Property Tax’s Effect on Market Value

 

The Town’s official stance is that property tax capitalization is a myth or a fiction. They claim that the tax burden on a property has no effect on its market valuation. Mr. Feiner and Ms. McCarthy would have you believe that two neighboring houses, all other things being equal, with house A having a granite countertop in the kitchen, and house B having a formica countertop but with $10,000 less in annual taxes, house A would command a higher price in the market! I don’t know about them, but I’d much rather save $10k every year!

Even Melissa Baer, a project manager from Tyler Technologies, admitted that for areas that were hit the hardest with tax increases, the market values would likely decrease as a result.

Taxes are clearly a major factor in any home purchasing decision. To say that a sale of a house in June 2015 when taxes were 10k would command the same market value as that sale price in July 2015 when taxes increase to 30k is simply ludicrous.

Although taxes are a factor in the sales prices and market valuations (and Tyler Tech agrees with this point), taxes were never considered a potential factor within the Tyler Tech algorithmic model. How could the model ever be considered accurate if a significant factor is not even used in the model? If they did not consider the acreage of the parcel, the model would clearly be rejected; likewise, this model should be rejected.

Reassessment Tabular Statistics

On page 10 of the tabular statistics report, the percentage shift in tax burden from commercial properties to residential properties is shown: http://www.greenburghny.com/documents/Reassessment%20Tabular%20Statistics.PDF

The percent  of intra-class shift is disingenuous because it doesn’t take into account exemptions, almost all of which apply mostly to residential properties.

If you just look at the Enhanced STAR and basic STAR exemptions, 14,143 1, 2, or 3 family lots have exemptions, about 75%. These exemptions reduce the value by $2 billion “real market value” dollars, so the actual effective tax increase on residences is closer to 7.5%, not 3.6%, which is a significant change.

Furthermore, this analysis is only provided for the town-wide shift, and in those villages where the residential properties were significantly affected, the shift in taxes from commercial to residential is extremely significant.

Assessment change by school

Per Tyler’s analysis (http://www.greenburghny.com/documents/Assessment%20Change%20Percentage%20-%20School.pdf), the change in assessment per school district was only as high as 18% for Irvington, and as low as -11% for Greenburgh. But the numbers simply don’t work out, no matter how you define “residential”:

tyler’s analysis of “residential” 1-2-3 family condo condos &
1-2-3 family
tarrytown -0.47% 12.5% 0.7% 7.2%
irvington 18.02% 28.8% -0.1% 25.0%
dobbs ferry 5.94% 20.2% 0.3% 17.8%
hastings 15.68% 29.3% -1.1% 26.0%
ardsley 3.46% 11.4% -0.5% 10.5%
edgemont 9.70% 24.4% 5.5% 22.9%
g7 -10.75% -0.5% 0.2% -0.3%
elmsford -9.63% -3.4% 9.0% -1.2%
pocantico -4.07% 15.0% -1.3% 10.1%
valhalla -1.47% 11.6% 7.8% 11.2%

Interestingly, if you take a closer look at each school district, it’s clear that the Hastings  and Irvington school districts were hit particularly hard, with average increases of nearly 30%, and almost a quarter of homes increasing by 50% or more. In Irvington, 6.5% of homes saw their assessment more than double:

school district avg chg median chg % of lots that had an increase % of lots w >25% increase % of lots w >50% increase % of lots w >double increase
tarrytown 12.5% 12.5% 70.4% 30.7% 10.1% 1.5%
irvington 28.8% 23.9% 86.2% 48.9% 21.6% 6.5%
dobbs ferry 20.2% 17.9% 81.9% 37.3% 12.0% 1.2%
hastings 29.3% 28.0% 90.5% 54.5% 24.2% 4.5%
ardsley 11.4% 10.8% 78.1% 18.1% 2.9% 0.6%
edgemont 24.4% 22.8% 91.7% 45.3% 11.5% 0.8%
g7 -0.5% -0.9% 48.1% 8.8% 1.9% 0.5%
elmsford -3.4% -3.3% 43.1% 7.3% 1.4% 0.4%
pocantico 15.0% 9.3% 68.2% 24.5% 5.0% 1.4%
valhalla 11.6% 12.5% 75.8% 17.9% 2.4% 0.7%

Land Value Model

The land value model provided by Tyler (http://mmrc.tylertech.com/_dnn/Portals/0/20160422064601.pdf) is fundamentally flawed; they provide no data showing how they arrived at the data nor any data showing how accurate it is.

