Lockport NY

The Buffalo News reported that the assessment grievances have been heard and adjustment decisions will be made by this Friday:

The city’s Board of Assessment Review will convene behind closed doors Monday night to begin the process of adjusting assessments, after conducting more than 250 hearings over three days last week.

In all, more than 350 grievances were filed during Lockport’s first citywide reassessment in 10 years. Not all of those who filed requested live hearings, City Assessor Joseph Macaluso said.
Macaluso said the legal deadline for the five-member board to complete its work is Friday. “I’m sure we’re going to have some further litigation [after that],” he added...

A lot of the "pain" and litigation would be removed if the city created a taxation system that charged more for use and rewarded investment. Basing it off of mostly arbitrary valuations causes only frustration and anger from property owners and assures our slow slide downward as any investment is quickly punished for higher taxes.

The LUSJ reported  Residential and a Business reactions from people who are receiving larger assessments.

The common refrain?

"....sees it as the penalty to be paid for investing in property rehabilitation/upkeep "

“...feel like we’re being punished for fixing two things,” she said. “If we’d let it go, we would have been left alone.”

Until we have elected leaders willing to take the risk of revamping the zoning code and tax structure, Lockport will continue worrying about the little fish of paving a couple more roads, cutting a few 100k from the budget, etc. All the time the large issues of creating an environment that makes investing not only a rewarding endeavor but one that anyone would be hard pressed to pass up. An enviroment that would make paving roads etc not as difficult of a funding issue.

Last assessment article here.

The LUSJ reported on the preliminary assessment role.

KLW Group has wound down an 18-month citywide property appraisal project, to straighten the “inventory” and establish full-market values for all properties. Whose values are higher, lower or the same since their last appraisal is about to be revealed, as tentative assessment notices start appearing in property owners’ mailboxes today, Acting Assessor Joseph Macaluso said.

Preliminarily, the 2011-12 assessment roll will show a year-over-year $110 million increase in property values citywide.

Theoretically, according to data turned over to the Common Council on Wednesday, the increase in total value drives a more-than $2 city tax rate cut...

...Total assessed value of the city is $740 million. Last year it was $630 million...

...In the residential property class, which includes single- and multi-family homes, 46 percent of properties are assessed at lower amounts than last year...

If the value of Lockport was just able to keep up with inflation from 2000, the city would have been "worth" $817M today. 46% of residential properties were not only unable to keep up with inflation but actually lost value compared to 2000. Welcome to the world of stagnant growth where additionally owners are penalized for improving their properties while those who do not are "rewarded" with lower tax bills.

Take 2 people making 40k a year. One invests in their real estate while the other invests in things they can "take with them", i.e. TVs, cars, motorcycles etc while making no improvements to their real estate. Which one is "using the system" more? Which one is more beneficial to the neighborhood/city? Is it the same person that supposedly is "paying their fare share?" I submit it is not.

Everybody's house value could drop 20% and we'd all have the same overall tax bill. Or, everybody could raise 20% and we'd all have the same tax bill. Which is the better scenario for the health and desirability of the city?

Until people start to get rewarded for investing in their property by the city (the market itself in the city stopped rewardinga long time ago) , only the bleeding hearts looking to save a piece of history or those who can aford nothing else, will risk investing in an area with declining property values. What is the city going to do about it? If nothing the city will contiue its low slide down. No amount of budget cutting will fix it.

4/13/11

The Buffalo News and LUSJ reported that the mailing has been delayed about a week. Also notable:

....Koszarek said the state property tax office thinks the norm is for 10 percent to 20 percent of property owners to ask for meetings. In Lockport, that would be 800 to 1,600 parcels.
“Their view is, if it’s under 10 percent you didn’t raise it enough, and if it’s more than 20 percent you raised it too much,” Koszarek said.

 Sounds like an accurate system. ;)


4/11/11

Buffalo News reported they are on their way.

Notices of revised property assessments may begin landing in city property owners’ mailboxes as soon as this week.

After some false starts in the past decade, this will be the city’s first complete revaluation in 10 years.

Assessor Joseph Macaluso said he has booked a conference room in Lockport Senior Citizens Center at the Dale Association, 33 Ontario St., to hold informal conferences with property owners who disagree with their new assessments.

eLockport appears to be continually adding information or I just do not recall everything I've seen there. Today I noticed some assessment information.

Information includes:
Explanation of the NYS Real Property Tax System
Common "Myths"
Fair Assessments

There is also a property search with tax maps, comparables etc.

Read up before the reassessment notices come in April.

The Buffalo News has reported that Ulrich has filed a suit to reduce the assessment on the Ulrich City Center:

Real estate developer David L. Ulrich has sued the city to try to have the property assessments lowered on Ulrich City Centre and several other properties he owns.

Ulrich’s suit was filed just before the close of business Friday, beating a legal deadline for tax lawsuits.
The suit, filed by attorney P. Andrew Vona, asserts that Ulrich’s properties are assessed at a rate per square foot that is far higher than other downtown buildings.
Assessor Joseph Macaluso said that’s absolutely true, and there’s a good reason for it.
“The buildings are different,” he said. “[Ulrich City Centre] is a lot better. You’re comparing a good quality, 2006 brick building to some buildings built in the 1920s, of low quality.” ...

