This article appeared in the Daily Gazette on May 6, 2010. I believe it was in response to an excellent opinion-editorial written by Mr. Robin White, appearing in the Sunday Gazette, May 2, 2010 titled “Owners can appeal assessments based on purchase price.”

My comments will appear throughout this article in this typeface. I believe the subject matter is especially important to the Schenectady Landlord, one with respect to the “percentage of property tax” that is incorporated into the rent. What is not mentioned, or at least clarified, is the fees that are applied to every property owner, including but not limited to trash, water and sewer.

 

City reassessments continue to shock some property owners

SCHENECTADY

BY KATHLEEN MOORE Gazette Reporter

 

Rob Gavel and David Lowry got a surprising letter from the city this year. Their assessment, which had gone up after the citywide reassessment last year, was going up again — by 78 percent.

Lowry said he was beyond surprised by the announcement. “More like shocked, actually,” he said.

Their house is now assessed at $320,000. They bought it five years ago for $114,000 and felt it was reasonably reassessed to $180,000 last year.

This time, they said, the change is beyond comprehension. The city did not explain why they were reassessed again.

They’ve done no renovations since the 2009 reassessment. And their next-door neighbor, whose house is virtually identical and semi-attached to theirs, is assessed at $148,000. She also has not done any recent renovations, but she added a third bathroom prior to the citywide reassessment, Gavel said. “Why is mine assessed almost double? It doesn’t make any sense,” Lowry said.

                The city’s revaluation was played to the property owners through this newspaper since its inception in 2006. The city’s assessor Patrick Mastro held what was called “informational sessions” at various neighborhood association gatherings during the years of 2007 and 2008. A slew of remarks, which could only be described as threats, were made by the assessor, causing him to be referred to as “The Mean Assessor.”

                I truly don’t know why these landlords are surprised. Nothing that the assessor did, or the Board of Assessment Review did, made any sense. In the City of Schenectady it’s all politics from the Mayor on down the line. People get to keep their jobs if they adhere to the political rules.

He’s already begun researching recent sales data to cite in his grievance, which must be filed by May 25. So far, he said, his research has convinced him that he would not be able to sell the North Ferry Street house for $320,000.

“There’s not a house in the Stockade that’s sold for over $200,000 in the last two years,” he said.

City officials have asked Assessor Patrick Mastro to direct all calls regarding Grievance Day to administrator John Paolino, who did not continue Mastro’s tradition of defending the assessments. Instead, Paolino said Lowry and Gavel should take their case to the Board of Assessment Review. “That’s what Grievance Day is all about,” Paolino said, adding that he welcomed grievances from all residents who feel their assessments are incorrect.

Another Stockade property owner is heading back to the Board of Assessment Review for a second time in hopes of reducing the assessments on his apartment buildings.

                I too had researched recent sales data but received the standard form in the mail by the Board of Assessment Review stating that I did not provide “sufficient information.” Pretty much everyone received the same form letter, which I am, and still am appealing to the court system. Paolino says “That’s what Grievance Day is all about?” I don’t believe that John Paolino lives in the City of Schenectady, just as Patrick Mastro doesn’t; Mastro lives in Latham.

                If property owners in Schenectady, whether landlords or not, are held to a different standard than the people who have direct control over your property, ie the assessor and the assessor’s spokesperson, how then can we ever be sure that they are working to make things fair? Paolino lives in Rotterdam, Mastro lives in Latham; are they basing their knowledge and experience on their home municipalities? The City of Schenectady is very different than these two towns. Already I find that I don’t trust them.

Last year, Robin White presented a substantial analysis of the Stockade’s reassessments, showing that houses sold during the housing boom had been reassessed to a much higher figure than those that did not sell, even if they were side-by-side. In some cases, similar houses located on the same block varied in assessment by $100,000 or more.

Yet the new owners can’t sell for the price they bought their houses for during the inflated real estate market. They argued that since the real estate market collapsed, it’s not fair to assess them at the price they paid at the height of the boom.

White argued the assessments were also clearly illegal. He said it was obvious the assessor used recent sales data to increase only the houses that sold, rather than all houses. That would violate a state law.

Robin White wrote an excellent piece that was published by the Daily Gazette on Sunday May 2nd. The article dealt with recent sales and the revaluation but it does affect anyone who wishes to file a grievance regarding their assessments. Mr. White showed that the methods used by Patrick Mastro were faulty and by showing that, anyone who has filed a grievance against the City of Schenectady should be able to show that because Mastro’s method was faulty there, they were faulty with other properties.

The city has refused to release or explain its formula for determining the new assessments. The formula was created by a contractor who asked the city to keep his work secret on the grounds that competitors could use assessment data to deduce his formula and sell it. Because of his request, the city did not issue “comparables” to residents preparing to grieve their assessment. Comparables are a list of properties the city believes are similar to the property in question. Given that information, residents can argue for a lower assessment if the comparable properties are dissimilar in any significant way. Without the list, residents are forced to start from scratch when they begin research for their grievance.

                The city’s refusal to explain its formula is illegal. All methods used by the city to come up with its revaluation data is public records and subject to FOIL (Freedom of Information Law) requests. The problem is that it would take an Article 78 submitted in Supreme Court to force the city to disclose. The next problem would be if the Article 78 was dismissed or put together incorrectly, there may have to be an appeal. All of these cost a pretty good chunk of change and I would bet that the city “banks” on that. The City of Schenectady will do what it can get away with, as long as they can get away with it.

White’s list of comparables was rejected last year by Assessor Pat Mastro because he included apartment buildings and single-family homes. The two property types cannot be compared, Mastro said last year. But White insists that his analysis proves the assessor made a basic mistake. “People got assessed on their purchase price, which is illegal,” he said. “They should recognize that they goofed on this.” He lost his grievances last year. This time, he’s hired an attorney to help him.

Until then, he’s losing money every month. He must use 27 percent of his rents to pay the taxes, up from 18 percent before the reassessment. That has wiped out his entire profit margin. “I can’t get that in rent increases,” he said. “All my profit is gone. I’m now paying the city for the privilege of operating here.”

                Twenty seven percent of the rents to pay taxes are not unreasonable. Many residential rental property owners are receiving (if they even receive it at all) Fifty Percent or more to go to the taxes. That’s because the taxes are oppressive in the City of Schenectady, and that’s why many two family home owners have split them up into four apartments.

                I have a two family and the tax (and fee) portion of the rents I can charge, when I get them (I’ve had several evictions and most certainly perform background checks of potential tenants) is more than fifty percent. What that means is that if the property taxes for the house are approximately $6,000 for the year, and it’s a two family house, in order for these taxes to be 25% of the rents charged, I would need to receive $1,000 for each flat in the City of Schenectady. Is that possible? No its not. So if I rent the flat for $600 per month, the taxes contained within the rents are 50%. That doesn’t include maintenance, mortgage or insurance.

                That’s why the assessments and the taxes are out of control within the City of Schenectady.

May 6, 2010 Daily Gazette page B3