Steven H. Foskett Jr.
| Telegram & Gazette
WORCESTER – Mary Taubert and her husband have owned 71 Francis St.
When they got married, they lived on the first floor. The Tauberts now live in Millbury but still rent the three-decker on West Boylston Street. If something breaks, they go to the house and fix it. They shovel when it snows and they mow the lawn. Taubert said she was trying to keep tenants’ rent stable because they were good tenants.
“When you get a good tenant, you don’t increase the rent,” she said.
However, the Tauberts are now facing a substantial increase in their tax burden on city property. If they pass it on to their tenants, it would work out to around $ 43 per month per floor, she said.
The Tauberts will think long and hard about this after recently receiving their tax bill for fiscal 2021. Though city council passed a number of tax rates late last year that actually saw the residential tax rate drop slightly, the couple’s triplane was valued at $ 107,000 more than in fiscal 2020, which meant a bit of a sticker shock for this year’s tax bill.
Taubert said, especially after last year and all the stresses and strains of the pandemic, it seemed like bad timing to hit property owners with such drastic valuation increases.
“I don’t understand why you have to do it in such a big jump,” said Taubert. “We were not warned.”
The city has seen a hot housing market, particularly in the three-family and multi-family sectors, and rising ratings in recent years reflect this.
For the 2021 financial year, the city set an all-time high for its overall rating. With the exception of commercial property, which is likely due to the COVID-19 pandemic, all residential sectors are on the rise.
According to the city, Francis St. has an estimated valuation of $ 363,800 for fiscal year 2021 71. It was estimated at $ 256,400 in fiscal 2020 and US $ 241,700 in fiscal 2019.
The triplane across the street at 64 Francis Street also saw a huge jump from $ 263,100 in FY 2020 to $ 369,700 in FY 2021.
Elsewhere in the city there have been similarly drastic jumps. The estimated valuation of 21 North Woodford St. on Vernon Hill increased from $ 270,400 in FY 2020 to $ 357,600 in FY 2021. The valuation for 17 West Boylston Drive, near Greendale Mall, increased from $ 299,800 in FY 2020 to $ 383,900 in Fiscal year 2021.
City appraiser Samuel E. Konieczny said that in Massachusetts appraisers are required to value real estate 100% at fair present value. He said triplane had regularly sold in the $ 400,000 to $ 550,000 range across town.
Konieczny said for fiscal 2021 his office was relying on an analysis and statistical model period for calendar year 2019. He said sales prices of three-family houses were significantly higher than the estimated value during this analysis period.
Konieczny said during this time the city is viewing market-rate sales with willing buyers and willing sellers, not properties that have been sold to family members or friends. It was real estate that was on the market and could be bought by several people.
Konieczny said that based on this 2019 sales analysis, ratings for three-family homes in the city reflected an average market adjustment of 18.8%. Because the averages are what they are, some properties have taken bigger leaps than others to achieve that 100% present value. That means some property valuations can go up by $ 100,000 or more, by $ 50,000, or $ 60,000, he said.
Joan Crowell, director of the Accurate Worcester Assessments on Real Estate coalition, said at first glance that the valuation jumps of more than $ 100,000 seemed unfair and uneven. She noted that the triplane at 70 Plantation St. is valued at $ 325,900 for FY 2021, an increase of $ 37,000 from FY 2020. It has more bedrooms than 71 Francis and 64 Francis St. – the house across from the Tauberts – and recently sold for $ 365,000.
“The numbers don’t make sense,” said Crowell. “This property has increased $ 37,900 and the other over $ 100,000.”
Konieczny said ratings are always a reflection of the market, never a prediction. The evaluated values for a specific fiscal year provide information about what happened during the analysis period.
Despite the raised estimate to $ 363,800 at 71 Francis Street, he argued that the owners could now sell the home for more than that.
Taubert said she understands that the hot real estate market means it’s a good time to sell, but she said they have no plans to do so, so they simply have to endure the higher tax burden that comes with the added valuation.
Konieczny agreed that those owners who cling to their property during this market absorb an increased tax burden as the property’s value increases. But on the other hand, said the appraiser, it’s a good time to sell; Real estate is selling more than ever.
He said he had already started analyzing the 2020 calendar year and it showed that the Worcester market was still on an upward trend despite the pandemic. He believes the values for three families haven’t increased as much as they did in 2019, but overall that’s still a positive trend.
Konieczny said some of the driving forces behind the hot rental property market are that individuals or companies are buying it as investment property with typically low interest rates that help drive sales.
He said auditors should not consider socio-economic factors when calculating scores. He said he understood the trouble and frustration out there, but it was his job – and it is the law – to ensure that the valuations reflect fair cash value. When a property comes on the market and sells close to what it was valued for, it proves that the valued value is correct. He said his office doesn’t base any of his judgments on any hypothesis or emotion or feeling – just facts through statistical analysis and modeling.
“Unfortunately, the estimated value and taxes owed are not in proportion to solvency,” he said.
One area where Crowell and Konieczny agree is that local residents who believe their property has been overrated should apply for a discount, although they also agreed that filing a discount doesn’t necessarily mean that it is granted.
Konieczny said owners will have until February 1 this year to apply for a discount. He said they can file online and apply for a vehicle excise tax reduction online too.
He said residents who are over 70 years old as of July 1, 2020, who own a single-family, two-family, three-family or condominium and meet certain income and wealth thresholds, can be exempt from the tax.
Crowell and Konieczny both warned that just because someone applies for a discount does not mean they will get it; Crowell said homeowners should be ready to show comparable sales as of calendar 2019 to support their claim.
Whether rising appraisals or budget hikes are driving up tax burdens, Crowell said the big picture is the city needs to do a better job and cut spending, within its means.