to the city because they are generally taxed higher, and a small rental property with a low rent roll brings in slightly less, I don't think that is a good reason to end rent control any more than it's an argument to demand that all single family houses be converted to condos in order that the property tax generated to the city be increased.
robert randall said:I agree with Jack that the unhealthy way we have subsidized development, together with the fact that we we have misused the supposed "windfalls" these developments have provided to expand the patronage mill, is the principle reason for our high taxes.
Personnel costs must be addressed in a serious way, since they represent the vast majority of our operating budget and there simply isn't enough to cut anywhere else. But we shouldn't cut personnel because we need to cut taxes, we should cut personel because it will give us a better more efficient and cost effective government. We need to adjust our work force to address top heaviness and cut personnel to the extent that our staffing levels are unnecessary for the efficient delivery of city services. This might sound like a mere semantic difference, but I think it goes to the substance of my disagreement with Joe. At the end of the day we likely wind up in the same place, but our differences in philosophy make it hard to communicate if we don't listen carefully to each other and maintain an open mind.
I'm not sure about Joe's point about rent control being a tax issue, since I don't know how rental properties are appraised for property tax purposes. If the appraisals are based on rent rolls, then he is right that rent control results in higher taxes for the rest of us. If it is not, then this is a false issue and while rent control may or may not be a good idea, it has nothing to do with our property taxes. If anybody knows the answer, please chime in.
This is the kind of discussion we should be having rather than issuing threats and ultimatums that serve only to empower the enemies of reform.
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Permalink Reply by robert randall on
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Jack - your reply illustrates my overall point beautifully. If tax cutting is our highest priority, then it may be reasonable to argue that the mere fact that rent control costs the city tax revenue may be sufficient reason to eliminate it. But if other priorities are considered, like the desire to maintain a diverse and affordable community, and are weighed against the actual (not perceived) loss of revenue, many people who also want lower taxes may consider the trade-off appropriate.
That is why it is important to have an honest discussion over differing perceptions of what government should or should not do, since that is the true fault line between the RR and Zimmer/KF factions.
In terms of actual policy choices, the two groups agree far more than they disagree, and that's why its such a shame that instead of a honest reasoned conversation about issues, we sometimes wind up threatening each other and calling each other names. Enlightened self interest requires the two groups to be allies, and the political reality is that the Zimmer/KF faction is the only vehicle through which change can realistically occur.
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Permalink Reply by khoboken on
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Rental property, be it commercial, retail, industrial or residential, is assessed and pays taxes based upon its income stream. Plain and simple. While there are some variations that can be argued over "highest and best use", it is gerneally accepted that the rent roll drives the tax roll. The less rent that is paid, the less taxes generated. Many books have been writtten about the devastating affect that rent control had on the housing stock of NYC, especially the Bronx.
To put into perspective, if you have two identical buildings, both in Hoboken, located sided by side, with the same number of apartments, same layouts, same amenities, and one is subject to rent control and the other is not, the rent control building will be assessed at a lower value and pay less in taxes. The market rate building will pay more.
Rent contrrol is basically a subsidy by the property owners of the town to pay a disproportionate tax burden in order to provide affordable housing, in theory. The problem in practcie is that there are no income criteria for who gets the benefit of the subsidy. Nor is there any limit on ownerhsip of another residence by a well off resident of a rent controlled apartment. Imagine having a tenant actually live in a nice condo in Ft Lauderdale, Flordia and still claim the rent controlled apartment as their residence so their grand kids have a place to party and hang in Hoboken. I am not sure that is why properpty owners agreed to take on a bigger tax burden. Bitter experience is a cruel teacher.
