A glimpse into Teaneck's future?
Today's Record reports on the fallout from a recent tax revaluation in Rutherford. As you might imagine, many residents, especially retirees, are reeling from significant increases in their property taxes on account of the new assessments they received recently. Protests and a petition drive are planned as residents believe the revaluation was "conducted arbitrarily" and helped cause a 13% jump in the municipal tax burden. While some homeowners, both in Rutherford and Teaneck, are sanguine about the process, those in Teaneck dreading the results will draw no comfort from the fact that the firm that Rutherford employed was none other than Appraisal Systems, Inc., the company that is currently completing Teaneck's revaluation.
As Rutherford residents belatedly organize to express their displeasure, a group of Teaneck residents has taken a lesson from recent experiences in Rutherford, Bergenfield, and elsewhere and begun a proactive effort to make sure that taxpayer interests are protected during this period. A gentleman named Harry Reiser has been recruiting members through Internet postings to a new Yahoo! group dedicated to informing citizens about Teaneck property taxes and serving as a watchdog over the process. Not a bad idea at all.
They've got the whole town in their hands
posted by Teaneck Blog @ 10:10 AM
42 Comments:
Before jumping the gun, it is wise to remember what the second step in the process is -- when the town council takes the total assessment of the township, and divides it into the 2007 budget to determine the new tax rate. This "multiplier" will most certainly be lower, and then homeowners will know what their new taxes are. Appraisal Systems has successfully done reappraisals in a number of Bergen County towns, and I have friends in Montvale, for instance, who saw their taxes be reduced slightly, even though their assessment went up.
While some homeowners, both in Rutherford and Teaneck, are sanguine about the process, those in Teaneck dreading the results will draw no comfort from the fact that the firm that Rutherford employed was none other than Appraisal Systems, Inc., the company that is currently completing Teaneck's revaluation.
TB's characterization of the revalution process and Appraisal Systems is wholly out of character with his otherwise calm and even tempered postings. Nowhere in this article is there one bit of evidence that the revaluation was done incorrectly or arbitrarily.
The revaluation is a GOOD thing and probably overdue. In the interest of tax equity and good government it is important that we pay our FAIR share and it is indisputable that property taxes are not now being assessed fairly.
For example, I am sure all of us know about people who have had extensive remodeling done without their home being revalued -- I certainly know such people. Their property taxes SHOULD go up. Likewise, people who live in areas of town which have become more desirable should pay more than those in less desirable parts of town.
Face it, property taxes are a tax on wealth that we, as a society, have decided upon as a way to fund our government services. If my house is worth more than my neighbor's, it is only right that I pay more in property taxes than he does.
There is no doubt that some people on fixed incomes will see increases but the fault does not lie with the appraisal company, it lies with the way we have decided to fund our services.
To TB and others of what I presume to be his conservative political outlook, I can only say that they are free to gloat at all the liberals (and I am a liberal) who will squawk when they find out that their cries to tax the wealthy are coming home to roost! I certainly intend to point this out to any of my liberal friends who complain when they get their new tax bills!
Does anyone know if this Harry Reiser exists? I can't find him anywhere.
Individual valuations are less important than the question of whether people with comparable houses on comparable lots in comparable neighborhoods are treated in a comparable manner.
DOes anybody know when the homeowners are getting the info on what the new values of their homes are??
Here's a note from Mayor Katz about the reval:
Reval Results- Within the next 60 days, Teaneck residents will receive a letter stating the fair market value of their home as of October 2006. The Teaneck revaluation as required by the State of New Jersey will then have been completed.
IT IS VERY IMPORTANT NOT TO APPLY THE 2006 TAX RATE TO THE NEW VALUATION OF YOUR HOME
Property taxes cannot be computed until the new tax rate is established in the Spring of 2007.
The last time Teaneck had a reval, was approximately 20 years ago. The VALUE OF YOUR HOME WILL GO UP--- BUT THAT IS ONLY PART OF THE EQUATION.
To Reiterate: Property taxes cannot be computed until the new tax rate is established in the Spring of 2007.
