StamfordCT

Valuing "excess" land

I've come across another interesting group of assessments, just down the street from those in the post below this one.  They are at 320,  334,  336 and 333 Stamford Avenue.  (These are all "70% values" -- divide each by 0.7 to get to the market value the assessor is assigning.)

• 320 and 334 Stamford Avenue are each 10,000 square feet (0.23 acre), and is assessed at $536,970;
• 336 Stamford Avenue is 20,000 square feet (0.46 acre), and is assessed at $574,420;
• 333 Stamford Avenue is 30,000 square feet (0.69 acre), and is assessed at $628,110.

So the first 10,000 square feet in this immediate neighborhood is assessed at $536,970.  The incremental 10,000 square feet is $37,450 more -- 6.97%.  The difference between the 20,000 sq ft property and the 30,000 sf property is $53,690.  These values prevail until one reaches the direct waterfront properties -- despite the fact that every non-waterfront property that has even seasonal water views mentions that prominently in every real estate ad.

When will Windermere Get Assessed?

Houses are for sale at 191 Erskine Road, with asking prices from $3.195 million.

Yet the only assessments, as best I can tell, are these:
191 Erskine  parcel 001-3112    1,211,839 sq ft  (27.8 acres)
2007 valuation $1,562,090
2006 valuation $3,032,460
Current Annual Tax Bill: $23,681

191 Erskine parcel 001-3113  1,973,268 sq ft (45.3 acres)
2007 valuation: $2,281,450 for land; $551,330 for building; $38,830 for outbuildings and extra features -- total, $2,871,610
2006 valuation $1,030,750 for land.
There are two buildings shown on this 2nd parcel:

1. Built 2007, 11 rooms (5BR, 4.2 baths), effective living area of 6,551 sq ft;  Grade "A"
2. Built 2007, 13 rooms, (4.2 baths), effective living area of 6,037 sq ft; Grade "A"

Current Annual Tax Bill: $43,534

193 Erskine Road, parcel 000-6782  43,560 sq ft (1.0 acre)
2007 valuation: $306,550
2006 valuation: $304,620

Adding together the total 2007 valuation, I get $4,740,250.  Divided by 0.7, to bring them up to supposed market value (a Connecticut law whose logic escapes me mandates assessments at 70% of true market value.  This should be abolished; it only adds confusion and obfuscation!), we get $6,771,786. 

If the first 2 houses sell for $3 million each, the remaining valuation will be ... what?

Puzzles in Stamford's 2007 assessments

I'm finding some puzzling things in the October, 2007 Stamford assessment database, and wonder how they might be explained.

Fixing Wages, and Fixing Housing Affordability -- for All of Us

By this, I mean fixing the problem of low wages -- wages insufficient to support an individual or a family in conditions we consider acceptable on a reasonable number of hours of labor per week. I don't mean minimum wage legislation, or living wage legislation, both of which I regard as well-intentioned but ultimately destructive for the community they intend to help.  I don't mean measures like the Earned Income Tax Credit, either.  It appears that people must jump through high hoops to get those dollars (which often seems to require professional advice, at a price), and then a significant portion of the money goes not to the wage earner but to his tax preparer/advisor, in the form of fees and interest.

Bob Herbert's 3/11 column, Sharing the Pain: The "Near-Poor"

Link: http://www.nytimes.com/2008/03/11/opinion/11herbert.html

It begins with the statement,

Now that the economic crunch is reaching those near the top of the pyramid, there is finally a sense that the U.S. is facing a real crisis.

The article goes on to talk about the large group of  "near-poor" in America -- the 60 million people who are "just one notch above the official poverty line," with incomes that range from $20,000 to $40,000 for a family of four.

We have always gotten a distorted picture of how well Americans were doing from politicians and the media. The U.S. has a population of 300 million. Thirty-seven million, many of them children, live in poverty. Close to 60 million are just one notch above the official poverty line. These near-poor Americans live in households with annual incomes that range from $20,000 to $40,000 for a family of four.

It is disgraceful that in a nation as wealthy as the United States, nearly a third of the people are poor or near-poor.

You can read the statistics, expressed in terms of income multiples of the Federal Poverty Guideline here.  I think you'll find them moving.

It isn't that I don't agree there is a problem -- readers of this blog likely know that  -- but must point out that defining the problem this way, as the authors of "The Missing Class" do, misses the point that $20,000 or $40,000 for a family of 4 in rural Alabama is very different from $20,000 to $40,000 in New York City or San Francisco, or any of our other major metropolitan areas, where the vast majority of us live. [See data about the cost of living in America's low-cost counties, and in America's major cities.]

Fortunes Made in Real Estate

Americans have a tendency to respect those who are "self-made men." This seems to include people whose fortunes have been made in real estate.  The latest example in the news is the outgoing governor of New York, whose father, Bernard Spitzer, reportedly has a $500 million portfolio of properties, most or all in NYC.

