Chair Lee on rent-stabilized property assessments and capitalization rate changes

And then moving on to the block-by-block housing plan and assessments.

The administration's block-by-block housing plan says DOF recognized that 2019 changes to rent stabilization laws changed the economics of rent-stabilized properties.

So in 2016, it made changes to the capitalization rates used in their valuation, reducing the property taxes of 15,000 properties by 1.3%.

So why did it take so long for DOF to reflect the economics of these buildings changed?

And the change, because the change to the law was made in 2019.

So just wondering.

You know, why the gap?

Yeah, so DOF does share the concern over properly valuing these mostly rent regulated units.

So yes, the laws did change in 2019.

But the market factors that influence this take a little bit of time to be reflected.

And evaluations need to reflect actual changes rather than projections, right?

So that's a little bit of that.

The assessment process also has a built-in lag a little bit to give property owners sufficient time to provide their required documents.

And so DOS valuations, as an example for FY27 that we used, these income and expense reports for this FY27, were actually for the calendar year 2024.

Which we actually received in 25, right?

So it does take a little bit of time.

So there's a lag in the reporting system, and there is a little bit of market factors we have to sort of encapsulate.

But with that said, for the fiscal year 27 assessment, we did actually make a few changes.

One of those changes was to increase the capitalization rate by 50 basis points.

And this higher capitalization rate just reduces the market value of the building.

I'm happy to have our first deputy commissioner at any additional.

Notes if there's any

No additional notes unless you have further questions, Chair.