This Is Not in Praise of Taxes and Regulation.

Massey-Knakal Realty Services chairman Robert Knakal has an idea to reduce real estate taxes:  change the way you bill your tenants.

Writing for the Commercial Observer today, Knakal, fresh off of celebrating his firm's 25th birthday last week, says that awareness of the tax would create political resistance amongst renters, and political pressure on their

"Real estate taxes and rent regulation laws both threaten the health of our housing market," he writes.

He suggests that property owner organizations should work on their constituents to present bills that segregate rent costs and taxes, which would change the dynamics between the real estate industry and politicians. 

Knakal uses a couple of vivid examples. He writes, "if someone’s rent is $3,000 per month, the rent bill would indicate that the rent is $2,200 and the 'real estate tax payment' the tenant is paying is $800, for a total of $3,000."  He also contrasts disparate tax costs between renters, condo and co-op owners, and single-family townhouse owners, to illustrate his costs.

Having stated that rent regulation makes no sense, Knakal concludes,

To the extent nonregulated tenants got upset about how much they pay in real estate taxes, it could create enough political pressure to make significant changes to the system. If that doesn’t happen, it will be the same old thing that, under the new administration, could get much worse for the long-term best interest of our housing market.

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