I have nothing against real estate developers in their role as developers.  They bring large amounts of money and multiple talents to bear to create new modern buildings on sites previously occupied by more modest buildings suitable to another decade or century. And when they build they generally create the venues in which dozens, even hundreds, of entrepreneurial visions can be made into reality, and where thousands, sometimes tens of thousands, of people can be employed in a single building.  Appropriate development of choice sites, served by existing infrastructure such as NYC's elaborate transportation system and things as prosaic as city water, sanitary sewers, stormwater runoff, and all the other systems that are paid for by we-the-people: schools, public safety, public health, libraries, courts, hospitals, etc., means that specialized work can take in the center of the central business district, conducted by people who come from a 360 degree radius.  It minimizes sprawl on the fringe, and makes the economy work more smoothly.

But there are other facets of the real estate business that I think are "opportunities for plunder" that should be restructured to serve the common good instead of the private good.  This involves a revision of our notions of what is right, what is just, what is rightly private property and what legitimately belongs to the commons.

Affordable housing -- for all of us. What policies promote it?

Link: http://www.sun-herald.com/Newsstory.cfm?pubdate=030808&story=tp1ch5.htm&folder=NewsArchive2

A front-page article in the 3/8/08 Charlotte (County, FL) Sun entitled "Not Affordable Enough" speaks to some interesting and important issues regarding Florida's housing.  A few excerpts:

The current downturn in residential real estate sales has created the closest thing to a buyer's market Florida has seen since the 1990s.

While that might be great news for a Northern couple looking to retire in Punta Gorda or Port Charlotte with their life savings, Charlotte County's median home price -- about $175,000 according to recent Florida Association of Realtors figures -- is still a barrier for many local wage earners ...

Despite North Port's reputation as a haven for working families, the median sale price in the Sarasota-Bradenton market remains about $260,000

Referring to recent problems in the housing market,

"It's a blip on the screen really, and in a year, we're going to be thankful that we did some investing in affordable housing," said Ron Thomas, executive director of Enterprise Punta Gorda, the city's economic development bureau. "When everybody says that there's plenty of affordable housing, we have to qualify that by saying that there is plenty of affordable housing for people who are in the 80 percent or above the median income. This doesn't have any positive effect for anybody in the 30 to 80 percent median income bracket."

"Even as low as (housing) has come down, it still might not suit firefighters, police, and school teachers. They're still struggling," said Bill Albers, Punta Gorda city councilman. Albers is the council's liaison to the Punta Gorda Housing Authority.

Assessments that favor the big landholders

It is apparently standard practice for assessors in some places to value large parcels of land very generously.  I'm not talking about special valuations for farms or forests (even if they are long-fallow and in areas where land sells for hundreds of thousands of dollars per acre).  Rather, I am talking about valuations which treat the portion of an owner's land beyond the minimum zoning size as if it were worth perhaps 10% of its real value.

This happens in fairly dense suburban neighborhoods and in places where much larger lots are the minimum.    

Downtown Sprawl, Property Assessments and Getting the Incentives Right

I live in small city within commuting distance of New York City. For the 32 years I've been here, there has been a 4.3 acre hole-in-the-ground within about 1/4 mile of the city's "100% location."  It is surrounded by a chain link fence, and bordered by a shopping mall, a hotel, some apartments and some office buildings.  It is within walking distance of a major railroad station and two interstate highway exits.   It is even identified in the city's assessment database as the hole in the ground.  It has weed trees and concrete-lined puddles.  I seem to recall that at least one person has drowned when their car ended up in deep water on the property.

When I moved here, the tallest building in town was 22 stories. Today, the tallest building is still that 22-story office building.  It sits a bit to the north of the geographic center of downtown.  We currently have under construction a 37-story luxury condo complex ... on 1/2 acre at the northwest corner of the downtown ... and a 39-story hotel and condo complex on 3 acres, solidly in the downtown area and close to the highway and railroad.

The Effects of a Phase-In of the Revaluation

The 2006 revaluation was phased in, in order not to overburden some people whose previous valuations had been low and had since risen. 

The phase-in was based on 80% of the old valuation -- which, if I 'm not mistaken was basically the 1999 valuations -- plus 20% of the 10/1/2006 valuation.  The correctness of the new valuation was barely considered.  We stuck mostly with data we knew to be seriously out of date

The 2006 valuation had its flaws, the most prominent of which was that it undervalued commercial property.  But it accounted for the huge appreciation in certain neighborhoods -- those which have access to Long Island Sound in particular -- and certain kinds of properties -- former single-family homes that have been subdivided into multifamily  rentals until the owner can sell them as teardowns.