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UNEVEN CITY ASSESSMENTS SPREAD TAXES UNFAIRLY

Your Buffalo home is more likely to be overassessed if you live in a poor neighborhood than if you live in a wealthy one, and that puts an unfair tax burden on those least able to afford it, a Buffalo News analysis shows.

City Hall took stock of residential property last year, updating assessments many argued were outdated and often inaccurate.

Though the new assessment figures are an improvement over the ones they replaced, homeowners who live in the Broadway-Fillmore and Black Rock-Riverside areas nonetheless sell their houses at substantially lower prices than their new assessments.

Meanwhile, premier properties such as those at Rivermist on the Buffalo waterfront often sell for prices above their new assessments.

What's more, the new assessments -- which take effect this week and determine homeowners' property taxes for the coming year -- are wrong as often as they're right.

Half of the single- and two-family houses that sold last year were purchased for 15 percent higher or lower than their new assessment, beyond the industry standard for accuracy, The News analysis shows.

Houses were almost twice as likely to be overassessed as underassessed, and the inequities run along class lines.

The lowest-priced homes, going for under $50,000, are most likely to be overassessed.

The highest-priced homes, fetching more than $150,000, are most likely to be underassessed.

"I just think it's a big slap in the face," said Sylvia M. Vena, coordinator of the Housing Action Team for Voice-Buffalo, a faith-based, civic-minded organization representing 28 churches.

"We like to be closer (than the 15 percent margin of error)," said Cindy Baire, vice president of GAR Associates of Amherst, the city's assessment consultant. "When you do mass appraisals, we're really doing an estimate from the street. We can't see interior upgrades, so we have to assume average quality and average condition."

The News analysis compared new and old assessment figures with the sale prices of 1,365 singles and doubles, not including auctions or transactions between relatives, sold from Jan. 1 to Dec. 2 last year.

Among the findings:

Revaluation is a mixed bag, at best, for those owning the cheapest housing. As a group, assessments dropped by 17 percent for houses that sold for under $50,000 -- which lowers their tax bill. But 57 percent were overassessed by more than 15 percent, selling for much less than what the city assessed as their value.

The real winners are the owners of houses going for $50,000 to $75,000, whose assessments dropped to better reflect what they're selling for. Only 12 percent were overassessed outside the 15 percent margin of error.

Assessments for houses in the $75,000 to $150,000 range, which had been the most accurate under the old figures, continue to be on target.

Assessments went up, on average, by 5 percent for owners of houses selling for more than $150,000. They're not getting as big a break as they did before. But as a group, houses at the top of the market sell for 10 percent more than their assessed value, meaning owners there still are getting a break.

"It doesn't sound like they're assessing everybody the same way," said homeowner William D. Adam Jr. of 1148 Bailey Ave.

He and his wife, Bernadette, find themselves in the same situation as many others who bought homes for less than $50,000: Their new assessment is closer to what they paid for their home but not close enough.

The Adams bought their home for $31,700 in September, 22 percent under their new $40,900 assessment. The old assessment was $49,900.

Challenges decline

A top official in the city assessor's office said the city has not yet judged whether revaluation is a success or failure.

The time for reviewing the effort will come after the new assessment figures become official Thursday, said Anthony Krayna, Buffalo's supervising assessor.

Krayna likes one trend he sees.

The number of homeowners who challenged their tentative assessment beginning in January is down, from 5,679 last year to 3,500 so far this year.

"Believe me, I want to jump forth and say: 'Wow! What a great job we did.' It certainly indicates that," Krayna said. "But I'm a scientist, too. I'm saying I'm hoping that's what it indicates. We're going to look into that."

"I wouldn't want to make an announcement and then find out at the last minute an (expert) analysis comes out that says we messed up in some way, or our outside contractor (GAR Associates of Amherst) messed up in some way," Krayna said.

Still, city officials note revaluation has narrowed the gap for over- and underassessed houses.

And, they say, the new assessments for homes that sell for $100,000 or so are usually on the mark for their sale price.

City Hall can take credit for making the new assessments more accurate on the East and West sides, said Vincent LoVallo, Mayor Anthony M. Masiello's chief of staff.

