Revaluation Forges Unlikely Alliances

I must confess that I missed the last 15 minutes of the long evening meeting with J.F. Ryan at Village Hall on August 17th. By 11:40 pm I thought I had heard about all I needed to know. But I was wrong. I later found out that as the meeting drew to a close, one speaker called for Village Assessor Nanette Albanese to be replaced. In a rambling speech that I watched on my computer Albanese was charged with having "a Machiavellian approach to taxes," losing "her objectivity," and destroying "$1 billion in wealth in this community over the next three years." The speaker claimed that "The revals have destroyed the market" and "fractionalized the community," and called for Albanese's resignation and the immediate search for a new assessor.

Those comments brought a loud round of applause from the audience.

But I wondered if the people in the audience knew the full backstory of the accelerated timing of the second revaluation and the role of the group they were cheering in having it done?

At the time of the first revaluation in 2014, several members of the Heathcote Association raised serious concerns about Tyler's methodology and argued that the revaluation had shifted too much of the tax burden onto owners of large homes. Before the 2014 revaluation, many of these homes had not been reassessed for decades and there were residents with expansive homes on more than two acres paying lower taxes than owners of homes on half-acre plots. Some enjoyed advantageous tax rates for years at the expense of newer families moving into Scarsdale. Tyler Technologies was retained to conduct the first revaluation and to inspect each home in the Village. They used a comparable sales approach to identify similar homes that were sold and reassess each existing parcel.

At a meeting in May 2014, after Tyler had released the new assessments, members of the Heathcote Association were angry. Here are excerpts from comments in 2014 that sound very similar to complaints about the 2016 revaluation.

David Bunzel said that the 40 homes in the association have been "hardest hit" by the revaluation and that the revaluation was "promised to be fair and transparent" but "it has been just the opposite." He inferred that these homes had been singled out and wanted to know "what instructions were given by the assessor's office to Tyler in terms of targeting and valuing older homes or homes on larger acreage," stating that "homes on larger lots appear to have been targeted for assessment increases well above village-wide averages." He also said that "outliers" were used as comparables ...mostly teardowns."

Ron Parlato said there was "confusion and misinformation" and that the revaluation was done without "transparency and accountability." He proposed a one-year delay.

"What were the checks and balances?" Steve Rakoff asked? He claimed that overstatements on the data cards were made to coerce inspections from residents who had not permitted the inspectors inside. He said "24 valuations went up and 3 went down." He said, "On Morris Lane there were 30-50% increases. There may have been a mistake and land may have been overvalued. These are irregularities from a model that is not carefully thought out." He then questioned the assessor's role and said, "Was there over-involvement?"

At a subsequent meeting on November 19, 2015, this same group brought large spreadsheets to demonstrate how homeowners on smaller parcels were receiving "discounts", while those on lots over an acre were subsidizing them.

They questioned Tyler's process and said they were "Concerned about how the math model was derived. They claimed, "There was an imbalance in their model." Turning to J.F. Ryan who Rakoff supported to do the second revaluation, he said, "The hope of everyone here is to get a fair shake and get it rebalanced so there is equitable assessment throughout the town."

They presented data of recent sales by lot size, and attempted to show that small lots were severely under assessed. About Edgewood they said, "If you have 3 kids in school you are costing the district $70,000 a year and we're collecting $20,000 in taxes so it's a bargain to live here." They argued that Greenacres was discounted 19%, Fox Meadow 21% and small homes in Heathcote homes were selling at 36% more than their assessed values.

About Tyler Technologies they said, "The model was flawed. There are tremendous inconsistencies with the first reval." They hoped Ryan would "get this straight now.," saying, "Real estate needs to be assessed in an equitable manner."

Rakoff objected to the Village's plan to follow NYS recommendations to do frequent revaluation to keep the tax roll at market value. He asked for a "static" assessor's office and said he objected to periodic revaluations as they upset the market.

These complaints, along with shifts in the real estate market, caused the trustees to consider doing a second revaluation in two years rather than four. Market forces had caused a regional slowdown in the sale of high-end homes, while buyers competed to get lower priced homes in the $1 million range. At the time, realtors and some homeowners argued that the reval was the cause of the slowdown, but sales data later showed that this was a regional phenomenon with luxury homes sitting on the market in Westchester and Connecticut. As the Village had received so much criticism about Tyler, they selected J.F. Ryan to do the job. He had overseen the first revaluation and said he would use a direct market model to derive valuations.

So, two years later, at the meeting on August 17, 2016, I found it ironic that many of the applauding homeowners were those that the Heathcote Association claimed were previously getting "a discount."

To me it looks like many of the high-end homeowners got the reductions they wanted, causing hundreds of others to foot the bill. So why was Rakoff now posing as the leader of the aggrieved small homeowners and asking for the assessor's head? And why were the folks who were now footing his tax bill giving him a hand?

Frequent revaluations appear to be on the horizon for Scarsdale. And no doubt, each time one occurs, some will be pleased and others upset at the results. I guess we're just going to have to get used to it.