DanL wrote:

enough squandering of tax payer money on bogus lawsuits. jersey city now must pay $1m plus interest and legal fees, eat the whole cost of the now worthless reval, eat the city's own legal expenses of over $300,000 and now go out and hire another reval company to start over.

we now will have a tax increase.

thank you jersey city council members for funding this fiasco.

Stringer wrote:

Judge rules against Jersey City in reval contract case

By Terrence T. McDonald | The Jersey Journal 
Email the author | Follow on Twitter 
on April 14, 2016 at 4:12 PM, updated April 14, 2016 at 5:45 PM

JERSEY CITY ? Jersey City has lost the breach-of-contract case filed by the assessment firm hired in 2011 to oversee the long-stalled citywide property revaulation, with the judge presiding over the case using the decision to slam Jersey City's "unfair" tax system.

Hudson County Superior Court Judge Francis B. Schultz ruled this afternoon that the city showed bad faith when Mayor Steve Fulop stopped the reval in 2013 and ordered the city not to pay West New York firm Realty Appraisal Co. the remainder of its $3.2 million contract.

The city must pay the firm $984,511 plus interest and attorney's fees dating to Realty Appraisal's October 2015 settlement offer, Schultz ruled.

Read more: http://www.nj.com/hudson/index.ssf/20 ... ty_in_reval_contract.html

neverleft wrote:
Jersey City mayor-elect orders end to citywide reval

By Terrence T. McDonald/The Jersey Journal The Jersey Journal
on June 25, 2013 at 3:05 PM, updated June 25, 2013 at 3:09 PM

Jersey City Mayor-elect Steve Fulop today ordered the West New York company conducting a citywide revaluation to halt work immediately, and said he would audit the firm?s work because of its ties to a former city business administrator.

Fulop, who attacked outgoing Mayor Jerramiah Healy on the campaign trail for ordering the reval, today called the process ?flawed,? saying in a statement from his office that it will result in tax hikes homeowners cannot afford.

Full JJ piece....

http://www.nj.com/hudson/index.ssf/20 ... e_reval.html#incart_river

Voyeur wrote:
It was sincerity, since you asked. Rare on these pages, but not extinct...

Voyeur wrote:
Quote:

bodhipooh wrote:

That's not how it works. The reason DT is underpaying is that, under the current system, all areas of JC (city-wide) are assumed to have appreciated at the same rate. Obviously, that is NOT the case. But, because that is the assumption, all current valuations are based on the value determined in 1988, adjusted for appreciation on a yearly basis, and so you end up with houses in areas outside of DTJC that are assumed to have appreciated at the same rate as a home in DTJC, so their taxes are assessed on that valuation, but that is obviously not correct.

Way to go Bodhipooh. What a succinct and cogent explanation of an unnecessarily convoluted issue. Well played sir.

bodhipooh wrote:

That's not how it works. The reason DT is underpaying is that, under the current system, all areas of JC (city-wide) are assumed to have appreciated at the same rate. Obviously, that is NOT the case. But, because that is the assumption, all current valuations are based on the value determined in 1988, adjusted for appreciation on a yearly basis, and so you end up with houses in areas outside of DTJC that are assumed to have appreciated at the same rate as a home in DTJC, so their taxes are assessed on that valuation, but that is obviously not correct.

stateaidguy wrote:
"Listing of effective tax rates in NJ -

http://www.joeshimkus.com/NJ-Tax-Rates.aspx
JC's current effective tax rate is 2.4%. Newark is 2.48, Maplewood 3.1% and Montclair is around 2.9%

I wouldn't be surprised if the JC effective rate ends up close to 3%. If Fulop can't delay this we'll find out in 2018."


The "Effective Tax Rate" is also called the Equalized Tax Rate.

ETR = the tax levy divided by Equalized Valuation.

Using 2.1% or 2.2% is a reasonable way to estimate what taxes will be post-reval because if the reval is done correctly JC's General Assessment = Equalized Valuation.

However, don't assume the ETR will stay 2.1%. If JC's Equalized Valuation increases by more than the tax levy the ETR will decrease.

SOS wrote:
I wouldn't be surprised if the JC effective rate ends up close to 3%. If Fulop can't delay this we'll find out in 2018.

dr_nick_riviera wrote:

I'm also curious where this 2.1% number is coming from. Isn't the tax rate derived from some arcane formula, the result of which changes year after year? If so, wouldn't it stand to reason that the percentage of assessed value people will pay would actually be 2017's tax rate (whatever it comes out to be) and not 2.1%?

bodhipooh wrote:
Quote:

Voyeur wrote:
Several folks here have said that 1/3 will see tax increases, 1/3 stay flat and 1/3 see decreases. They've also said that the net amount of taxes collected by the city will remain unchanged. But this method seems antithetical to the reval's goal of ensuring each and every home pay 2.1% of its assessed value in taxes.

