Assessments are up across town, but taxes may not be

The Enterprise — Elizabeth Floyd Mair 
Consultant Andrew Farbstein, left, and Assessor Karen Van Wagenen pause for a photo in a conference room at the town hall where they meet with town residents and share chocolate candies. Residents can informally challenge their tentative assessments through the end of March. 

GUILDERLAND — Town-wide property revaluation — undertaken 10 months ago for the first time since 2005 — has now reached the point where residents and businesses are being informed of their tentative full-market values.

New values, along with several comparable properties used to determine those values, were recently sent out through postal mail as well as electronic mail, said Karen Van Wagenen, the town’s assessor.

Notices were sent to 12,803 properties, said consultant Andrew Farbstein of Industrial & Utility Valuation Consultants, a firm hired by the town to help with the revaluation.

Van Wagenen gave a breakdown of Guilderland’s 12,803 properties, although she said there is overlap among these categories — an agricultural property, for instance, could have multiple houses on it — so these figures do not total 12,803. There are 10,826 houses, 415 commercial properties, 111 agricultural properties, 331 not-for-profits, 886 pieces of vacant land, and 4 industrial properties.

Residents with properties raised in value more than about 40 or 42 percent over last year will see an increase in their tax bills, said Van Wagenen and Farbstein. Residents whose property value has increased less than 40 percent will see a decrease in their tax bills, the two said.

This figure represents the difference between the 2018 total taxable assessed value in the town of about $3.1 billion and the value for 2019, of about $4.47 billion, which is a change of 42 percent, said Farbstein. This percentage remains tentative, he said, because some property owners who challenge their assessed values may see those values lowered.

The formula for calculating the percentage of change: Subtract the old assessment from the new; divide by the old assessment; and multiply by 100.

Until 2005, the town had conducted revaluations every four or five years. James Gazzale, a spokesman for the Office of Real Property Tax Services, told The Enterprise earlier that the office encourages municipalities to conduct frequent reassessments, although he declined to say how often that should be.

A year earlier, the former spokesman for the same office said that national and international standards call for “full review once every six years.”

People who live within the town of Guilderland but in school districts other than Guilderland’s saw their taxes rise significantly when the state-set equalization rate for the town dropped in 2017 from 88 to 76 percent.

This rate is meant to equalize taxes among municipalities so that, for example, if someone owns a house worth $100,000 in the city of Albany, that person will pay the same amount of county taxes as a person who owns a $100,000 house in Guilderland.

Albany recently competed a citywide revaluation, so the assessed value of a property matches the full-market value. In Guilderland, a house with a full-market value of $100,000 would have had an assessed value of $88,000 in 2016 and an assessed value of $75,580 in 2017. In 2019, it will have an assessed value of $100,000.

One result of the town’s failure to conduct a revaluation was that properties that had not been on the market for many years tended to be undervalued and their owners often paid less in taxes than a neighbor’s house that had changed hands more recently.

“Some properties in town were undervalued and being subsidized by everybody else. And that had to be corrected, and the only way we could do it was a full revaluation,” said Van Wagenen.

Inventory verification forms

Inventory verification forms were used to learn as much as possible about properties in Guilderland before issuing a tentative assessment, said Van Wagenen.

The town has not gone out to people's homes with a measuring tape for decades, she said.  The last time that town officials did that was in 1980. “We’ve relied primarily on building permits all these years,” said Van Wagenen.

“People are very private nowadays,” said Farbstein.

Inventory verification forms tell residents what the town has on record as the characteristics of a property, including the size of the lot, dimensions of the property, type of water and sewer, number of bedrooms and bathrooms, type of basement, whether there is a finished basement, whether the home uses solar energy and what kind, any outbuildings, and any improvements made.

The property owner then makes changes and corrections, or simply signs the form, and sends it back.

If a homeowner, for instance, tells the town that, no, he does not have a garage, the town then checks it in several ways, using Multiple Listing Service, a real-estate property list, if possible; satellite images, “and Wayne,” Van Wagenen said.

She was referring to Wayne Miller, a residential appraiser hired by the town to look at sales.

