How could this happen?
That was the question James Moranto wanted answered when he visited the Buttonwoods Community Center Tuesday afternoon for an appointment with a commercial property appraiser.
As the owner of the Back Street Bar and Grill on West Shore Road, he saw the valuation of his business property dropped $24,100 in the revaluation completed as of Dec. 31, 2012 to $509,600. He’s OK with that but not happy.
“You know what that means,” he said of the decline in valuation. “Taxes [the rate] are going to go up.”
But it’s the value of the adjoining vacant lot that he uses for parking that prompted him to make an appointment with Vision Government Solutions, the company retained to do the citywide statistical revaluation.
The lot is 11,250 square feet or about a quarter of an acre. Its value rocketed from $15,900 to $64,700. Nothing has changed on the lot since the prior revaluation, so Moranto is mystified why it would appreciate by 300 percent.
Could it be that commercial property on West Shore Road is in demand?
“If you know someone who wants to buy it, send them in,” he said.
Questions like Moranto’s were commonplace a decade ago when the state required municipalities to perform a revaluation every 10 years. At that time, valuation review hearings went on for weeks as more than 2,500 property owners sought explanations or contested assigned valuations. That has changed since the state mandated a full revaluation – one requiring appraisers to visit every property – every nine years, followed by statistical revaluations based on current sales every three years.
As of Monday, 170 appointments for residential property reviews had been held or were scheduled since valuation notices were sent to 28,000 residential property owners on April 19, said the city’s tax collector and assessor Ken Mallette. Those review hearings conclude on May 11.
With more frequent revaluations, Mallette reasons property owners “don’t get sticker shock” and they have a better idea of what the property is worth. As a result, the level of calls has dropped.
Evelyn Spagnolo, deputy assessor, also believes calls are down because the housing market is showing signs of picking up. Overall, she feels property values have increased since the end of last year.
“It’s wonderful for those whose primary investment is their home,” she said.
David Mackie, staff appraiser for Vision, would like to think that’s the case but he’s not sure things are turning around.
Mackie, who recently worked on revaluations for Providence, North Kingstown, South Kingstown and Jamestown, as well as being familiar with work being done in Connecticut and Massachusetts, said “Rhode Island is being hit the hardest.”
Of Rhode Island municipalities, he said Pawtucket is the worst, where residential property values and, in particular, multi-family dwellings dropped 30 percent. Warwick residential properties dropped about 10 percent in valuation since 2009.
While lower valuations can translate into lower taxes for some property owners, Mackie said about 20 percent of the reviews held in Warwick were for people who thought their valuations were too low.
“They’re mostly people who want to sell or refinance,” he said.
And there have been situations where people protesting the high value of their property have come away with an even higher valuation.
That’s not frequent, but it can happen when the appraisers discover they have made an error on the property description, such as learning that, instead of being built on a slab, a house has a basement.
As hearings are held in the community center with its big bingo board, some property owners, like Moranto, may think it’s just a matter of luck.
Mackie smiles at the suggestion.
“One reason we don’t have hearings on Wednesday is because they have bingo day,” he said.
Mallette said yesterday that the methodology used in valuing commercial lots that are a part of a business is to look at the collective value of all parcels, which can explain, when looked at independently, how the lot could seem overvalued.