Maintenance Increases

I was actually wondering if assessed values would start coming down. I believe it is on a 5 year sliding scale. But assessments seem to only go up. Now property values are lower to much lower, will assessments go down or is that a pipe dream? If they go down, will rates go up to compensate? It's crazy that as the parts value goes down, the sum of the parts goes up.

i guess i would say that it sucks but its not crazy. those taxes are paying for a bunch of things that are unlikely to go down. so if overall assessed value goes down, then the taxes per assessed value have to go up.

to otnyc: just out of curiousity, how do you fight an increase? either the expenses are legitimate (i.e. fundamentally non discretionary) in which case, what can you do or they are silly like redoing the lobby?

It stinks to see the same size condo around the corner paying 1/3 of the property taxes.

isn't there a grievance process in manhattan?

From what I understand, the city basically decides how broke it is and then charges what is called a "mill rate" against the assessed value of the building. The assessed values are a joke (our building on the UWS with 40+ units is assessed at $3.95M) and they may go down, but it doesn't really matter. The mill rate can be adjusted by the city at any time for the subsequent year. During good years, the rate goes down and the tax bill goes down, during bad years, the city makes up for the shortfall by raising the mill rate. Crazy, right?

Most buildings file a grievance as part of their standard annual process (managing agents take care of this), so they are already paying as little as they can.

As far as fighting an increase, not everyone on the board sees eye to eye. Tax rates are up close to 10% but the impact on the building is about 3% (taxes account for about 30% of building spend). Some members want a steep maintenance increase to manage potential future shortfalls, others want to keep the increase more reasonable and in line with known and expected increases.

The last few years have been pretty tough to stomach in terms of taxes and utilities. There have been huge increases in water bills, The price of oil and natural gas...not to mention Con Ed specific charges have gotten out of control. Add that to any taxes that have been added in recent months- and it could be rather ugly. The answer for the original poster might depend on how the board handled these large increase in expenses in the last few years.

"isn't there a grievance process in manhattan?"

there are a number of firms who do Real Estate Tax certiorari work. They usually take a percentage of the reduction they get for you. but it's a cat and mouse game, because whatever decrease they get you, the assessor just jacks back up the next year and the certiorari firm goes in and gets it reduced again and......

putting off the inevitable (raising maintenance) only ends up in bigger pain later when you have to hit the shareholders with a BIG increase all in one shot. And you've lost out on the extra revenue in the interim.

At this rate the city will force lots of buildings to become insolvent.

i think many of these buildings have a long way to go before they reach insolvency. one of the things that relatively smaller buildings may have to face is the need to reconsider the level and type of service that they offer. if you think maintenance costs create friction amongst shareholders, wait till you try to explain that you can no longer afford 3x a day garbage pickup and that you may have to lost a shift at the door.