In order to clarify discrepancies, the assessor’s office often calls homeowners to ask questions.

Both Van Wagenen and Farbstein were surprised by what Van Wagenen called “huge participation beyond our expectations.”

Farbstein said that, when he has worked with other municipalities on revaluations — most recently, he worked with East Greenbush and the city of Albany — it has been common to get 20 percent of the forms back.

In Guilderland, he said, town officials received almost 60 percent back, which he called “a shocking number.”

In cases in which the information that comes in on a verification form, for instance, does not match what the town has on file in terms of building permits, town officials may look at satellite images of the property.

In that case, Van Wagenen and Farbstein said, they would also call to try to verify the inventory.

How values are set

“Basically, we’re coming up with brand-new values for all of them,” said Farbstein of properties in town. “Quite a few of them are going up significantly. We’re not aiming at increasing them, but it’s just working out that way, because that’s where the numbers are now.”

They do not look at the previous assessment, and move the number up or down, Van Wagenen and Farbstein said. “You don’t want to be tainted by a previous number from old assessments,” Farbstein explained. “You do it from scratch, basically.”

When a revaluation hasn’t been performed in years, Farbstein said there will always be properties that were undervalued or overvalued. The revaluation is “meant to capture changes over time,” he said, adding that property values are always evolving.

He gave the example of a street that formerly had no private water. When a sewer line is put in, that increases the value of homes on the street. Likewise, a piece of vacant land that formerly had a certain value might have a lower value if a landfill goes in nearby.

In coming up with the new values, the town looked at sales of comparable properties between January 2014 through August 2018, for the most part.

Property sales used as comparables numbered about 1,840 or 1,850.

In doing the revaluation, Van Wagenen said, they are tasked with not looking at the old assessment numbers, “because the only thing that matters is what is now.”

The computer analyzes all of the 25 or so values that the town has for a particular property — building size, lot size, number of bathrooms and bedrooms, types of utilities, year built, grade of property, and many other values — and comes up with the closest comparables, Farbstein said. It doesn’t take into account just one variable but weighs all, he said.

“This doesn’t mean people can’t bring in other comps that they think are better,” Farbstein said. “If we were sure that everything we were saying was right, why would be meeting with people?”

Challenges

Property owners can, until the end of this month, do an informal challenge of their tentative valuation.

Property owners who make appointments to come to the town hall and meet with the assessor’s staff will have 10 to 15 minutes to indicate why they believe they should have a lower assessment, and to provide “any associated proof they may have,” Farbstein said.

The information may also be sent in. “We have a lot of Florida snowbirds I’ve been talking to,” Farbstein said, “who are not here but wish to have their properties reviewed, so they do the same process, just not in person.”

The town “wants to give everyone an opportunity, whether they’re local or not,” he said.

Homeowners can come in and suggest, for instance, why they think that the comparables are misleading, and why different ones should have been chosen. People come in with all kinds of different evidence, Farbstein said: Some bring spreadsheets, others photographs of comparables, or MLS sheets. All are accepted and considered, he said.

These informal conference precede the challenges made on the state-set Grievance Day, the fourth Tuesday in May.

Both Farbstein and Van Wagenen emphasized that they believe it benefits property owners to choose the informal challenge going on now, rather than wait for the formal grievance process on May 28, for two reasons.

One is that Van Wagenen and Farbstein are able to give each property owner 10 or 15 minutes to explain why they think the numbers should be changed, while the Board of Assessment Review, which would usually grant each person about 10 minutes, may need to shorten that time, depending on how many people turn up.

The other reason is, they said, that it is easier to convince one or two people of an argument than to convince an entire board.

Property owners who have made an informal challenge will receive a letter at the end of April, with the town’s decision. When decisions to change assessments affect other properties as well, those property owners may also get letters at the end of April.

“If we find there’s a neighborhood that needs some adjusting, we’ll change that and send letters,” Van Wagenen said.

The state requires tentative assessment rolls by May 1. Van Wagenen said that the rolls will take a few days longer than that to be posted online but that they will be printed out and available on the counter at the assessor’s office in Town Hall by that date.