Jack Dawkins said:Thanks for your thoughtful comments, Robert. I'm not an accountant and only have limited information on how buildings are taxed - so take this with a grain of salt. Property is appraised based on it's value, this includes location, size, quality. Some things that add value are outdoor space, private parking, updated kitchens, extra bathrooms. It's reasonable to presume that a low rent roll, in some limited measure, holds down the value of a property (I say in limited measure, because I read the real estate listings and quite frankly, many rental properties list high - so where is the decreased value?) Also, not all rent controlled units have low rents, so in that case the rent roll could not lower the value. It's a common "talking point" that rent controlled buildings pay lower taxes - I'd like to see proof of this, maybe someone will site something on this board. Condos do appear to pay higher taxes per square foot than some other property types, including single family houses. I've been told this is because a four story/four condo building collectively will, most likely, have more bathrooms and more kitchens than a 4 story single family house. Features such as bathrooms and kitchens add to the value of the propetry as a whole. Even if, however, condos bring in more revenue to the city because they are generally taxed higher, and a small rental property with a low rent roll brings in slightly less, I don't think that is a good reason to end rent control any more than it's an argument to demand that all single family houses be converted to condos in order that the property tax generated to the city be increased.
robert randall said:I agree with Jack that the unhealthy way we have subsidized development, together with the fact that we we have misused the supposed "windfalls" these developments have provided to expand the patronage mill, is the principle reason for our high taxes.
Personnel costs must be addressed in a serious way, since they represent the vast majority of our operating budget and there simply isn't enough to cut anywhere else. But we shouldn't cut personnel because we need to cut taxes, we should cut personel because it will give us a better more efficient and cost effective government. We need to adjust our work force to address top heaviness and cut personnel to the extent that our staffing levels are unnecessary for the efficient delivery of city services. This might sound like a mere semantic difference, but I think it goes to the substance of my disagreement with Joe. At the end of the day we likely wind up in the same place, but our differences in philosophy make it hard to communicate if we don't listen carefully to each other and maintain an open mind.
I'm not sure about Joe's point about rent control being a tax issue, since I don't know how rental properties are appraised for property tax purposes. If the appraisals are based on rent rolls, then he is right that rent control results in higher taxes for the rest of us. If it is not, then this is a false issue and while rent control may or may not be a good idea, it has nothing to do with our property taxes. If anybody knows the answer, please chime in.
This is the kind of discussion we should be having rather than issuing threats and ultimatums that serve only to empower the enemies of reform.
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Permalink Reply by Jack Dawkins on
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KHoboken: I'm sure you could well guess that I completely disagree with you. And tossing out the comment about "highest & best" use, tips your hold card. Most people in Hoboken would probably disagree that "highest" has much, if anything, to do with "best" --- that is, most except real estate & developer interests....just ask the people who live in the skyline
With that said, out of respect for the person who started the thread on the topic of "what is reform?" and not rent control, I won't comment any further on this thread about rent control.
khoboken said:Rental property, be it commercial, retail, industrial or residential, is assessed and pays taxes based upon its income stream. Plain and simple. While there are some variations that can be argued over "highest and best use", it is gerneally accepted that the rent roll drives the tax roll. The less rent that is paid, the less taxes generated. Many books have been writtten about the devastating affect that rent control had on the housing stock of NYC, especially the Bronx.
To put into perspective, if you have two identical buildings, both in Hoboken, located sided by side, with the same number of apartments, same layouts, same amenities, and one is subject to rent control and the other is not, the rent control building will be assessed at a lower value and pay less in taxes. The market rate building will pay more.
Rent contrrol is basically a subsidy by the property owners of the town to pay a disproportionate tax burden in order to provide affordable housing, in theory. The problem in practcie is that there are no income criteria for who gets the benefit of the subsidy. Nor is there any limit on ownerhsip of another residence by a well off resident of a rent controlled apartment. Imagine having a tenant actually live in a nice condo in Ft Lauderdale, Flordia and still claim the rent controlled apartment as their residence so their grand kids have a place to party and hang in Hoboken. I am not sure that is why properpty owners agreed to take on a bigger tax burden. Bitter experience is a cruel teacher.
Jack Dawkins said:Thanks for your thoughtful comments, Robert. I'm not an accountant and only have limited information on how buildings are taxed - so take this with a grain of salt. Property is appraised based on it's value, this includes location, size, quality. Some things that add value are outdoor space, private parking, updated kitchens, extra bathrooms. It's reasonable to presume that a low rent roll, in some limited measure, holds down the value of a property (I say in limited measure, because I read the real estate listings and quite frankly, many rental properties list high - so where is the decreased value?) Also, not all rent controlled units have low rents, so in that case the rent roll could not lower the value. It's a common "talking point" that rent controlled buildings pay lower taxes - I'd like to see proof of this, maybe someone will site something on this board. Condos do appear to pay higher taxes per square foot than some other property types, including single family houses. I've been told this is because a four story/four condo building collectively will, most likely, have more bathrooms and more kitchens than a 4 story single family house. Features such as bathrooms and kitchens add to the value of the propetry as a whole. Even if, however, condos bring in more revenue to the city because they are generally taxed higher, and a small rental property with a low rent roll brings in slightly less, I don't think that is a good reason to end rent control any more than it's an argument to demand that all single family houses be converted to condos in order that the property tax generated to the city be increased.
