Members of the Van Vorst Park Neighborhood Association plan to confront city officials at the group’s regular meeting on Feb. 20. Shock waves are going through downtown as residents realize the results of the revaluation could mean massive potential increases of property taxes likely to arrive in tax bills later this year.
In some cases, taxes on homes may increase as much as three times, and have the potential to force residents to sell their homes.
All cities must undertake a period revaluation process to align every property's assessment — which is its value on city tax rolls — with its true market value. The city is predicting a new municipal tax rate of 16.20 per $1,000 of assessed value.
The new estimated assessments on the properties reflect their market value as of Oct. 1, 2017 after surveys performed by Appraisal Systems, Inc., the company hired to perform the revaluation.
The new assessments, according to Mayor Steven Fulop, are based on projections of a modest tax increase for 2018.
“We’re trying our best to keep taxes flat, but we wanted to take a conservative approach,” he said.
The city expects the total taxable value of the city to rise from $6.2 billion, based on the last revaluation done in 1988, to about $26 billion.
Appraisal Systems is expected to have the complete list of reassessed properties by mid-March on its website at http://www.asinj.com/revaluation.asp?p=current&id=359.
‘I dodged a bullet’
Yvonne Balcer, a longtime critic of the city’s tax abatement policies, said one of the homes that saw the largest increase downtown had formerly been hers.
“I dodged a bullet,” she said. “I sold my home six years ago.”
She said her former home saw taxes rise by 300 percent, from $16,000 to $41,000 per year. The assessed value went from $210,000 to just over $2.5 million.
“That could have been me,” she said.
But many of her downtown friends still reside there, and have seen equally dramatic impacts.
“Some of them have spent their whole lives there,” she said. “Some are elderly and don’t have a lot of choice. They are going to have to sell their homes at a loss because nobody is going to pay them for what the house is worth with taxes that high.”
One residence on Washington Street has an estimated tax of $36,000.
Worst impacts will likely be felt downtown
The assessment company predicts that the biggest impacts will be felt downtown, while residents elsewhere in the city – in particular the Greenville and the southernmost part of the city – will actually see sharp declines.
Greenville, the West Side and The Heights, including areas such as County Village and Society Hill, may see decreases when the final numbers are released.
Community activists have long complained that residents in poorer neighborhoods have been paying too much in taxes, artificially subsidizing lower taxes for residences downtown.
Although the numbers throughout the city have yet to be fully released, Councilman Michael Yun predicts that Jersey City Heights – which was hit hard in the last revaluation in 1988 – will not be as negatively impacted as downtown was.
“The Heights are still an attractive place to move,” he said, suggesting that a trend that started well before the revaluation of residents moving from downtown to The Heights might increase as the results of the revaluation push people out downtown.
The problem is that downtown residents may not be able to sell their properties as easily as they might have before the revaluation.
In some cases, pending sales of properties were held up in order to see what the new taxes would be.
“This is bad news for everybody,” said one local real estate agent. “People looking to buy here don’t look at neighborhood by neighborhood, they’re thinking Jersey City, and this revaluation is saying Jersey City is too expensive.”
The city hadn’t done a reval since 1988 – 30 years ago.
On its website, Jersey City blamed former Gov. Christopher Christie for forcing the city to do a revaluation. Jersey City was one of four cities ordered to complete a revaluation by the end of 2017. But Fulop and others acknowledged that the reval was long overdue.
“This kept getting kicked down the road,” he said.
Jersey City has not done a revaluation since 1988. Real estate values of residential homes have skyrocketed partly due to the popularity of downtown since then, and the massive redevelopment that has made the area attractive.
Critics also blame Fulop for “kicking” the reevaluation down the road, noting that he canceled a revaluation that was authorized in 2013 by then Mayor Jeremiah Healy.
While the impact would still have been significant, some local real estate agents believe delaying it an additional four years made the situation worse because property values increased due to a massive development push under Fulop, and more and more people being priced out of New York.
His critics believe Fulop may have sought to continue to protect downtown because this was an area that he represented as a councilman and served as his political base for his election and later reelection.
These same critics ask if the current revaluation results were also delayed until after the election.
The state had required the city to complete the revaluation by last October. Had these numbers been released prior to the election, Fulop, who won with nearly 80 percent of the vote, might have seen a huge dip in his support downtown.
Poor neighborhoods may have been overtaxed for years
Fulop said this week the city may seek to do another revaluation next year to help readjust values of properties affected.
Local residents, who disagree with the new assessment, can file appeals, but this is not likely to dramatically change the results since the values of property – particularly in downtown – have gone up so much since 1988.
Councilman Daniel Rivera said the city doesn’t have a lot of options to provide relief to downtown residents, but encouraged people to appeal if they believe their values are inflated.
People have 45 days to do an appeal. New taxes take effect from Jan. 1, 2018 and the difference of new valuation will be reflected in 3rd and 4th quarter statements.
Most people who bought downtown have been underpaying taxes as property values rose.
High taxes and rising rents in Greenville may have contributed to an increase in homeless families. This was an issue raised by some of the candidates in last November’s municipal election.
Rev. Alonzo Perry Sr. predicted serious over-taxing of poor neighborhoods several years ago, claiming at the time that poorer neighborhoods were paying too high a tax while downtown paid too little.
“People were having a difficult time paying their mortgages, yet were also taxed higher than they should have been,” one real estate agent said. “While they are getting tax cuts now of $2,000 and $3,000, they have been overpaying for years and this has affected their daily livelihood. The higher taxes also affected market value of their property because the taxes at the time were seen as too high.”
Too little, too late to help
Fulop agreed the process was not perfect, but his administration tried to make it as fair as possible, and that residents will have to eventually accept the rates over time.
Most residents, he believes, will actually see tax relief.
While Fulop argues that people ought to pay the taxes on what property is worth, many older residents will never realize the benefits of the increased value because they had no intention of selling the property.
Critics claim that if the city had done revaluation four years ago as planned or even earlier some of the older resident might have time to sell their properties. With a flood of properties expected to go on the market all at once, many of the older residents are going to be stuck with massive payments during the last two quarters of this year. They may be forced to sell at a steep reduction to pay the high tax, and escape future payments.
And even residents who want to resell may find it difficult to get the full value, according to one real estate agent, because the taxes are so high and they will have to discount the price in order to make the sale attractive.
But even in neighborhoods were taxes remained stable or went down, the revaluation may have a negative impact, according to one real estate agent, because new residents may not see full benefit, since the perception of increased taxes in Jersey City may discourage new residents from moving into other more affordable parts.
Also the flood of residents that may be fleeing downtown to places like The Heights may cause rents and cost of purchasing homes rise.
Poor may be pushed out of poorer neighborhoods
Jessica Hellenger, a community activist and former council candidate, said people fleeing downtown could create issues in Greenville.
“I foresee a huge demographic change for the Greenville Bergen Lafayette area. The people who will no longer be able to afford downtown will be moving this way,” she said.
Greenville is made attractive by the Hudson Bergen Light Rail line that runs from downtown Jersey City to Bayonne, connecting the southern portion of the city to other transportation such as the PATH and ferries.
Councilwoman Joyce Watterman said she intended to hold meetings with the community in an effort to minimize the impact of this change of demographic and to keep rents from soaring as landlords seek to adjust rents to reflect the more competitive market.
Watterman also said any tenant whose rent increases because landlords claim taxes have risen due to the revaluation should take a closer look at what the property is actually being taxed. In some cases, landlords may be claiming a tax increase, when actually their taxes have decreased.
Al Sullivan may be reached at email@example.com.