Reval Evaluation

A very-informed reader who is also a resident of and property owner in Trenton has written to share observations about the property revaluation process that has been under way in the City, as has been discussed on this space a few times over the last few months. This reader does not wish to be identified or closely described , citing likely difficulties at work should that happen. Let me simply say that I can describe the person as professionally qualified to offer informed opinions about the matter of New Jersey state and local regulations, including their drafting, interpretation and enforcement. These qualifications are current, ongoing and highly relevant to the discussion of how accurately the citywide property revaluation has been performed by the city’s contractor, Appraisal Systems Inc. of New Jersey (ASI).

My reader’s judgment is that ASI’s process is fatally flawed. Not only does the reader believe there is ample opportunity to appeal the new valuation of the reader’s own property in the city, it is the reader’s belief that were suit filed in NJ Superior Court against the city’s tax assessor and the Mercer County Tax Board (for whom the Trenton Assessor’s office effectively works) for not complying with the New Jersey Administrative Code, the entire citywide process would likely be thrown out and the City would be compelled to start over. This judgment confirms my amateur’s take on the matter, as described in my first piece of January 18, and a followup piece on January 26.

I’ll provide a few specific examples of where my reader points to specific flaws in ASI’s process. But I want to begin by explaining, as best as this amateur can poorly do, my reader’s main point about Trenton’s ASI process, and how best it can be fought.

According to my reader, case law in New Jersey has established that individual appraisals are deemed to be accurate and fair based on a “Presumption of Correctness.” That is, the information and data compiled for one individual property is assumed by the courts to be as correct as any other; that is, correct. Individual appeals on property valuations are most often unsuccessful, because it is so difficult to fight the “Presumption of Correctness.”

Where the reader believes ASI is vulnerable is to an overall attack on its overall lack of compliance with NJ state regulations. Specifically for starts , Title 18, Chapter 12, Section 4-8 of the NJ Administrative Code (NJAC) (page 16 and following of the PDF document at this link, the section titled “Standards for revaluation”).

The reader identified a number of deficiencies of required information on the property record card pursuant to N.J.A.C  18:12-4.8 (a)8. Whether due to ASI’s sloppiness, or to lack of knowledge of the appropriate regulations, the reader won’t say. In order to preserve the reader’s confidentiality, I won’t cite the specific violations alleged  for the reader’s property.

But I will here cite two examples as mentioned by the reader that affect specific neighborhood valuations and those done city wide.

First, my reader describes how according to State law, municipal assessors are required to reassess neighborhoods after natural disasters. As those residents and property owners in Trenton’s Island and Glen Afton neighborhoods will vividly recall, those areas suffered several floods earlier in this decade, specifically including two instances in 2011 that saw neighborhood-wide evacuations of The Island after Hurricane Irene and Tropical Storm Lee.  Not only were revaluations not done following those floods half a dozen years ago, but ASI’s preliminary revaluations of The Island seemingly fail to reflect the neighborhood’s ongoing extreme vulnerability to the whims of the Delaware River. How else could individual revaluations of individual properties there show increases of 37%, 42%, 127%, and 180%, as I observed in my first piece on the subject, two months ago? Only folks blindingly ignorant of the recent natural history of The Island and Glen Afton would argue for those kinds of increases.

Similarly, my reader explains how data collected for use in the city’s Master Plan and citywide planning documents should have been used when doing a citywide evaluation. In the case of Trenton, that means many of the documents which can be found on this page of the City’s website. These include  docs prepared over the last few years for the Trenton250 Master Plan effort, such as the 2015 “Issues and Opportunities Report,” the “Laying the Foundation for Strong Neighborhoods” report also from 2015, and the “City Profile Report” of 2014. All of these documents, including many other draft elements of the Trenton250 Master Plan were certainly available to ASI and the City Tax Assessor’s office throughout the revaluation process. Taken together, these documents draw a picture of Trenton as what it is, a community under social, economic, political and educational stress. In order to formulate a plan to deal with these myriad stresses, as I described in this space last August, the City of Trenton in its draft Master Plan intended to designate the entire City as a “City-Wide Area in Need of Rehabilitation.”