robert randall said:I agree with Jack that the unhealthy way we have subsidized development, together with the fact that we we have misused the supposed "windfalls" these developments have provided to expand the patronage mill, is the principle reason for our high taxes.
Personnel costs must be addressed in a serious way, since they represent the vast majority of our operating budget and there simply isn't enough to cut anywhere else. But we shouldn't cut personnel because we need to cut taxes, we should cut personel because it will give us a better more efficient and cost effective government. We need to adjust our work force to address top heaviness and cut personnel to the extent that our staffing levels are unnecessary for the efficient delivery of city services. This might sound like a mere semantic difference, but I think it goes to the substance of my disagreement with Joe. At the end of the day we likely wind up in the same place, but our differences in philosophy make it hard to communicate if we don't listen carefully to each other and maintain an open mind.
I'm not sure about Joe's point about rent control being a tax issue, since I don't know how rental properties are appraised for property tax purposes. If the appraisals are based on rent rolls, then he is right that rent control results in higher taxes for the rest of us. If it is not, then this is a false issue and while rent control may or may not be a good idea, it has nothing to do with our property taxes. If anybody knows the answer, please chime in.
This is the kind of discussion we should be having rather than issuing threats and ultimatums that serve only to empower the enemies of reform.
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Permalink Reply by khoboken on
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Mr. Dawkins
No need to be snarky. Your post indicated that you did not have knowledge on how rent control affects taxes or how buildings are assessed. I do not have any "hold" cards - and I do not have a disagreement with rent control in theory - I just have a problem with it in application. Same way with Pilots. I think both are fundamentally sound in theory, but thier application is subject to abuse - in both cases, the ones left holding the bag in terms of subsidy is the average homeowner who does not have the time or money or political clout to get in on "the deal". If you live in a rent controlled unit - good for you. You are not paying your fair share of taxes IF you earn enough to pay market rent for the unit. You are asking me to subsidize your lifestyle. Just be intellectually honest about it. This is no different than the ridiculous Pilot application in Jersey City for a Hilton Hotel and Luxury condos in Liberty Harbor. Why? There already is a track record for development and hotels in downtown JC. Why should the average taxpayer subsidize the developer of that project? Both rent control and Pilots as applied today in Hudson County are part of the tax problem for the average home owner.
Jack Dawkins said:KHoboken: I'm sure you could well guess that I completely disagree with you. And tossing out the comment about "highest & best" use, tips your hold card. Most people in Hoboken would probably disagree that "highest" has much, if anything, to do with "best" --- that is, most except real estate & developer interests....just ask the people who live in the skyline
With that said, out of respect for the person who started the thread on the topic of "what is reform?" and not rent control, I won't comment any further on this thread about rent control.
khoboken said:Rental property, be it commercial, retail, industrial or residential, is assessed and pays taxes based upon its income stream. Plain and simple. While there are some variations that can be argued over "highest and best use", it is gerneally accepted that the rent roll drives the tax roll. The less rent that is paid, the less taxes generated. Many books have been writtten about the devastating affect that rent control had on the housing stock of NYC, especially the Bronx.
To put into perspective, if you have two identical buildings, both in Hoboken, located sided by side, with the same number of apartments, same layouts, same amenities, and one is subject to rent control and the other is not, the rent control building will be assessed at a lower value and pay less in taxes. The market rate building will pay more.
Rent contrrol is basically a subsidy by the property owners of the town to pay a disproportionate tax burden in order to provide affordable housing, in theory. The problem in practcie is that there are no income criteria for who gets the benefit of the subsidy. Nor is there any limit on ownerhsip of another residence by a well off resident of a rent controlled apartment. Imagine having a tenant actually live in a nice condo in Ft Lauderdale, Flordia and still claim the rent controlled apartment as their residence so their grand kids have a place to party and hang in Hoboken. I am not sure that is why properpty owners agreed to take on a bigger tax burden. Bitter experience is a cruel teacher.
