Reassessment tutorial

[Lee Chowaniec]

https://buffalonews.com/section/opinion/editorials/

It’s a charade. Residents should demand accurate assessment, which can be achieved only through regular updates. That’s the only way to ensure that everyone pays his fair share and, in particular, that low-income residents aren’t overtaxed.

Spot on!

Lancaster is in the midst of conducting a property reassessment with the final roll due out in June of 2020. Lancaster’s level of assessment now stands at 77% of market value.

Reassessments are not politically favored. Lancaster’s town board voted unanimously to conduct the current project. It does level the playing field. It has been 10 years.

It is unfortunate that the Town of Lancaster Assessor has no control over the outrageous 50-60 assessment reductions patio and townhome HOA’S are receiving through Condominium Law 339-y. Tax reductions that off-times exceed the homeowner’s entire Association fee.

[grump]

Lee, reassessments aren’t favored by politicians because the more confused and confusing the real property tax system is, the less time people spend on the real cause of tax hikes, the continuing increases in tax levies by town boards. If they can use the intricacies of the system to pit neighbor against neighbor they’ll do it every time. That way they avoid facing a unified tax payer group insistent on real tax relief. And don’t underestimate the role of the public employee unions in agitating against reval efforts because they benefit from the confusion. I understand your concern over 339-y but please understand the focusing on these types of issues plays right into the hands of the elected officials because it pits taxpayer against taxpayer. In the case of 339-y the divisions caused by it are even more senseless because unlike, reassessment or the levy, it is totally out of the control of local governments.

[Lee Chowaniec]

Lee, reassessments aren’t favored by politicians because the more confused and confusing the real property tax system is, the less time people spend on the real cause of tax hikes, the continuing increases in tax levies by town boards. If they can use the intricacies of the system to pit neighbor against neighbor they’ll do it every time. That way they avoid facing a unified tax payer group insistent on real tax relief. And don’t underestimate the role of the public employee unions in agitating against reval efforts because they benefit from the confusion. I understand your concern over 339-y but please understand the focusing on these types of issues plays right into the hands of the elected officials because it pits taxpayer against taxpayer. In the case of 339-y the divisions caused by it are even more senseless because unlike, reassessment or the levy, it is totally out of the control of local governments.

If we believe in that statement, fair means HOA’S receiving Condominium Law 339-y assessment reductions of 50% -60% are not being taxed accurately. I well understand that such communities should be compensated for the costs of the services not provided by the town. They are being compensated off-times by reductions that cover their entire association fee. That loss of revenue to the town is made up by others who are paying full taxes.

Two years ago, when Lancaster’s assessor approached the town on doing a reassessment, our level of assessment at the time was 92%. The board agreed to pursue the program. The level (equalization rate dropped to the eighties the following year and has dropped again to 77.

I have met several assessors from other towns and not one favored the state’s 339-y program. Our town, as well as other municipalities, have petitioned Albany to end the program.

Last year, the Democratic State Assembly approved a bill that would allow municipalities to determine how they wanted to run the program in 2021.

The Democrats claimed the bill would be introduced into the Senate for approval if they became the majority in 2019 Hello, still waiting!

Condominium Law 339-y was intended to cover high rise buildings in New York City. Developers bastardized the program and got the state to go along. It’s a developers / builder’s scam to appeal to buyers and today is being advertised in most HOA development ads as a selling tool.

Patio and Townhomes that are selling for $300,000 and getting 50% assessment reductions are saving at least $4,500 in reduced tax bills; $375 per month. Do you believe that the cost for the services not provided by the town runs $375? Or are taxpayers helping pay for their entire association fee, and then some?

[grump]

Lee, 339-y might have been enacted with high rise condo’s in mind but is there something in writing to show that? I don’t doubt it but I just don’t know. I’m not sure whether it was specifically meant for NYC. If that were the case it could’ve been limited to cities in NYS with population of over a million. I think that’s how the state typically words laws when they want to limit the effect only to NYC. I could be wrong but I think there could be constitutional problems depending on the manner in which the state might delegate the power to run the program. Tax laws are supposed to be applied uniformly according to their terms. Giving locals too much unfettered discretion might be a problem. Unfortunately, the term “condominium” applies to a type of ownership and not to a building style. Developers didn’t bastardize the program, they simply found a way of using it that at least some people didn’t anticipate. I don’t like paying higher taxes any more than you do but I find it hard to blame people for being clever enough to take advantage of the wording of a law. Assessors are entitled to their opinion just like the rest of us but their opinion on this issue means no more to me than anyone else’s just because of their status. People like to trot out $300,000 units to show the unfairness of the program. Seems to me that Amherst’s former supervisor, Satish Mohan, tried to turn this issue into an attack on the “rich and privileged” and he was going to put an end to it. As I remember he was rather surprised at the next town board meeting when the room was full of middle and lower income types who pointed out rather noisily that, were it not for the condo exemption, they might not be able to live in Amherst. Not everyone who benefits from this is a wealthy retiree seeking to shirk tax responsibility. There are other exemptions in the law that distort the distribution of the tax burden. If we want to revisit all of them that’s fine with me. But I’m always troubled by attacks on some provision on the tax law based solely on whose ox is getting gored. This raises the whole issue of using tax law to do social policy instead of simply raising revenue for the support of government, which is the only appropriate use of tax law when it comes right down to it.

[Lee Chowaniec]

Grump, there are endless reports on why and how Condominium Law 339-y came into existence and how builders took it outside NYC to private dwellings with HOA’S, resulting tax benefits and a way for developers to maximize profits.

