YPFI: $300K townhome owner property tax bill is $469
Rochester, N.Y. - Think of this the next time you pay your property tax bill.
Some homeowners and owners of high-end rental properties are paying just five percent of what they should owe. Some will never pay on the full value of their home.
For example: a three bedroom, two bath townhome on North Plymouth Avenue sold new for $302,000 in 2013. The property tax bill paid this year: $469 and change.
"The crazy thing about this is there are houses in the worse section of our city paying more taxes than that," said Alex White, who lives in the City of Rochester and owns property there.
A home on Herald Street, by contrast, has 1/10 of the townhome's assessed value. Yet the owner of the $30,000 home had a tax bill $170 dollars higher.
The North Plymouth townhome is owned by Deputy Mayor Len Redon. Yet the tax break has nothing to do with his position. The new-build falls under the Downtown Urban Residential Program.
Buyers of these and other luxury homes get ten years of tax abatements.
"It's front-loaded. The first year he pays nothing, then it phases in," said White. "So if the owner sells the property, the tax breaks will start all over again for the new owner."
White, who is running for City Council, downloaded the entire residential property tax base for the City of Rochester and helped 13WHAM News crunch the numbers.
White said homeowners in neighborhoods who have seen the value of their properties plummet are, in many cases, paying more in taxes than the new lofts and condos they could never afford downtown.
White said what he calls 'property tax welfare' also extends to landlords of large rental units.
Riverview Apartments on South Plymouth Ave should be paying $502,000 based on assessments. Instead the tax bill is $4,087. Erie Harbor Apartments on Mount Hope Ave paid $78,000 in property taxes when the full tax bill on assessed value equaled more than $337,000.
Mayor Lovely Warren, a council member in 2012, said she voted against the Downtown Urban Tax Program.
"Having represented the poorest district in the city, I didn't feel comfortable supporting that type of program when I know many of my neighbors did not have that same benefit," Warren said.
Warren said many of the abatements are handed out through COMIDA, which is administrated by Monroe County. White points out that the city abatements have to be approved by council first.
13WHAM News reached out to Rich Tyson, who owns several properties in the city and sells many city homes to first-time buyers. He said this creates a divide between those who invest in their properties and neighborhoods, only to have their taxes subsidize others.
"When they see incentives or tax abatements going on for units they probably can't afford, it's like why not give these incentives to people already making a commitment to their neighborhood," he said.
And there's another cost.
White estimates in 2012, it totaled $35 million in lost tax revenue the city could have used for other programs. He estimates that number this year is closer to $50 million.
"There are single buildings in which the tax breaks are greater than the cost of preschool for three year olds would be," White said.