***If you desire, you may meet with an Appraisal System representative to discuss or present any relevant information regarding your new 2007 assessed value. To arrange an individual meeting please call 201-493-7300 within 10 days of receipt of the letter with your new home value.***
TB's characterization of the revalution process and Appraisal Systems is wholly out of character with his otherwise calm and even tempered postings. Nowhere in this article is there one bit of evidence that the revaluation was done incorrectly or arbitrarily.
I think you need to reread the posting. You seem to have misunderstood.
Protests and a petition drive are planned as residents believe the revaluation was "conducted arbitrarily" and helped cause a 13% jump in the municipal tax burden. While some homeowners, both in Rutherford and Teaneck, are sanguine about the process, those in Teaneck dreading the results will draw no comfort from the fact that the firm that Rutherford employed was none other than Appraisal Systems, Inc., the company that is currently completing Teaneck's revaluation.
I think this statement can be taken no other way than as a criticism of Appraisal Systems and of the process as a whole. If I misinterpret you I apologize, but that is what you wrote, whether you intended it or not.
publicschoolparent-
I'm sorry, but you are way off here. What I wrote is that many Teaneck residents are not concerned about the revaluation process, but those who are worried about potential problems cropping up won't be comforted by the fact that another town that has just undergone a revaluation by Appraisal Systems Inc. has a number of residents up in arms and complaining about the company. This is perfectly innocuous and constitutes no judgment on my part about the process as a whole or that company in specific.
Prices since 1986 are way up in all parts of town. If anything, they have on average probably risen more in the less elegant parts of town percentage-wise. This means that a fair revaluation should not hit the West Englewood section as hard as other parts of town and this will surprise many who are fearful in that section and shock those in other parts who thought West Englewood ought to pay the most. That is the scenario I would foresee.
I would think that the W. Englewood section would be hit the hardest...all the add-ons and construction without permits etc.
It is a boon for the tax assesor
The revaluation has nothing to do with how much the housing market has changed since 1986. The purpose of the revaluation is to re-establish parity with respect to how much homeowners in comparable homes pay in property taxes.
When the revaluations come back, the thing to look for is whether people with comparable houses have received comparable assessments.
It'll be helpful for people to exchange information with others to determine whether their assessment is consistent with others whose houses are comparable.
It'll be helpful for people to exchange information with others to determine whether their assessment is consistent with others whose houses are comparable
you can also just go online or to the tax office and look at the records...they are open to the public :)
Swurgle said:
"When the revaluations come back, the thing to look for is whether people with comparable houses have received comparable assessments."
"Comparable" is a dangerous word and will be a source of controversy if not properly understood. Houses of comparable size, lot size, number of rooms, condition, improvements, etc. could still be assessed higher in one part of town than another, depending on how the market for comparable houses has performed in the particular location.
In Bergenfield, some people who had bid up prices in certain neighborhoods near houses of worship suddenly got all weepy, saying they were being "penalized" for living close to a house of worship and even demanding special adjustments on some vague notion that it was discriminatory to let their assessments stand.
Let's hope that doesn't happen in Teaneck. If it does, I'll agree to special adjustments on their assessments when they agree to share the profits on the resale of their homes with the taxpayers.
Location is a key component of the comparability question.
I'm just guessing here, but I suspect that the people who will end up with the highest valuations will be the ones who live in bulked up houses in West Englewood.
If anything, the disparity between the assessed valuation of the housing stock in West Englewood and the valuation of the stock in other neighborhoods will likely be wider after the reval than it was before resulting in people in West Englewood will bear even more of the tax burden than they did before the reval.
We'll see soon...
There are mcmansions near the mosque in Glenpoint; the prices have gone up proportionately more in Northeast than in West Englewood. Plenty of West Englewood houses (not the ones everybody notices and/or talks about) have not sold proportionately high.
This comment has been removed by a blog administrator.
Let me restate: McMansions, regardless of location, will bear a greater tax burden than shleppy houses, regardless of location.
There are McMansions all over town, but there are a more of them in West Englewood than elsewhere.