This designation, which you will recall would among other effects label the entire City of Trenton as “a blighted area,” will apparently allow the City to seek a range of redevelopment tools in its attempts to deal with the City’s many, many intractable problems. However, the use of that designation raised many issues for me back in August. In a letter sent to the City’s Planning Director Jeffrey Wilkinson, I wrote in part,

I can guarantee you that if we were prospective homeowners from outside the City or State looking today on or, and we saw a notation on a listing to the effect that “the property is located in the Trenton Area in Need of Rehabilitation,” and found out that such Area encompassed the entire City and is legally considered a “blighted area,” well, we would pass over the entire City without a second thought. Regardless of the beauty of a specific house or neighborhood, such a designation will affect the value of that house and neighborhood. Speaking as a property owner, what will that do to the value of my investment?

My concern then is the same one I have now. The efforts of the City’s Planning Department, and the documents it has created in support of those efforts – documents and their underlying data which should form much of the basis of a citywide property valuation effort such as one undertaken by ASI - effectively work to negatively impact property values in the City

In short, as my reader suggests, these efforts can simply not be reconciled with the results of ASI’s property evaluation preliminary  reports. Reports which, as described here, show -probably pretty accurately – that residential values citywide may be collectively flat, but which also contain many thousands of individual property increases of 50% and more up to 438%, and massive neighborhood increases such as Hiltonia’s 32% and my Cadwalader Heights 39%. And reports containing a commercial average citywide increase of 70%.

There is a stark dissonance in these reports that cannot be explained away. The City of Trenton cannot say on the one hand that the entire City is a “blighted area” in need of rehabilitation throughout the City limits – with inevitable impact to the City’s market image and market values, and on the other hand say the market value of the City’s commercial properties has increased 70% over the last couple of decades.

I intuitively felt this dissonance when I first saw these ASI numbers in January, and knew something had to be wrong with the process. What I now believe, thanks to one well-informed and knowledgeable reader, is that the ASI process is fundamentally flawed due to its failures in compliance with State regulations and statutes.

So, what is to be done?

As I mentioned at the top of this piece, my reader tells me that individual property appeals will likely not be entirely successful, due to the “Presumption of Correctness” principle.

Instead, my reader suggests the best approach to be a collective one. Since it is not likely to be able to identify the person, I will quote my reader: “The city attorney or council attorney should consider looking into the work ASI did and appeal to the Treasury and Department of community affairs. City council could draft a resolution with a vote of no confidence in the revaluation if the attorney backs up my claims. This revaluation in its current form will be very detrimental to the business community.”

And, “An effective strategy at this point I believe would be to draft a letter from the council members and any concerned citizens addressed to the Treasurer of NJ and the Director in charge of municipal taxation, copying Mercer County, Trenton Mayor, and Tax Assessor. Probably a good idea to copy press as well. The letter would include sample PRC’s from ASI and noting the deficiencies wrt the regulations in my e-mail. Plus any other arguments deemed important. This would most likely result in a hold on the revaluation because all the subordinates of the Treasurer (director, County) will need to review the ASI work product deliverables so they don’t look incompetent.”

And, there is also the threat of litigation, which could be best taken as a group or groups of property owners suing the city assessor and/or Mercer County tax board, each demonstrating their own revaluation processes and failures in regulatory compliance. Let’s table that alternative, for now.

My reader’s suggestions rely on City Council to play an active role in this process, to represent the interests of property owners in the City, Residential and Commercial. Since January, I have written to Council – collectively and in some cases individually – with my concerns. I’ve made many of the arguments and cited many of the numbers that you’ve read in this space. I’ve appealed to them to oppose the ASI reports and preliminary evaluations, both as our representative and as individual property owners. I pointed out that several of them are facing significant prospective increases in their valuations. They have as much at stake as the rest of us.

It won’t come as any surprise to you, dear readers, that I have received almost no reply. Apart from one or two individual members of Council writing back with general expressions of nonspecific support, Council has declined to respond to my concerns.

That doesn’t mean that you shouldn’t contact the Members with your concerns. I ask you all, if your experience with ASI has been less than clear, if the preliminary evaluations you’ve received for your property don’t seem credible, if your neighborhood as a whole is being evaluated sharply upwards, if you live in Glen Afton or The Island and your new valuation doesn’t reflect that you live in a pretty active flood zone, WRITE TO CITY COUNCIL. CALL CITY COUNCIL. CONTACT CITY COUNCIL.

Here’s the City of Trenton Contacts page, with email and phone links for each and every City Council member. Let your voice be heard.

Let’s see how things develop over the next couple of weeks. Until then, this matter is To Be Continued…

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