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Norwalk tax assessments questioned

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Update, 1:22 a.m., Oct. 1 – comment about authenticity of data

NORWALK, Conn. – It might be easier for Norwalk to pay its expenses if the tax assessments had been done fairly, a Norwalk citizen said recently.

The man, who does not want to be named, had researched commercial sales between 2008 and 2011 and found a large discrepancy between the assessed value and the money garnered by sellers – properties appear to be undervalued, he said.

But a Stamford tax attorney said that, while mistakes could have been made, a discrepancy could be attributable to factors other than a deliberate under assessment.

Norwalk doesn’t have a cost problem, it has a revenue problem, the Norwalk taxpayer said.

“As a homeowner, our property taxes are much higher than the surrounding, much wealthier towns and I certainly do not wish to pay more in taxes!” the man said in an email. “Yes, the state should provide more funding for our schools, but that is not the only reason for our revenue shortfall. I believe the answer lies within the property revaluation conducted in 2008. As one who follows the real estate sales in Norwalk, I have noticed for some time that what appears to be a large discrepancy in recorded commercial real estate sales values versus the city’s valuation of the properties for taxing purposes.”

He had compiled four years of sales data, from 2008 to 2011. Of the 132 commercial sales, about 66 percent were sold well above the city’s assessed value, about 19 percent higher on average.

His calculations showed at least $9 million in additional revenue per year would have been obtained if the properties had been assessed 19 percent higher.

Stamford attorney James M. Rubino, who boasts 31 years of experience in tax law, said those conclusions don’t take into account that tax assessments are for 70 percent of the value of the property in question.

While the appraisal was effective on Oct. 1, 2008, just after there “were a lot of very severe events that happened in a compact period of time,” a good appraiser would take that into account and adjust the appraisals accordingly, he said.

Norwalk could, if it wanted to, do a reval more often than it does it now, if it had the political will to do so, he said. Revaluation is a costly process.

The Norwalk taxpayer said he had taken the discrepancy into account. The analysis was based on the 100 percent valuation by the city, not the 70 percent figure.

Rubino said he has been involved in Stamford government, which gives him insight into the thought process behind an appraisal.

“If anything, they would for political purposes value commercial property higher than residential property,” he said. “So it doesn’t make any sense to me that (under valuing) would be the case because  that’s (residential) where the votes are.”

The compilation of data is attached below.

2008-2011 Commercial Sales – scrubbed

Comments

8 responses to “Norwalk tax assessments questioned”

  1. nwkprobate

    Michael Stewart … does not know Norwalk, its neighbors or its fabric. He couldn’t tell you the difference between Broad River and Marvin Beach. Stewart doesn’t even live around here … he lives in Queens, New York. It is pathetic. He should not be Norwalk’s Tax Assessor but Mayor Moccia insisted on renewing his contract, insisted!

    (This comment has been edited to conform to our policy)

  2. Carlos Sanchez

    This attorney may understand the law, but not the way taxes are collected. The tax rate is set up based on the amount of money needed. Norwalk is not the federal government, and they would not collect 9 million extra dollars. The analysis may be 100% correct, but the conclusion is wrong.

    The assessment is meant to ensure that relative to each other, houses value is assessed. It doesn’t mean you can sell it for that. It means at one point in time, if your hosue is worth twice as much as mine, it is assessed at twice as much and you should pay twice as much in taxes.

  3. Bruce Kimmel

    Rubino raises a good point. Are the figures used by the unnamed resident the 70% assessment, or the total market value of the property. Also, regarding revenue, a shift upwards in the value of commercial properties would indeed lessen the tax burden of residential homeowners, but it would not necessarily generate more revenue for the city, unless our budgets were increased — which would definitely have an adverse impact on commercial properties (and to a lesser extent on homeowners.)

  4. Herb Eaversmels

    I appealed an assessment, which the Tax assessor had pegged at more than 3x the actual market value of the item. The Tax assessor agreed with me and made the adjustment. What was most interesting was the Tax Assessor said I may need to appeal every year since there is no way for them to make the correction in the system. Can’t wait for the new assessments. I’m waiting by the mailbox.

  5. Adam Blank

    I have many problems with the way the City handles assessments as well as how it handles appeals of assessments; however, I don’t think the analysis described above is helpful in a critique of the administration’s handling of tax assessment.

    Property assessments were last set as of 10/1/08. By statute (with very few exceptions) the 10/1/8 valuations may not be changed until the next revaluation which occurs in less than a month. Therefore, a sale in 2009, 2010, 2011 or 2012 has very little relevance to the value of the asset as of 10/1/8.