In the end, I stand by my prediction that West Englewood will bear a greater percent of the tax burden than before the revalaution.
And people in West Englewood will be even more pissed off than before about the school budget...
anonymous at 10:13: Where did you receive your info that prices have gone up proportionately more in the Northeast than in West Englewood? This has the ring of rumor. It is certainly counter-intuitive.
I don't know if it's true or not, but I don't see why it is counterintuitive. If West Englewood was always desirable and always had a premium built-in to its home prices even when the market was cooler, it stands to reason that it might have benefited less from the most recent run-up in home prices than other areas. One of the major causes of the housing boom was the availability of low rate mortgages suddenly brought many new first-time buyers into the housing market. This might have caused the prices of lower end to homes to rise more on a percentage basis than homes that were already higher priced.
Let's see if anonymous at 10:13 will have an answer based on fact, or if he/she will be content to be bailed out by Teaneck Blog's speculation.
The availability of low rate mortgages didn't only draw first-time homebuyers into the market; they brought in existing homeowners and condo dwellers looking to step up, as well as first-timers who weren't prepared to settle for starter houses. It seems fair to me to say that nearly all boats were lifted by this tide. On top of that, there is an added attaction to living in West Englewood that would likely keep that built-in premium growing as well.
I could be wrong, but I hope we can get some real information here before an assumed fact becomes an item of resentment down the road.
Are any shacks in any part of town below $400,000 the past few years? There is plenty of $500,000 stock in West Englewood.In 1986 these houses were much more than 25% apart from the shacks. Sure, the million dollar plus babies everywhere will have to pay, rightly so. But there are lots of the $500,000 type in West Englewood that should go lower in a true revaluation than they have been for some time.
There are plenty of shacks all over town that have solde below $400,000 in the past few year...granted not as many as there used to be
Go to Zillow.com and type in 07666 and you will get a fair amount of data just by clicking around on random properties.
The impact of location in Teaneck is background noise compared to the issue of date of last appraisal. If your house has not been touched since 1988 your appraised value is going up and probably by a lot. Although the increase in the ratable tax base will allow the rate to come down, it will not be enough to overcome the increase in assessed value these homeowners will experience.
As to properties that have been appraised since, the increase in appraised value will be less and the impact on your taxes will depend on the extent to which the overall tax rate drops. While prices may have risen faster in some areas of town than others, I don't think that the "pecking order" of "desireable neighborhoods" (as judged by home prices only) has changed much since 1988, so again I believe that date of last appraisal rather than neighborhood will have the greatest impact on the % change in appraised value.
"If West Englewood was always desirable and always had a premium built-in to its home prices even when the market was cooler, it stands to reason that it might have benefited less from the most recent run-up in home prices than other areas." I think that the run-up in Teaneck home prices has had little to do with macro-economic conditions and much to do with the growth in the Orthodox community. Due to the need of the Orthodox to reside within walking distance of temples and the limited stock of housing meeting that criteria coming on the market each year, I think that the rate of increase in W. Englewood was at least equal to those experienced elsewhere in Teaneck - except in some areas south of Rt 4 where new Orthodox temples put new areas of housing within walking distance of a temple for the first time.
In 1986 the Orthodox purchaser had little to motivate him into buying outside West Englewood. There are many more qualitative and quantitative synagogue options for such purchasers all over town today.
8:40Blogger-
Our house had major work done in 1990,2000,2006...pulled permits for all of these things and still by the town (tax) records our house has only gone up in assesment from $160 when we bought it to $174200 as of current tax assesment records...
on the open market our house is assessed at over $400k...so it would seem that LOTS of houses are under assessed and we ALL are going to get a sticket shock?!?!
Or am i not understanding something in your last post?
Everything is currently underassessed. 1986 was the last time houses were brought to real value. Talking about $400,000 is talking about real values. When your house goes up from its assessment at $174,000 it will also have its rate lowered. what we are talking about are the real bottom line taxes people will be paying. It seems there are people who are confused about the elemental process. The Mayor has tried to explain it but there is much needed education.
In a fair reassessment people should have nothing to fear provided they have been above board in any work they have done.