Jack Dawkins said:Thanks for your thoughtful comments, Robert. I'm not an accountant and only have limited information on how buildings are taxed - so take this with a grain of salt. Property is appraised based on it's value, this includes location, size, quality. Some things that add value are outdoor space, private parking, updated kitchens, extra bathrooms. It's reasonable to presume that a low rent roll, in some limited measure, holds down the value of a property (I say in limited measure, because I read the real estate listings and quite frankly, many rental properties list high - so where is the decreased value?) Also, not all rent controlled units have low rents, so in that case the rent roll could not lower the value. It's a common "talking point" that rent controlled buildings pay lower taxes - I'd like to see proof of this, maybe someone will site something on this board. Condos do appear to pay higher taxes per square foot than some other property types, including single family houses. I've been told this is because a four story/four condo building collectively will, most likely, have more bathrooms and more kitchens than a 4 story single family house. Features such as bathrooms and kitchens add to the value of the propetry as a whole. Even if, however, condos bring in more revenue to the city because they are generally taxed higher, and a small rental property with a low rent roll brings in slightly less, I don't think that is a good reason to end rent control any more than it's an argument to demand that all single family houses be converted to condos in order that the property tax generated to the city be increased.
robert randall said:I agree with Jack that the unhealthy way we have subsidized development, together with the fact that we we have misused the supposed "windfalls" these developments have provided to expand the patronage mill, is the principle reason for our high taxes.
Personnel costs must be addressed in a serious way, since they represent the vast majority of our operating budget and there simply isn't enough to cut anywhere else. But we shouldn't cut personnel because we need to cut taxes, we should cut personel because it will give us a better more efficient and cost effective government. We need to adjust our work force to address top heaviness and cut personnel to the extent that our staffing levels are unnecessary for the efficient delivery of city services. This might sound like a mere semantic difference, but I think it goes to the substance of my disagreement with Joe. At the end of the day we likely wind up in the same place, but our differences in philosophy make it hard to communicate if we don't listen carefully to each other and maintain an open mind.
I'm not sure about Joe's point about rent control being a tax issue, since I don't know how rental properties are appraised for property tax purposes. If the appraisals are based on rent rolls, then he is right that rent control results in higher taxes for the rest of us. If it is not, then this is a false issue and while rent control may or may not be a good idea, it has nothing to do with our property taxes. If anybody knows the answer, please chime in.
This is the kind of discussion we should be having rather than issuing threats and ultimatums that serve only to empower the enemies of reform.
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Permalink Reply by robert randall on
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Khoboken - thanks for the information. I have a few questions you may be able to shed light on.
Are rental properties assessed at a simple multiple of rent roll? Or is it a more complicated calculation as Jack indicated, with rent roll an important factor but not the only one? If it is one of several factors then the increase in assessed value resulting from the elimination of rent control may be relatively small.
How often are rental properties reassessed? Does the tax assessment automatically go up as the rent roll rises? Or are they re-assessed only when a reval is done like non-rental properties?
I don't know the history of rent control in Hoboken, but in New York I the property owners who "agreed" to be rent controlled are often not the current owners, but the developers who received generous subidies in exchange for that agreement. Subsequent purchasers bought the property already subject to rent control, for a purchase price that reflected the limitations on rent. That is why many believe that the elimination of rent control would result in an unearned "windfall" to property owners.
With respect to property taxes, if the elimination of rent control would result in an immediate jump in the assessed value of the property to a new substantially higher value, then the taxpayers would share in the windfall. Does anybody know if that is the case?
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Permalink Reply by robert randall on
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Jack - I agree that the rent control discussion is a tangent and we should return this discussion to the topic of exploring the different philosophies that divide reform and figuring out how best to move forward on our points of agreement. I think the discussion on rent control is healthy, though it belongs in another thread. We need to openly and amicably discuss both our points of agreement and our points of disagreement, and sometimes agree to disagree.
We can't let our points of disagreement stop us from working together to achieve the many things that virtually all reformers agree upon.
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