A property revaluation, or “reval,” is in the works for Hoboken. The last time that Hoboken attempted to reassess people’s homes so they would pay taxes at the current market value, the issue proved so controversial that it made the New York Times.
In a “reval,” the city hires inspectors to reassess homes so that they are all paying their fair share of taxes. Some people find out they are paying too much, while others who are paying based on old assessments find out they have been paying too little.
Perhaps that’s why no mayor has taken the risk of conducting another reval since back in 1988.
A city spokesperson said last week that Hoboken is preparing for a property revaluation after officials sent tax maps for review to the state Division of Taxation approximately two months ago.
“Revals” are politically unpopular.
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In neighboring Jersey City, the revaluation process is well underway, with inspectors going door to door to review homes and take measurements. As with any town, property owners there have expressed concerns that their tax burden will go up.
Once a hot topic – then nothing
Before the 2009 election in which Dawn Zimmer was elected mayor, a property tax revaluation was a hot topic, with residents from the group Hoboken Tax Revolt demanding that the next mayor address the issue immediately.
However, once Zimmer came into office, several prominent members of the group who were Zimmer supporters stopped vocalizing their demands.
Dr. Jonathan Metsch, the co-founder and former member of Hoboken Tax Revolt, was vocal in 2008 demanding a reval from the next mayor. Metsch left the organization after he took a seat on the Hoboken Municipal Hospital Authority, appointed by Zimmer.
He said last week that since he is a public official and no longer part of Hoboken Tax Revolt, he did not wish to comment for the story.
Juan Melli, a city spokesperson, said the city is looking into issuing a request for proposals for a firm to conduct a revaluation. In order for a successful revaluation to be completed, the city must have updated tax maps approved by the state.
In Hoboken, some homeowners, mostly those with older properties, are paying taxes on only about 31 percent of a property’s value, according to documents from the Liberty Board of Realtors. The goal of a reval is to have every property owner paying taxes on 100 percent of their property’s value.
County has not ordered one
A municipality can either complete a revaluation on its own, or the county can order one.
Donald Kenny, the Hudson County tax administrator, said last week that the county has not asked Hoboken to complete a reval. But when there has not been a revaluation in an extended period of time (more than 10 years), a city is often hit with many tax appeals on an annual basis. That means that property owners may have their own assessments done to prove that their taxes should be lower, particularly in a down economy. Then, the city will have to refund overpayments on a case by case basis.
“A reval would reduce the number of tax appeals because it would bring all of the properties to market value,” said Michael Schneck, a Livingston-based attorney who often works on tax appeals. “The benefit of a reval to the town is that it updates the ratable base. Many times, especially in Hoboken where there’s been new construction, [the city] may not have picked up all of the tax ratables. With a reval, they’ll pick up on improvements to homes, work without permits, and changes to the property.”
The politics of a reval
Revals are often politically unpopular, and politicians often try to shy away from them. Before 1988, the last revaluation was completed in 1970.
Joseph Hottendorf, the executive director of the Hudson County-based Liberty Board of Realtors, said a reval process would “make it fair for everyone” in Hoboken.
“If 20 percent of people in a new condo building go in for a tax appeal and 80 percent didn’t, that means that 20 percent of the people are paying lower taxes,” he said.
Hottendorf said that if a town hasn’t completed a reval, or if one is on the horizon, it becomes difficult for homeowners to sell.
“Nobody knows what their tax rate will be,” Hottendorf said. “The Realtor and seller have to say, ‘Oh by the way, there’s a reval.’ When [the prospective purchasers] ask what the taxes will be, the property owner won’t know.”
Hottendorf said he doesn’t blame the local municipalities for hesitating, but believes the state and county levels of government should force a revaluation of municipalities more often.
If towns have regular revals, such as every five to 10 years, residents won’t have to feel a sudden impact.
“Over a 20-year period a town could do two to three revals and the citizenry would not feel the impact of it,” Hottendorf said.
Right time?
But is it the right time for a reval?
Last April, real estate attorney Timothy Duggan of Stark & Stark told The Jersey City Reporter that during a rising or falling economy, a reval might not be appropriate. He said that in a perfect revaluation, there is a stable market where property values are not changing quickly over the course of the year. However, Duggan made those comments when a revaluation was about to begin in Jersey City last year. The market could stabilize by the time Hoboken begins the reval process.
The city can move along with the process of the reval as soon as the maps come back from the state and a company is hired to conduct the assessments.
Ray Smith may be reached at RSmith@hudsonreporter.com