When GAR officials shared preliminary assessments with City Hall last year, city officials advised them to return to neighborhoods in those areas and also look at newer sales data.

"We asked them to go back to areas we thought were totally overassessed," LoVallo said.

GAR lowered the assessments.

"A lot of communities haven't attempted reval," LoVallo said. "We have. We're trying to make sure our values are in line with the market."

Todd and Margaret Schultz of 42 Nicholson St., near Kenmore Avenue, are among the 400 owners of single-family homes in The News survey whose assessments have fallen. Assessments increased on 341 other homes; 71 remained the same.

Assessments decreased on 444 two-family homes out of 553 in the survey, while values increased on 36 and remained the same on 71 properties.

The Schultzes paid $60,000 for a house previously assessed at $65,000. Their new assessment is $58,800.

"I wouldn't have been livid if it hadn't changed, because we weren't talking about a $20,000 difference," Todd Schultz said.

Not an easy process

Buffalo Common Council President James W. Pitts said it is not easy reassessing properties citywide, particularly comparing similar kinds of homes in vastly different neighborhoods.

Homeowners' challenges are the way to resolve individual cases of unfairness, he said.

"What I've said to people, if they feel the reval was too out of line, is to challenge the new assessment," Pitts said.

The Adam family of Bailey Avenue talked about challenging their assessment, but they aren't sure how to go about it.

"We don't know how. It's our first house," said William Adam, director of security at a hotel. "I think our assessment would go down if we challenged."

The entire process can be hard to explain to homeowners who believe the number the city puts on their property is exactly what they can sell their house for.

"Are we going to say that tomorrow you can sell your house for exactly the assessed value we put on it?" Krayna asked. "No. We're saying that we're predicting that would be about what you would sell it for."

Krayna warned against relying solely on a home's selling price to gauge the accuracy of its assessment.

Some people buy homes at bargain prices. Others pay too much.

"You could very well have a seller who found out that they had a family member in Florida with an emergency situation and they just wanted to leave Buffalo as quick as possible so they could be with that family member," Krayna said. "They're saying to their real estate broker, 'Bring the price down, advertise it as a giveaway, and let's finish this.' "

A more patient seller might luck out and find a buyer needing to move into the city quickly.

"They don't know anything about values in the neighborhoods, and they see your house, which they believe to be one heck of a bargain compared to the house they left in California," Krayna said.

The buyer might spend $130,000 for a house that others reasonably would offer $105,000 for, he said.

"We're not going to take and raise all of the values for the neighbors to $130,000 just because of that," Krayna said. "We want that $130,000 sale analyzed against the other sales in that neighborhood."

And the city probably would not raise that house's assessment to $130,000.

Krayna declined to comment on why the cheaper houses in The News survey of 1,365 homes are more likely to be overassessed while expensive homes tend to be underassessed.

"That's something we're going to have to determine through analysis," he said.

Explanation for disparity

GAR's Baire attributes part of the disparity to which sales the company was allowed to use to come up with the new assessments.

The state did not allow sales information from auctions or foreclosures to be used as comparable sales when the company calculated values for the city's 37,888 single-family homes and 30,654 two-family homes.

The company could use only what's known as "valid sales," Baire said.

So if a poorer neighborhood had several foreclosures and auctions, the data from those transactions was not used.

"Maybe that's truly the market there, but we have to use valid sales," Baire said.

Timing accounts for why the more expensive homes may appear underassessed, she said.

GAR looked at 1999 sales when computing assessments, while The News survey used 2000 data.

The demand for more expensive homes seems to be on the rise, and sales prices for such homes increased since 1999, she said.

Vena, of Voice-Buffalo, said she suspects assessments fell in neighborhoods where they should have gone up. She wonders if appraisers were quick to reduce assessments in areas where more African-Americans have moved in.

The assessment on her own home, in the Kensington-Eggert area, fell from $89,900 to $49,800, which she considers far too low for the kinds of well-kept houses in her neighborhood.

"That sets the momentum for destabilization," she said. "I think if the formulas were done justly and really reflected what was going on, assessments (for houses priced from $75,000 to $100,000) would have gone up. And I don't think people would mind paying more taxes."

News information specialist Andrew Bailey assisted in developing data for this story.

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