It would be disastrous to entirely eliminate the benefit homeowners receive through the state Condo Law policy. At the same time where assessments are supposed to level the playing field how is it fair when taxpayers are paying for HOA services that go beyond the cost of services not provided by the town. In fact, in today’s market most patio and townhomes receive tax breaks that far exceed their HOA fees. Is that fair. Developers and builders of HOA units make it a point to focus on ‘HOA consideration’ in their media ads. 40-50% of Lancaster’s development today encompass these sales.

Municipalities and their Assessor have memorialized Albany to change the system to no avail. They are well aware of the unfairness and loss in tax revenue.

Tax breaks should be based solely on costs of services not provided by the town – not as a lure to buy more house or get internal HOA fees paid.

[grump]

Lee, a dwelling in a condo, whether high rise or patio home, is a private dwelling. There is only a loss of tax revenue if one can prove definitively that a development of some sort that would’ve yielded more tax would’ve been built in any event without the “benefit” of condo assessment rules. Otherwise talk of lost revenue is just speculation. It’s possible that people would pay more taxes without the condos, even with their reduced assessment. If the incremental additional cost of town services to the condos is less than the incremental taxes contributed by the condos then other tax payers are actually better off.

[Lee Chowaniec]

Lee, a dwelling in a condo, whether high rise or patio home, is a private dwelling. There is only a loss of tax revenue if one can prove definitively that a development of some sort that would’ve yielded more tax would’ve been built in any event without the “benefit” of condo assessment rules. Otherwise talk of lost revenue is just speculation. It’s possible that people would pay more taxes without the condos, even with their reduced assessment. If the incremental additional cost of town services to the condos is less than the incremental taxes contributed by the condos then other tax payers are actually better off.

Grump, I understand what you are saying. However, today’s assessment is based on a property’s market value. Amount of land, house size, frontage do not enter the taxation formula.

Many Assessors who rail about 339-y tax reduction inequity use the example of two like builds of equal market value in the same subdivision – off-times across the street from each other. Let’s say they both have a $300,000 market value. The patio / townhome in the HOA immediately gets a 50% in assessment and will pay half the tax amount in taxes.

The HOA dweller will have to pay an Association fee towards maintaining his complex and pay for services that are not provided by the town. The HOA homeowner should expect to receive consideration for the costs associated with not having those town provided services. With a 50% assessment reduction the homeowner here is paying $4,500 less in taxes - $375 per month which I am sure covers his entire Association fee, and then some. Is that fair to the homeowner across the street, or to taxpayers in general?

Reassessments are all about fairness, right? Leveling the playing field. Fairness is in the eye of the beholder.

Is it fair that a patio home on Harris Hill was purchased for $1.2 million and will be paying on an assessment of $675,000?

Is it fair for a homeowner to pay $10,000 in taxes per year and not get anything more in services than a property owner paying $3,000 in taxes?

The town’s new refuse policy is that you pay for the amount of garbage you create. That sounds fair, doesn’t it? Unfortunately, not to many who still prefer a policy that is no longer in effect in most Erie County municipalities.

[Lee Chowaniec]

Buffalo News Editorial

Mandate fairness

To avoid uneven tax increases, Albany must require accurate assessments
Patricia A. Skowron wasn’t the only one confused. Anyone dealing with tax bills and equalization rates would be. There’s a solution and it runs through Albany.

Skowron’s bill from the Iroquois School District was a horse pill: Her taxes had risen by $660, even as those at a nearby house of similar value went up less than $100. That disparity is a flashing signal of a skewed and unfair system.

Skowron’s circumstance is not uncommon. It happens when taxing districts cross municipal boundaries, when revaluations are not regularly conducted and property assessments reflect less than 100% of market value.

The Iroquois School Board had projected a districtwide tax increase of 2.77%, but the district covers six towns and, within them, the impact varied wildly, with increases ranging from 1.4% in Elma to 9.2% in Aurora to 17.8% in Lancaster. Skowron lives in Lancaster.

The percentage difference is based on several factors, including the equalization rate, which is the state’s method of measuring the level of assessment, or the value of homes, in a particular municipality.

The mere existence of the equalization rate underscores why revaluations are necessary, even if they are politically unpopular with some residents who mistakenly believe they will automatically push their taxes higher. Revaluation simply ensures that the tax burden is distributed equitably.

Take, for example, the nearby house from Skowron’s. Its full market value is similar to her home, but its taxes are rising only about $70. That house is in the Town of Elma, where the tax rate increased approximately 1.4%.

Why? For one thing, the assessments are out of date, as each town’s equalization rate documents: Elma’s 2019 equalization rate is 4.10 while Lancaster’s is 77. What that means is that, in both towns, total market value is greater than their assessed value. In Elma, the assessed value is 4.1 percent of market value.

The only way to get accurate numbers is to conduct a revaluation, just as the City of Buffalo is currently undergoing. Then, those numbers have to be kept current – at 100% of market value. That’s the way to make fair comparisons and guard against shocks such as the one administered to Skowron. It can happen in any school district whose boundaries bleed into multiple municipalities.

But if regularly updated assessments are necessary for fairness, they are not required and most municipalities are loath to undertake them. Elma hasn’t been reassessed since the 1960s, according to Cheektowaga Supervisor Diane Benczkowski, and Lancaster not since 2009. The town just cancelled a scheduled reassessment.

It’s a guarantee of unfairness, as Skowron has learned in about as painful a way as possible. And it’s avoidable. Since municipalities can’t be counted upon to keep their property assessments current and accurate, Albany should pass legislation to require it.

[gorja]

I agree with the reporter. What they did in Cheektowaga was totally unfair reassessing some properties 2 years in a row
and no reassessment at all for other properties. Then say, let's cancel the total town reassessment