Owners $1.3B behind on property tax payments

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City Comptroller Scott Stringer today reported that, as of February, $1.3 billion in real estate tax payments were overdue – equal to 4.5% of the total $29.6 billion due.

The figure includes payments that were due in January 2021, along with payments outstanding from previous quarters.

Prior to February, the delinquency rate for payments due in
the first half of the tax year (the vast majority of which are due by July 1st)
was 2.7%, already considerably above the FY 2020 figure of 1.8%, as well as the
previous peak of 2.17% in 2011, following the Great Recession of 2008-09. The
Comptroller’s Office expects the final delinquency rate for FY 2021 will be
approximately 3.0%, as late payments reduce outstanding amounts due.

Manhattan, which accounts for 63% of all property taxes due,
had a slightly lower overall delinquency rate of 4.1%, compared to 5.2% for the
remaining four boroughs collectively (Table S.1).

Manhattan’s lower overall rate was driven by lower
delinquency rates for commercial properties (Class 4) as well as for (Class 2)
residential coops, condos and rental buildings.

Citywide, the delinquent amount for commercial properties
totaled $740 million, or just over half of the overall delinquent amount. For
commercial properties, which include offices, stores and hotels, the
delinquency rate was 4.9% in Manhattan versus 7.9% outside Manhattan, although
the total dollar amount outstanding in Manhattan, $484 million, was almost
double the amount delinquent outside Manhattan.

Office buildings, the largest single property type within
the commercial property class, had nearly $260 million dollars of payments
outstanding, for a delinquency rate of 4.1%

As a result of the pandemic’s devastating impact on tourism,
hotel properties had some of the highest rates among all property types.
Overall, the citywide delinquency rate for hotels was nearly 10%. In Brooklyn,
nearly 1 of every 5 dollars due from hotels is unpaid.

Store building delinquencies averaged 5.7% citywide.
Brooklyn again had the highest rate, at 7.1%, further contributing to the
higher overall delinquency rates for commercial properties outside Manhattan.
For all other commercial property types (factories, warehouses, garages and
other uses) the delinquency rate was 6.9%.

Delinquency rates for Class 2 (coops, condos and
multi-family rental buildings) were 4.0%. As with commercial properties, the
rate was also lower in Manhattan compared to the rest of the City, 3.6% vs
4.9%. Manhattan coops condos and rentals account for a greater share of taxes
due, so the overall amount delinquent in Manhattan was almost double that in
the rest of the City. Condominiums had higher delinquency rates than apartments
or coops, since single-owner units are more likely to fall behind in payments
than multi-tenanted buildings. Outside of Manhattan, the Bronx and Brooklyn had
high delinquency rates among smaller walk-up apartment buildings.

Manhattan’s delinquency rate for to 1-3 family homes, at 6.9% was higher than the rest of the City at 4.8%. The overall amount delinquent in Manhattan, however, was relatively small, $15 million compared to $155 million outside Manhattan. These types of homes are far more common outside Manhattan.

SCOTT STRINGER

“The economy remains stuck in the winter doldrums, with small business revenues down and weekly new unemployment claims still high.  Property owners are struggling to make property tax payments,” said Comptroller Stringer.

“But Spring is around the corner, and with it will come
accelerated vaccinations and much-needed federal budget relief.”

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