New York City’s Rent Guidelines Board has approved a rent freeze aligned with Mayor Jumaane Williams Mamdani’s campaign pledge, despite criticism from some board members who viewed the decision as predetermined. Christina Smyth, a member of the board, resigned in response, citing that the freeze was decided during the mayoral campaign rather than through deliberative process.

While the rent freeze aims to shield tenants from immediate increases, a significant pressure point remains unaddressed: rising property tax bills for owners of multi-family apartment buildings, particularly in lower-income areas such as the Bronx and Brooklyn. These owners, many of whom are small landlords, have faced increasing expenses that could influence rent levels or lead to deferred maintenance.

A recent report from New York University’s Furman Center for Real Estate and Urban Policy highlights notable disparities in the city’s property tax structure. The Furman Center’s analysis reveals that owners of multi-family buildings — including co-ops and condominiums — shoulder a disproportionately high share of property taxes compared with owners of one- to three-family homes.

According to the report, the average effective property tax rate, defined as the tax paid as a percentage of a building’s market value, is substantially higher for multi-family buildings. For example, a 40-unit prewar apartment building in the Bronx faces an effective tax rate roughly five times greater than a Brooklyn single-family brownstone — about 3.7% compared with 0.7%. In practical terms, this equates to an annual tax bill of approximately $47,000 for the Bronx building versus $10,000 for the brownstone, despite the latter’s higher market value.

These differences arise from the city’s complex tax system, where residential single-family homes are taxed based on comparable sales prices, while multi-family rental buildings are assessed using income-based methods tied to rental revenue. This disparity contributes to a cumulative tax burden that affects building owners and potentially impacts the housing market.

The report also notes that property tax bills on older multi-family structures continue to climb due to increasing city spending and higher overall tax levies, even if effective tax rates remain constant. The financial pressure placed on small landlords raises concerns about the potential for buildings falling into disrepair as owners grapple with rising taxes alongside maintenance costs.

Advocates argue that a property tax freeze, specifically targeted at older rent-stabilized multi-family buildings, could provide relief to these landlords and help preserve affordable housing stock. Conversely, failure to address this imbalance might lead to greater deferred maintenance or even municipal takeover of properties unable to meet their tax obligations.

Some local officials have called for comprehensive property tax reform. A commission established under former Mayor Bill de Blasio recommended taxing all property uniformly based on market value to create a more equitable system. Brad Lander, current city comptroller and ally of Mayor Mamdani, has endorsed such reform efforts, describing New York’s current system as opaque and inequitable, with negative consequences for working families and housing development amid a persistent housing crisis.

The debate continues as city leaders seek a balance between protecting tenants from rent hikes and providing sustainable support to property owners responsible for much of the city’s affordable housing.