2023 Theses Master's

"Evaluating the “Road to Reform” for New York City’s Property Tax System: Considerations for Single-Unit Residential Properties and Predictive Modeling as Practice for Local Governance"

Lee, Lizzie (Yea Won)

This paper evaluates possible effects of two policy recommendations provided by the New York City Advisory Commission on Property Tax Reform (‘Commission’) in 2021 to find that the Commission’s final findings find that the Commission overly simplify the extreme variance that exists in the New York City residential tax base in ways that distort the potential impacts of their recommendations and could be misleading for stakeholders and decision-makers. Second, the report offers little information that assesses the method and accuracy of their sales-price valuation assessment model. This paper provides exploratory findings from a predictive model that can be used to both understand the how the current assessment model operates, as well as to provide recommendations in utilizing machine learning to supplement local decision-making and innovate for market and socially responsive parameters for the new sales-based market value assessment model.

Finally, based on the findings from this methodology and literature review, this paper provides policy recommendations that will address three relevant issues identified in the current property tax system. Foremost, while the city can and should change the current property assessment model to a sales-based market valuation model, there must be more deliberation for the parameters used for the new model. Second, the current property tax policy environment is inefficient not only at the microeconomic scale expressed in the aforementioned disparities of property tax burden distribution, but also in the scale of municipal and state macroeconomics. Finally, a volatile political environment compromises prospects for a truly comprehensive reform, and any attempts for reform must center the political realities as a fixture of decision-making.