No one likes property revaluations. They are, inevitably, inexact and stressful. Taxpayers worry they’re going to be bloodied. Municipalities have to shell out the money to conduct them and then deal with the fallout from the aforementioned and often disgruntled taxpayers, who also happen to be voters.
Nevertheless, they are essential to tax fairness. That’s why the City of Buffalo should be congratulated for its comprehensive, just completed revaluation of city properties. It’s also the reason the city never should have waited so long to do it.
The city’s last updated property values in 2010 – and, then, only for certain neighborhoods – and it hasn’t conducted a full citywide evaluation since 2001. As a result, valuations were necessarily out of whack, meaning that some property owners have been paying less than their fair share while others were paying more. Usually, that translates to people with less valuable properties subsidizing those with more expensive ones.
And because an assessment is updated when a buyer acquires a property, that new owner ends up paying taxes based on a more-or-less accurate – and higher – value while others are paying based on older, lower values. It’s a rude welcome.
None of it is fair and all of it is avoidable. All it takes is a commitment to regularly updating of property values. It’s cumbersome, costly and time-consuming, but that’s the price of collecting taxes based on the amorphous and imprecise concept of property values.
Assuming the new assessments are, for the most part, accurate, no one will be paying any more than they would had valuations been continually updated. But those values would have been more fair in the interim and, for those who are about to see significant increases in the valuations, the change would have been gradual.
But, it’s important to note, higher property valuations do not automatically mean higher taxes. Assume, for simplicity’s sake, that the city’s tax levy – the total amount of money raised by property taxes – remained consistent from year to year. The effect of the revaluation simply divides the pie differently. Those with notably higher assessments might pay more while those whose property values increased by lesser amounts might pay less. Some might see no change at all. The reassessment itself does nothing to change the size of the pie.
But with the city – and many other New York municipalities – waiting too long between updates, unfairness infects the system, distorting valuations and the tax bills they produce. That adds to the stress of property owners and of city officials who must deal with the fallout. A regular system of updates would relieve much of that pressure.
Given Buffalo’s rising home prices, it is certain that property owners are going to see significant increases in their valuations. Average home values were 20 percent lower in 2011 while in some areas – Allentown and North Buffalo among them – average prices for single-family homes jumped more than 50 percent over the 10-year period beginning in 2008. On the West Side, prices have tripled. Even parts of the city that have typically stagnated are seeing increases in value. That’s all good news - proof that Buffalo is on the way back after decades of decline.
But Buffalo needs to do better at keeping up with valuations. The state recommends that cities wait no more than six years between valuations while an industry group, the International Association of Assessing Officers, encourages annual assessments.
It’s possible to conduct interim assessments annually while undertaking full projects every four to six years. Mayor Byron W. Brown said the city expects to conduct periodic reassessments going forward – less than a full revaluation, but enough to maintain general fairness.
Make them accurate, make them fair and make them transparent. That has to be the test. The city has made a good start on all three.