Hypothetically, say all the homes DT are paying just 1% of current value in taxes. All these homes are hit with a 110% increase in taxes to bring them up to the 2.1% level. Now lets say all the homes in the Heights, JS, GV and BL have at least retained the value they had at the last reval in 1988, so their 2.1% tax rate is still appropriate. This means their tax bill stays the same. In this scenario no one gets a tax reduction - all that happens is that the City raises a ton of new tax revenue from DT.

Folks on this thread have said homes in GV and the Heights are paying a disproportionate percentage in taxes above 2.1%. Is this actually the case? If I understand things correctly, for this to have occurred, these homes have to have a lower value today than they did in 1988 meaning that their current tax burden is northward of 2.1%.

I would have thought that almost every home in JC has appreciated at least somewhat since 1988 - even on MLK and Ocean Ave. Are their really any areas of JC where you will find a house assessed today at a lower value than it was assessed 28 years ago - and consequently paying more than 2.1%?

The point I'm trying to make is, just because DTJC is underpaying on its tax, it doesn't necessarily follow that the other hoods are consequently overpaying on property tax and are due for a tax reduction. The under-taxation of DT has no bearing on whether homes in Greenville are paying 2.1% of their assessed value or not - the relationship between the two is not causal.

That's not how it works. The reason DT is underpaying is that, under the current system, all areas of JC (city-wide) are assumed to have appreciated at the same rate. Obviously, that is NOT the case. But, because that is the assumption, all current valuations are based on the value determined in 1988, adjusted for appreciation on a yearly basis, and so you end up with houses in areas outside of DTJC that are assumed to have appreciated at the same rate as a home in DTJC, so their taxes are assessed on that valuation, but that is obviously not correct.

Let's use a theoretical example:

House A in DTJC
House B in Greenville
House C in BeLa

In 1988, House A was assessed at 100K, B at 50K and C at 70K. And, at the time, each of those homes were levied the same tax rate, which let's assume was 2%. That rate is completely made up, but it's go with it. So, House A was levied 2K in taxes, while B was assessed 1K and C 1.4K. Now, in today's market, House A is worth 1MM, but valued at about 600K. Their tax assessment is 12K (based on the 2% rate) but really they should be paying 20K. Meanwhile, House B is assumed to be worth 300K (the same 500% appreciation as House A) but really it is only worth 150K in the market. They are assessed 6K, when in reality they should be paying 3K. For House C, the house is assumed to be worth 420K, but really it is now worth about 250K. They should pay 5K, but are paying 8.4K based on the incorrect valuation.

The issue of why the reval is so overdue is that OVER 28 YEARS, the market is assumed to have appreciated the same across the entire city, but that is not the case. You end up with properties paying taxes on assessments that are completely out of line with the market.

BTW, in my example above the end result of a reval is that the effective rate would go down (which is a completely possible outcome for our reval) because the end result has to be that the city collects the same amount of taxes when all is said and done. So, using my example, the city needs to collect 26.4K in taxes which, divvied up among the current valuations, would yield a rate of 1.9% for all three houses. So, House A would pay ~19K, House B would pay ~2.8K and House C would pay ~4.7K.

Voyeur wrote:
Several folks here have said that 1/3 will see tax increases, 1/3 stay flat and 1/3 see decreases. They've also said that the net amount of taxes collected by the city will remain unchanged. But this method seems antithetical to the reval's goal of ensuring each and every home pay 2.1% of its assessed value in taxes.

Hypothetically, say all the homes DT are paying just 1% of current value in taxes. All these homes are hit with a 110% increase in taxes to bring them up to the 2.1% level. Now lets say all the homes in the Heights, JS, GV and BL have at least retained the value they had at the last reval in 1988, so their 2.1% tax rate is still appropriate. This means their tax bill stays the same. In this scenario no one gets a tax reduction - all that happens is that the City raises a ton of new tax revenue from DT.

Folks on this thread have said homes in GV and the Heights are paying a disproportionate percentage in taxes above 2.1%. Is this actually the case? If I understand things correctly, for this to have occurred, these homes have to have a lower value today than they did in 1988 meaning that their current tax burden is northward of 2.1%.

I would have thought that almost every home in JC has appreciated at least somewhat since 1988 - even on MLK and Ocean Ave. Are their really any areas of JC where you will find a house assessed today at a lower value than it was assessed 28 years ago - and consequently paying more than 2.1%?

The point I'm trying to make is, just because DTJC is underpaying on its tax, it doesn't necessarily follow that the other hoods are consequently overpaying on property tax and are due for a tax reduction. The under-taxation of DT has no bearing on whether homes in Greenville are paying 2.1% of their assessed value or not - the relationship between the two is not causal.

