A Time to Grieve: Assessments Up, Despite Market

Posted on 07 May 2009

On Monday, an outraged Southampton resident stood at the front desk of the town assessor’s office with a letter in hand.
“You are hereby notified … that the assessed valuation of the real property … owned by you has been adjusted as follows,” began the letter, which was mailed Friday, May 1.
“I bought my house six months ago for $600,000, but [this letter] tells me it was assessed last year at $1.2 million and now the assessment is $1.3 million,” said the resident, who preferred to remain anonymous. “Whoever did this assessment had to be blind to not notice all of the ‘for sale’ signs [in the area]. The market is dead and there is no financing. I can afford these increases, but my concern is for the 90 percent of the community who cannot … what will happen to the old woman who is on Social Security?”
Southampton Town’s assessor Ed Deyermond understands this complaint and the others like it that his office has received after 9,000 such notices were sent to town property owners. Deyermond contends the town must comply with state law, which dictates that properties be assessed based on the real estate market conditions as of July 1, 2008.
According to some reports, the real estate market was fairly robust last summer.
John Valente, the Southampton Town Senior Property Analyst, quoted Town and Country Real Estate as saying that, in 2008, “some markets drastically increased in some neighborhoods” and that “Sag Harbor Village prices jumped by 56.5 percent.”
When the economy nosedived in the fall, however, the housing bubble popped, sending property values plummeting.
“We are seeing significant changes in the value of homes,” Deyermond said of current housing prices. “In some cases the decreases are as high as 30 percent. But in some areas, like Hampton Bays, there is a greater decline.”
Because of state law, however, these market fluctuations couldn’t factor into the town’s assessments for 2009, but Deyermond said his team strove to make property evaluations as equitable as possible. After reviewing sales for the fall and winter of 2007, the town assessing unit met with the New York State Office of Real Property Services (ORPS) in March and refined the assessments for 4,400 properties. Overall, only 18 percent of the assessments increased, and many of these adjustments were based on renovations, quality of construction, land adjustments and neighborhood values.
At a town board work session held on Friday, May 1, Deyermond said he had been asked why the town didn’t lower assessments in light of the current economy. Deyermond pointed out that even if assessments could be lowered to reflect the present day real estate market, it would do little to alleviate the tax burden on local residents.
“If we reduce assessments by half, the budget will stay the same. The logical mathematical equation would be to raise the tax rate to raise the amount of money [the town needs],” explained Deyermond. Both Valente and Deyermond added that increased property assessments are not a revenue generator for the town, but rather are meant to ascertain equal property values in the town.
The assessment for next year will reflect the market values as of July 1, 2009 and show the decrease in property values. Town spending will most likely remain the same or go up, and this discrepancy worries Deyermond.
“I am concerned about next year. The values from 2007 to 2008 were generally stable, but property values have begun to erode out here,” said Deyermond. “The 5 percent tax cap limit has always benefited by the increase in property values.”
“If assessments drop from zero to 30 percent, we are going to have to make up for it somehow,” Valente argued.
For those residents who feel they were unfairly assessed, they will have the opportunity to plead their case May 19 — “Grievance Day.” The aforementioned Southampton homeowner plans to attend.
Deyermond and Valente are expecting a big turnout for this year’s Grievance Day. Last year, 7,000 letters were mailed and between 400 to 500 locals showed up. In preparation for Grievance Day, the town assessor’s office is dispatching representatives around the East End to meet with local residents. One employee will be stationed at the Sag Harbor Municipal Building on May 11 from 9 a.m. to 4 p.m. Grievance application forms can be downloaded from the town’s website and must be submitted to the assessor’s office no later than May 19.
“People are concerned. They seem to be questioning almost everything, but that is not a bad thing,” Valente noted.

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