The valuations are not supposed to be specific to any neighborhood but to the kind of house.
In Bergenfield, instructions were given to the reassessing people to take the synagogue neighborhood into account. In teaneck today there are synagogues all over town. There should be no difference in a fair reassessment between house X with factors a,b,c,d and house Y with factors a,b,c,d exactly the same but in another neighborhood.
Anonymous-
Thank you that is what I thought...perhaps it was the way 8:40Blogger stated it that I thought it was something different.
From the Teaneck Assessor:
"Revaluation is a periodic program undertaken in order to appraise all real estate in terms of its full and fair market value (bringing all properties to 100% of their true market value). Also known as tax equalization, revaluation ensures that all property owners pay their fair share of taxes based on the actual market value of the property they own."
As neighborhood is a factor in market value, it will effect a properties assessed value.
NJ Tax Records Search can also be used to obtain information on Teaneck properties. It includes both commercial and residential properties as well as a history of both assessed values and sales prices.
(When searching by address, abbreviations for terms like Avenue are used. It is simplest to leave out the abbreviation and enter just "Palmer" for "Palmer Ave".)
Everything is currently underassessed, but the question is how underassessed. Your assessment has not changed since 1988, it's going up a lot and the decrease in the overall tax rate will not make it up. You built a new house in 2004, your assessment probably won't change much but the decrease in the tax rate should save you some serious money. All scenarios in between will depend on degree of underassessment v. the drop in the tax rate.
As to the impact of neighborhood, yes it is part of the assessment process - just like it impacts the real life prices people pay for housing. Take this example:
2 identical houses in different Teaneck neighborhoods in 1986 - one assessed at 150K, the other at 200K. Assume Teaneck house prices doubled, now you have 300K and 400K. You want to say that some formerly inexpensive neighborhoods have gone up by somewhat more, add 25% to the appreciation of the low end neighborhood - so you have about 340 on the lower end property. Significant, but not nearly as significant as the overall increase during this period.
840blogger:
"You built a new house in 2004, your assessment probably won't change much but the decrease in the tax rate should save you some serious money.
Not true! This assumes that a house built in 2004 would have been assessed at the 2004 market value. This is not the case. It would have been assesed at the market value as of the last assessment, roughly 20 years ago.
Your assessment has not changed since 1988, it's going up a lot and the decrease in the overall tax rate will not make it up.
This is based on the same mistaken assumption.
what i dont understand is WHY Teaneck fought the reassesment?
Why not do it sooner?
The same reason the suffering Bergenfielders overwhelmingly rejected a new reassessment they badly need--COST.
Cost?!?!
Instead of loosing lawsuits they could of spent the money on the reassesment(s)...
sounds more like poor money managment!
"Not tue. This is not the case. It would have been assesed at the market value as of the last assessment, roughly 20 years ago."
Tom - you are just wrong on this one. While the land component may not change, the value of your structure(which is by far the larger cost in most cases)is taken directly from the construction costs your builder submits to the town to get your building permit (you pay a percentage of this amount to get your building permit). You tax assessment = land + construction cost
The town does not do a reappraisal of new houses to determine the assessment on new construction.
that is the problem...too many residents did not get building permits for the work that was done...they are the ones that rightfully have something to fear!
The valuations are not supposed to be specific to any neighborhood but to the kind of house...There should be no difference in a fair reassessment between house X with factors a,b,c,d and house Y with factors a,b,c,d exactly the same but in another neighborhood.
I think you're wrong. To determine the fair market value of house X on West Englewood Avenue with factors a, b, c and d, the assessors will look at recent sales prices of homes with those same factors in the proximate area, i.e, along West Englewood Avenue and other nearby streets. I don't think they'll be paying much attention the sales price for house Y on Glenwood Avenue, even if it does have the same a, b, c and d factors.
In Bergenfield, instructions were given to the reassessing people to take the synagogue neighborhood into account.
What the heck does that mean?
They should not be neighborhood specific. In Bergenfield they were.