  6. Mike Mushak

    Mr. Rubino, quoted in the article, is probably wrong about the figures representing the reduced 70% figure. The person who spent that much time researching these commercial sales figures was surely not that dense to use the 70% assessed value, but would have used the true 100% assessed value, unless they are just really dumb! Nancy should confirm this for her readers. Kimmel also makes this assumption, which again, seems highly unlikely by someone doing this much research. That sounds more like a smokescreen or very weak argument to diminish this potentially highly disturbing revelation about Norwalk’s lopsided tax burden, if indeed the numbers can be verified.
    .
    Commercial under-assessment would clearly shift the tax burden onto residential, which looks like what happened in Norwalk just in time for the economic collapse. We will never know how many foreclosures happened or neighborhoods further destabilized, that were due to sky-rocketing tax bills besides the more common reasons like unemployment and bad loans, but I would bet it was and still is a factor.
    .
    The bigger picture here is why the 2008 botched reval was rewarded with a contract renewal for Stewart by Moccia. There was plenty of evidence that the 08 reval was so badly managed that entire neighborhoods like Harborview, whose owners could afford to lawyer up, were given blanket reductions. Other neighborhoods, and most condo owners who were hit with 20-50% increases just as their properties plummeted in value, were not so lucky. Spreadsheets showed wildly varying land values on the same streets, which should be impossible, and wildly varying assessments that city officials could not explain, except to hide behind “proprietary immunity” by the reval contractor who refused to release or even explain their formulas. At the time, Stewart’s staff even said they were confused by all the different formulas being used. When the Tax Assessor’s office is confused, shouldn’t good leadership have stepped in to restore confidence in the system? This did not happen in 08, and many taxpayers were left feeling helpless and even persecuted by the arrogance on display in City Hall.
    .
    The good news is that the city did not hire the company that did the 08 botched reval. The bad news is that the company the city did hire is the same one that Stamford just used which resulted in a huge public outcry and near-riots in Stamford with packed public hearings and calls for audits and investigations by mayoral candidates and angry homeowners and businesses who were hit with similar 20-50% increases that entire segments of Norwalk suffered from in 2008, when pleas for help were simply ignored by Moccia and his Tax Assessor, causing much anxiety and financial hardship for so many.
    .
    Let’s hope this year’s reval in Norwalk will not result in the same lopsided and irrational tax increases that the 08 reval resulted in, which evidence showed may have actually helped de-stabilize neighborhoods that were struggling to improve. After Stamford’s recent bad experience with the same company, any hope for a fair and equitable reval in Norwalk is greatly diminished. We do know one thing: just as in 2008, the public should not expect any help from City Hall, especially if Moccia by some tragic miracle is re-elected.
    .

  7. Anonymous

    Attorney Rubino is in fact wrong and Mr. Blank is missing the point. The analysis was based on the 100% valuations that the city established in 2008. The valuations set in 2008 were largely based on comparable sales data from the height of the real estate market prior to the crash (Real estate transactions – other than foreclosures – came to a virtual standstill immediately following the crash in late 2007). So one would think that the actual sales prices of commercial real estate in the past five years since the 2008 reval would have been for far below the 2008 valuations – given this has been the worst commercial real estate depression in our history. In fact, over 60% of the actual sales prices that occurred for commercial real estate in Norwalk were for much more than the 2008 valuations. It isn’t as if there is high demand for commercial real estate in Norwalk that somehow has increased commercial real estate values beyond 2008 levels. Just look around at the vacant buildings and empty storefronts. Residential sales in the past five years have clearly been lower than the city’s 2008 valuations and hopefully, this will be reflected in the 2013 valuations.

    The 2008 assessment shifted the burden even further onto the backs of residential property owners and away from commercial property owners.

    This isn’t a critique of the administration’s handling of the revaluation – obviously it is an enormous undertaking that is a complex and thankless job. We need to make sure that the next revaluation accurately reflects property values, both commercial and residential in order to fund our city and schools and does not further shift the tax burden unfairly onto residential property owners as it has been for the past five years.

  8. Don’t Panic

    This reval will not likely be any better given the fact that the reval compant insists it will only use market data with one breath while threatening residents with higher assessments based upon having to make assumptions about the home if they aren’t permitted access.
    .
    Given the overall trend downward of Norwalk’s property valuations by other reports using the same markey data, there is simply no reason to assume anything that increases the value, wiyhout records of alterations..
    .
    Such warnings amount to a pattern of public admission that they are straying from a uniform and fair assessment process that good lawyer could use as evidence in challenging pretty much any assessment in Norwalk.
    .
    I expect we the tax-payers will foot the bill for even more challenges this go round.

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