People wishing to formally grieve their assessments must have their materials to the town’s Board of Assessment Review by 8 p.m. on Tuesday, May 28, Van Wagenen said.

Property owners wishing to do a formal challenge on Grievance Day must have all their paperwork in to the board by 8 p.m. on May 28 at the latest, Van Wagenen said. People who submit paperwork earlier than May 28 may make an appointment for a specific time on Grievance Day.

Those who come in without an appointment on May 28 will be heard, but they will need to wait until all those with appointments are finished, which could be several hours.

Two grievance boards — double the usual — will be hearing from property owners, said Van Wagenen, to be able to accommodate people more quickly. Both will be set up in the town board room in the town hall.

The town will set aside the next day as well, May 29, to handle any additional grievances that may arise. Last year, the town set aside an additional day as well, and it “turned out we didn’t really need the extra day for grievance, so the grievance committee used it for their deliberation,” said Van Wagenen.

The May 29 date is for overflow from the day before; residents cannot walk in on that day with their paperwork and be heard.

Owners of one-, two-, or three-family, owner-occupied houses qualify for a small-claims assessment review, or SCAR hearing, if they are still not satisfied after this point, said Farbstein.

Owners of corporations can also do a tax certiorari process, as can homeowners. “We’ve actually had houses do certioraris,” said Van Wagenen. “Some people want to hire a lawyer and have it be more official,” said Farbstein. A certiorari requires hiring an attorney and also, probably, having an appraisal done, Van Wagenen said.

Costs of doing the reval

Van Wagenen and Farbstein estimated the cost of the revaluation — not including overtime — at about $290,000 or $295,000, including the mailings still left to do.

Farbstein’s father, Lawrence Farbstein, represented Guilderland in a hearing before the Office of Real Property Tax Services in 2017, arguing unsuccessfully that the state’s system is flawed because it merely samples values and does not look at a county in its entirety.

The town then hired the Farbsteins to help with the revaluation, with Andrew Farbstein working on residential properties and Lawrence Farbstein concentrating on commercial.

The Farbsteins were hired after the town put out a bid, Van Wagenen said. They do not get overtime pay. They are being paid $250,000, and their contracts ends in June. If the town wants them to do any work beyond that point, it will have to enter into a new agreement.

Van Wagenen does not get overtime, either, she said; she gets comp time. “I’ll get time off,” she said. “Eventually.”

Separately, the town also hired Wayne Miller, a residential appraiser, to look at all sales, especially the ones outside of the statistical norms, said Van Wagenen.

The bulk of the work on the revaluation has been going on since June 2018, Farbstein said. He and Van Wagenen expect it to continue for another five or six months, until the end of small-claims season.

Sending out the tentative valuations was “an all-hands-on-deck effort,” Farbstein said, with employees throughout the town hall helping to stuff envelopes.

Farbstein said that the state’s software is outdated, with the result that an outside printing company cannot be used, and working remotely is not possible. Van Wagenen said the state is in the process of rewriting the software, which will be ready in a couple of years. “We’re crossing our fingers that the new capabilities that we’ve been promised will really be there,” Van Wagenen said.

She agreed that the outdated state software “did add many hours” to the work. The two said that they had called four or five printing companies and that the software is so antiquated no one had even heard of it. Farbstein said, “It’s DOS-based, turned into a Windows program.” He added, “Even to call it Windows is a stretch.”

It requires extra steps, Van Wagenen said, giving as an example, issuing a text file, which she has to put into Excel first before she can do any statistic analysis.

State aid is “not much of a carrot,” said Van Wagenen. “We don’t know if we’re going to get anything from the state, and, if we do, it’s probably going to be very minimal.”

The state has a pool of money dedicated to reassessing each year, Farbstein said. The real-estate market has been moving upward the last five or 10 years, and the state also continues to encourage municipalities to do revaluations, but it is not increasing the pool; the pool is divided among all of the municipalities conducting revaluations.

Guilderland’s 12,000 parcels “don’t compare,” Farbstein said, to, for instance, the 424,000 that Nassau County had last year.

A call to ORPTS spokesman James Gazzale about the pool of money and the software was not immediately returned.

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