An artificial intelligence company could soon help determine how much New Yorkers pay in taxes for their condos.
The Department of Finance has partnered with technology firm C3 AI for a six-month pilot program that will explore using AI to calculate the value of the city’s residential condo properties using machine learning along with market and sales data. The pilot will investigate how practical it is to base property tax bills on sales comparisons for condo buildings with more than 10 units, according to a notice published Monday in the city record.
Department of Finance spokeswoman Jackie Gold stressed that the agency would be evaluating only C3 AI’s information and software for appraising condos under the program.
“The pilot will not have an impact on the way that DOF presently values condominiums,” she said.
However, C3 AI’s “approach is considered a more fair and transparent way to assess properties,” and the program could boost property tax revenues if successful, the notice says.
A representative for C3 AI did not respond to a request for comment by press time.
C3 AI’s appraisal platform would allow the city to identify and resolve data discrepancies, appraise several properties simultaneously and identify sites that require additional judgment, according to a promotional video on the company’s website about what it offers its customers. Every appraisal comes with “an evidence package and sales comparables that explain how the AI property value was generated,” it says.
Valuations play a huge role in New York’s notoriously byzantine and controversial property tax system. Although officials tend to undervalue buildings, which leads to a lower tax bill, owners still frequently go to court to challenge their valuations.
The city released its tentative property tax assessment roll for fiscal year 2026 in January, which put the overall market value of the city’s buildings at about $1.6 trillion, up 5.7% year over year. It anticipated a 7.3% increase in the market value for condos, co-ops and rental apartment buildings.
The city record notice describes the AI program as a “demonstration project,” which lets companies use a short-term pilot to show the city the merits of their product. Success can then lead to a longer-term contract.
Mayor Eric Adams’ administration proposed expanding the use of demonstration projects last year as part of an effort to boost a practice known as “challenge-based procurement,” for which private companies rather than government agencies propose solutions to public problems. The goal is to encourage innovation, although detractors argue it gives private firms a way to make themselves the sole providers of important services. It was unclear whether the AI-based condo valuation pilot was connected with this effort.
The value of C3’s contract is just $2, according to the city record notice. Gold confirmed that this was an accurate figure.
Silicon Valley entrepreneur Tom Siebel founded C3 AI in 2009 and serves as the company’s chairman and CEO. The company offers more than 40 AI-based products in industries including financial services, manufacturing and utilities.
The firm saw about $951 million in revenue from 2019 to 2023 and employed 891 full-time workers as of April 30, 2024, according to its website and a recent filing with the Securities and Exchange Commission. Its board of directors includes former Secretary of State Condoleezza Rice, while its advisory board includes former Speaker of the House Kevin McCarthy.
Meanwhile, the organization Tax Equity Now New York is in the middle of a lengthy legal battle seeking to upend New York’s overall property tax system. The group argues that it breaks federal fair housing laws by overtaxing neighborhoods where people of color make up the majority of residents and breaks the state real property tax law by overtaxing rental properties compared to owned homes. The suit dates back to 2017, and the Court of Appeals revived it last year.