Voyeur wrote:
Folks on this thread have said homes in GV and the Heights are paying a disproportionate percentage in taxes above 2.1%. Is this actually the case? If I understand things correctly, for this to have occurred, these homes have to have a lower value today than they did in 1988 meaning that their current tax burden is northward of 2.1%.

dr_nick_riviera wrote:

I'm also curious where this 2.1% number is coming from. Isn't the tax rate derived from some arcane formula, the result of which changes year after year? If so, wouldn't it stand to reason that the percentage of assessed value people will pay would actually be 2017's tax rate (whatever it comes out to be) and not 2.1%?

Voyeur wrote:
Several folks here have said that 1/3 will see tax increases, 1/3 stay flat and 1/3 see decreases. They've also said that the net amount of taxes collected by the city will remain unchanged. But this method seems antithetical to the reval's goal of ensuring each and every home pay 2.1% of its assessed value in taxes.

Hypothetically, say all the homes DT are paying just 1% of current value in taxes. All these homes are hit with a 110% increase in taxes to bring them up to the 2.1% level. Now lets say all the homes in the Heights, JS, GV and BL have at least retained the value they had at the last reval in 1988, so their 2.1% tax rate is still appropriate. This means their tax bill stays the same. In this scenario no one gets a tax reduction - all that happens is that the City raises a ton of new tax revenue from DT.

Folks on this thread have said homes in GV and the Heights are paying a disproportionate percentage in taxes above 2.1%. Is this actually the case? If I understand things correctly, for this to have occurred, these homes have to have a lower value today than they did in 1988 meaning that their current tax burden is northward of 2.1%.

I would have thought that almost every home in JC has appreciated at least somewhat since 1988 - even on MLK and Ocean Ave. Are their really any areas of JC where you will find a house assessed today at a lower value than it was assessed 28 years ago - and consequently paying more than 2.1%?

The point I'm trying to make is, just because DTJC is underpaying on its tax, it doesn't necessarily follow that the other hoods are consequently overpaying on property tax and are due for a tax reduction. The under-taxation of DT has no bearing on whether homes in Greenville are paying 2.1% of their assessed value or not - the relationship between the two is not causal.

tommyc_37 wrote:
....., and there seems to be a bunch of units coming onto the market in the past 1-2 weeks, more than usual.

dr_nick_riviera wrote:
Where were you looking in Queens and how long ago? In the last couple of years, prices have really escalated. I'd still say compared to the "desirable" areas (LIC, Astoria, Sunnyside and possibly Woodside) I'd still say Queens is at least equal, if not slightly higher than DTJC. LIC and Astoria are certainly higher. Still gotta factor in the city tax you'll pay as well (and that money is as good as gone - you'll still get tax deductions for property tax).

Err... no. For brownstones and other properties currently paying effective rates of under 1%, the correction will be at least 100%, and in the most egregious cases the correction may be 200%. Simply put, some properties downtown are currently paying effective rates that are less than 1%, and when assessed the "correct" rate of 2.1%, their tax bills will be twice or three times as high.

This is not so accurate. I looked very closely at the markets in Queens and BK before moving to DTJC: it's definitely cheaper than the desirable BK areas (DT BK, BK Heights, etc) but DTJC was definitely more expensive than Queens. I chose to stay here because I do enjoy/prefer living in JC, even the nicer areas of Queens are super crowded, which is an issue for me (and, many others, I am sure) and because my commute is as good (i.e., short) as that of friends living in the nicer, closer areas of Queens.

bodhipooh wrote:
Quote:

dr_nick_riviera wrote:
How bad do you think a correction in downtown would be? 10%? 15% at the most?

Err... no. For brownstones and other properties currently paying effective rates of under 1%, the correction will be at least 100%, and in the most egregious cases the correction may be 200%. Simply put, some properties downtown are currently paying effective rates that are less than 1%, and when assessed the "correct" rate of 2.1%, their tax bills will be twice or three times as high.

Quote:

I'm thinking whatever correction happens, there's so much pent up housing demand coming in from NYC, any excess inventory would get absorbed quickly and the dip would be very short lived.

This is probably true.

Quote:

DTJC is still dirt cheap compared to gentrified areas of Brooklyn and Queens, even with today's prices.

This is not so accurate. I looked very closely at the markets in Queens and BK before moving to DTJC: it's definitely cheaper than the desirable BK areas (DT BK, BK Heights, etc) but DTJC was definitely more expensive than Queens. I chose to stay here because I do enjoy/prefer living in JC, even the nicer areas of Queens are super crowded, which is an issue for me (and, many others, I am sure) and because my commute is as good (i.e., short) as that of friends living in the nicer, closer areas of Queens.