I'm sorry, but a McMansion in the Glenwood area won't fetch the same sales price as a McMansion in West Englewood. If the reassessment doesn't take location into account, it won't arrive at fair market value and it won't be a fair reassessment.
Where did you get the idea that the revals should not take actual sales prices of comparable houses in a home's proximate area (neighborhood) into account? I don't think you're correct.
Valuations are based, as required by New Jersey law, on what a willing and knowledgeable buyer would pay to a willing and knowledgeable seller of the property. Construction costs are a non-factor in this calculation.
In addition to the size, style, number of bedrooms, number of bathrooms, finished basement, size of lot, street frontage and condition of the property, the other main criteria for pricing a property are all called "location".
Given the power of location in determining home values, one can be almost certain that identical houses in different neighborhoods will NOT be taxed equally.
Appraisal Systems uses all sales in the past three years (with more recent sales weighted more highly) to build a model that pulls in all of these factors to calculate a value for each property. As prices vary in different areas of the Township, assessed values will vary accordingly. It is not at all unlikely that Appraisal Systems is using distance to a synagogue (or falling within some designated radius of a synagogue) as a variable in their model.
And the fact that one does not benefit from an amenity that may increase value, such as proximity to a synagogue or unused bedrooms for empty nesters, will not be accepted as an argument. After all, if you sold the property you'd expect that variable to be factored into the higher price of your home.
Remember, that the Township DOES NOT "make" any money by doing this revaluation. In fact, the township loses from the revaluation, which will cost Teaneck (and all us taxpayers) about $1 million, which will be spread out at $200,000 per year over five years.
The purpose of a revaluation is fairness. The property tax system is designed so that property owners are paying taxes in proportion to the value of their property. As the last full revaluation in Teaneck was over two decades ago, discrepancies have built up between different houses and different neighborhoods, resulting in some people paying more than their "fair" share, and some paying too little of the tax burden. We'd all love to pay less in taxes, but a decreased assessment for any one property raises the tax rate for everyone else. A revaluation that accurately captures current property values for each property ensures that each property owner is taxed commensurately with the value of their property.
The tax rate is calculated by dividing the tax requirements (school, municipal and county budgets minus expected revenues from state aid, other taxes and sources of income) and then divided by the total value of all taxable assessed property. For the current 2006 tax year, this was approximately $121 million in taxes that needed to be collected, divided by $2.6 billion in rateables, which resulted in a $4.66 property tax rate for each $100 in assessed value.
Based on my own model, built on an analysis of recent sales, my seat-of -the-spreadsheet estimate is that total assessed property in Teaneck will be about $5.5-6.0 billion after the new revaluation, an increase of about 110-130% on the average property. If the same $121 million needed to be raised next year via property taxes, the tax rate would be between $2.02 and $2.20 per $100 in assessed value.
Yes, your assessment is going up, but the tax rate is heading down in an equal and opposite direction, on average. A useful rule of thumb is that if your property has increased faster than the Township average, your taxes will go up; if it's less than average you'll be saving a few bucks.
This is all graded on the ultimate curve. The question is not how much your new assessment will be; your question is how did your assessment change compared to everyone else in Teaneck.
Do your own best estimate of the current value of your property if it were sold on the market. Divide it by your current assessed value (note, this doesn't work for most recently-reassessed properties). If this number is greater than about 2.2, your taxes will almost certainly be on the upswing, the more it exceed 2.2 the more your taxes will go up. For example, if your property has gone up by 50%, your taxes will go down; If another property has tripled in value, you're going up. At or around an increase of 120%, and you're about break even.
You will have several opportunities to challenge your assessment, once the numbers are sent out. While the initial process will be relatively straightforward, in order to file a formal appeal you'll have to provide comparable sales to show that your valuation is inequitable. Comparable properties are those with comparable characteristics, which includes location: The closer the home is to yours, the more comparable. Be prepared to provide specifics for the homes in question and to justify why your property is out of line.
Ultimately, most residents will see little change or a decrease in their taxes. Knowing all this information should help you better judge in advance what your likely net result will be.
Alan Sohn
Alan-
Thank you!
Your post was very informative and helpful!
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