Less than 1/3 of residences utilize the land value model shown on the pdf provided on the tyler website. More than 2/3 of residences have “adjustments” or “influence factors” that is only kept on the property card and is not made available publicly on their website.

When asked for this information, Tyler claims that they are not available. When I asked why they were not available – did they delete them and throw them away, the Tyler representative said that yes, they did destroy the information and hung up.

Assessment Change based on Property Type

According to Tyler’s analysis (http://www.greenburghny.com/documents/Reassessment%20Tabular%20Statistics.PDF), the tax impact looks to be roughly evenly split, but again, the data does not bear this out:

Market value change – Residential (18203)
  Reduced Approx. the same Increased
Tyler (tax) 24% 42% 34%
Actual (market value) 15% 37% 48%

 

Market value change – Condos (5158)
  Reduced Approx. the same Increased
Tyler (tax) 14% 82% 3.4%
Actual (market value) 8% 84% 8%

 

Market value change – Vacant (1813)
  Reduced Approx. the same Increased
Tyler (tax) 3% 59% 38%
Actual (market value) 29% 34% 37%

 

Market value change – All others (3156)
  Reduced Approx. the same Increased
Tyler (tax, corporate) 40% 47% 12%
Actual (market value) 31% 25% 44%

Definitions:

  • Wholly exempt and $0 value lots were excluded
  • “Approx the same” is +/- 10%
  • Residential: 1, 2, and 3 family residences
  • Vacant: all vacant lots

Independent Analysis of the Greenburgh Reassessment

Tyler Technologies was given the lucrative contract to reassess all of the properties in the Town of Greenburgh, and the result was egregiously wrong and fundamentally flawed, riddled with simple errors, and obvious examples of overvaluations and undervaluations.

Paul Feiner and Edye McCarthy admitted that while the goal of the reassessment was for “fairness”, they would not even consider the possibility that the reassessment was fundamentally flawed, no matter how many examples of errors were identified.

Mr. Feiner and Ms. McCarthy, in dismissing the Homestead option, revealed and admitted that an intention of the reassessment was to shift the burden from commercial property owners to residential property owners.

Haberman Associates, the “monitor” of the process was clearly unsuccessful in auditing the process, so I am attempting to run an independent analysis to see the exact process by which Tyler Technologies presumably determined the reassessed valuations. However, Tyler and the Town have consistently refused to provide any actual detail on the modeling used and even full details of the parameters used for the model of each property. The publicly available information on the model is intentionally obfuscating and incomplete, and the information per parcel made available on the MMRC website is incomplete and occasionally simply incorrect.

However, using just the data that was made available, some analyses were possible, comparing the new valuations to the final 2015 tax rolls. The results of these analyses will be posted here.

A general note on the analysis:

There are 28859 parcels in the 2015 roll. This data is available on the town’s website.

Of those 28859, Tyler had 28749 preliminary assessments in their publicly available information on the MMRC website. The data from those assessments were extracted and saved, but the data on this website did not include several data points used in their model (but available on the property card), including neighborhood designation, property notes, “influence factors” on the land, condition and grade information, any manual overrides made to the assessment, Tyler’s view of the validity of past sales, and entrance information.

Of those 28749, 1288 had a change in the “type” from 2015 to tyler’s assessment; these were excluded. Lots that were valued at $0 were also excluded.

“Fully exempt” properties (such as those owned by the town or a village, like school parcels) were also excluded.

This excel file extracted some of the data collected from the publicly available files.