By Jo K. Nasoff-Finton
In her May 3 article “NY state gives condo owners millions in property tax breaks; the rest of us pay for it” Michelle Breidenbach focused on unwarranted and costly property tax breaks enjoyed by “patio home” owners in New York. The proliferation of such homes throughout Western New York – and in Amherst in particular – has been going on at least since the early 2000s despite the protests of municipal assessors and organizations such as the New York Conference of Mayors.
The state law governing condominium developments was intended to address the need for affordable (vertical) housing primarily in downstate urban areas. Instead the device has been used by developers in suburban communities to provide well-to-do buyers with tax breaks in exchange for market (or generally above-market) rate housing at the expense of municipalities and the majority of taxpayers.
In condominium developments assessed values are not based on fair market value as they are for all other residential properties but rather on square footage and hypothetical (capped) rental values. By way of example, typical single-family, detached patio homes with condo status in Amherst have assessed values ranging anywhere from 40 percent to 57 percent of fair market value. As a result, such homes and now thousands like them throughout Western New York pay approximately one-half the amount of property and school tax as non-condo homes with the same market value.
Notwithstanding the fact that some patio home/condominium owners pay to maintain private roads within developments, a municipality’s highway tax levy is actually only a small percentage of its total levy. Homes with “condo” status are contributing significantly less for roads throughout the rest of the municipality and for library, school, fire, water, sewers and police, among other services they utilize, than is true for the balance of residential taxpayers. By law, condo developments can be occupied by anyone of any age, so to claim that their occupants are seniors who would otherwise leave the area or who use fewer town services cannot be documented. Not only do condominium patio home developments pay less than their fair share of taxes, they also create unfair competition in the housing market against homes of equal size that pay full taxes.
By approving variances and zoning revisions which allow for higher density single-family residential development on private streets, municipalities themselves have been complicit in the expansion of single-family homes with condo status in spite of the undesirable tax impacts of this trend. More worrisome is that our local state representatives have, to date, shown little interest in fixing the loopholes in the Condominium Act that result in preferential treatment for patio home owners. A review of the extent to which the builders and developers of patio homes in Western New York contribute to the war chests of state representatives may, at least in part, explain that lack of interest.
Jo K. Nasoff-Finton of Getzville is a land use planning and development consultant, a former senior planner for the Town of Amherst and former director of development and deputy director of the Erie County Industrial Development Agency.