We've set up a race to the bottom. Hopefully he won't ask for the $50k assessment that Granchelli Development got rewarded with for sitting on the F&M building forever. Creating some type of hybrid tax structure with possibly a Land Value Tax feature would be worthwhile for all of the city.

We need to reward investment, not punish it.  Create a system that frees up money for those who would like to invest it. The investment would make the city more desireable as a whole. At the same time get those sitting on propertites to make them worthwhile or otherwise to move on and get them into the hands of someone that will.

There has to be a better system out there somewhere.....

Buffalo News reporting it is a possibility. It has been discussed here before and this quote form the article sums it up well:

She said it's similar to the property tax breaks that go to businesses that expand, or the tax breaks that Erie County grants for investment in historic homes, a measure that passed with Republican support in 2002. "If the abatement is good enough for businesses, and it is good enough for historic buildings, then why isn't it good enough for residents who want to fix up their homes?" she asked Thursday.

I could see not finding this favorable in an already hot real estate market. But it would sure be beneficial to  distressed neighborhoods. It's tough enough justifying many improvement when other houses nearby are dragging down values. Its a double slap to be hit right away for stepping out on a limb to make things better.

LUSJ reporting on the revaluation progress.

A city committee interviewed representatives of four private firms interested in taking on citywide property revaluation Thursday.

The committee, comprised of officials including Mayor Michael Tucker, Acting Assessor Joe Macaluso and Real Property Appraiser Lena Villella, is supposed to recommend one of the firms to the Common Council for hire next month.

If a firm is hired, it’ll be the kick-off of a revaluation project that’s expected to cost city taxpayers about $200,000 by 2011.

 ------------

When that happens, property owners are said to pay less — or more — than their “fair share” of property tax.

Revaluation is about “getting it so it’s fair for everyone. Right now it’s not,” Pat Schrader, 4th Ward alderman, said this week.

 -----------

“I think there are an awful lot of remodeled houses that are worth more than they were eight years ago. They’re not paying their fair share, and we need to catch up with ’em,” he said.

-----------

Third Ward Alderman Flora McKenzie believes the point of revaluation really is to make taxation fairer, but unlike those who see a scheme to raise everybody’s assessment, she fears the opposite will happen.

“There are some houses in really sad shape that shouldn’t be assessed as high as they are. There are houses in my ward that I wouldn’t pay $1 for,” she said. “The way I look at it, we’re going to lose, not gain (value)

-----------

"Fair". Is it fair to watch the F&M building deteriorate in a long term race to lessen its tax burden to the owner? Is it fair to watch your neighbor's tax rate go down because they do not invest in their property (and thus the neighborhood hurting sale prices) and watch yours go up because you took the risk to invest in the city? I have the same outlook as McKenzie as it is a predictable path of the process in older areas.

I think most people will agree that those who can pay more should shoulder some more of the tax burden. In a "growth" area, pure assessment will work as people have a much lower risk in getting a return on their continual investment. They will take a tax hit knowing that they will recoup investment upon sale with rising house prices. But in a low demand area investing is risky enough with near static (or dropping) home prices due to surrounding disinvestment and an increased tax hit is just another blow. The inertia of it all is very difficult to turn around.

Old, low demand areas must be creative in their taxation so that they promote investment instead of a long slide of disinvestment. Residents should be rewarded for taking a chance of bringing reinvestment to an area. The long term growth will far out weigh the "fairness" trip to decay. Reward people "draws" such as nice houses and buildings: not low tax empty buildings, empty lots and parking. A mix of land based and value based taxation along with other tax incentives for hard hit areas will help turn things around. Or how about freezing the tax-rate at the purchase price until it is sold again? It rewards people for sticking around and investing and it bases it off of a true market rate price. You'll make up the taxes upon the next sale (or sales as others have the incentive to invest also). There are probably many more ideas out there but straight assessments are pry the least conducive to spurring investment in the city.

LUSJ is reporting that the city counsel is looking to bid out the city wide reassessment.

Macaluso, who works for the city on a contractual basis, has already told Tucker that revaluation services by a private appraising firm could cost $200,000 to $250,000. Updating the city’s property inventory, which is known to be rife with inaccuracies, and checking/adjusting the assessed value of every parcel is expected to take about 18 months.

Adjustments have been nominal since mid-2006, when then-Assessor Vince Smith quit the post in light of widespread public outrage over his proposed value hikes. His successor, Peter Galarneau, quit earlier this year, after informing Tucker he could not manage revaluation without some outside help.

I can guarantee there will be outrage again. ;)

The city would be wise to find ways to make the assessment positive. No one likes to be penalized for upgrading their properties while others get "rewarded" for neglect. Case in point being the reduced assessment on the F&M building because of water damage and no tenants.  In most instances the system is backwards.

The truest value is sale price. What about setting the assessed value at what the the house was purchased for and keeping it there for that owner? Find a way to reward those who stick around and those who take run down houses and invest in them. Next time it is sold the assessment will automatically bump itself up to the fair market value. (of coarse loop holes would have to be closed) As for DT, how about some partial land based tax components to deter parking lots and sitting on empty buildings?

The assessment process should be another tool to promote investment; not to deter it. The citizens would be much happier.