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Portability of Regression Models
No full textAn examination of the use of model specifications, transformations or coefficients from one market to another. Much of the discussion is around the uniqueness of each market, and the need to understand how the relative importance of attributes, market dynamics and the relationship between model constants and adjustments make present difficulties in using model written for one market in a different market
Legislative Impacts on Accessory Dwelling Units
No full textValuing Accessory Dwelling Units can present a number of challenges for the assessor. This workshop will provide insight into Ontario’s experience including legislative changes regarding housing, the potential downstream impact to the livable unit and changes in valuation analysis and application
Bringing Market Analytics to Life
No full textMarket activity in many jurisdictions continues to present challenges in monitoring and forecasting. During this session, learn about the experience in Ontario, Canada with building a customized Market Trends Dashboard to support valuation staff across the organization. Providing the assessor with an interactive dashboard that leverages Amazon Web Services facilitates market research and stakeholder engagement through sales trends analysis of a number of property types
Prosecuting and defending an office market tax appeal in a period of market upheaval
No full textThis session covers U.S. office outlook in 2023, recognition by assessors of changes in market conditions, prosectution and defense of tax complaints for office buildings in an uncertain market, and the sales and income approaches to value
Comparative measures of property tax equity in Suffolk County, Massachusetts
No full textA nationwide analysis of property tax assessments and sales data over a ten-year period, by Christopher Berry of the Harris School of Public Policy at the University of Chicago, found pervasive regressivity in assessments and therefore in the property taxes that incorporate these assessments. This challenges the assessment community to critically examine the valuation process for property tax purposes. The nationwide analysis covers 2,600 counties over the period from 2007 to 2017, and its associated website provides standalone reports analyzing data for each county in the national study. This paper examines 2017 data for Suffolk County, Massachusetts, provided by the state department of revenue (DOR), and finds mixed results in comparing its findings to those in the standalone report for Suffolk County on the Harris School website. It supports the conclusion that lower-priced properties are assessed at higher levels than are higher-priced properties but not to the same extent. The Harris School study appears to mismatch the year of sales and the year of assessments in its analysis of Suffolk County, which can distort its results. Most significantly, the impact of tax exemptions, specifically homestead exemptions, appears to have been omitted from the Harris School study. The comparative analysis demonstrates that such exemptions when properly structured and targeted can lead to a progressive property tax incidence, as they have in Suffolk County
Hotel property tax issues
No full textHotel properties differ from other forms of real estate in many ways which, in turn, result in numerous tax assessment issues for municipal property assessors and appraisers. “Hotels” or hospitality related properties include a mix of uses, including lodging, food and beverage service, meeting rooms, recreational and fitness facilities, etc. The hotel industry is a complex and volatile business. Assuming competent management, a lodging facility’s success is dependent on its identity and/or brand affiliation, design, the location/quality of the real estate, and furniture, fixtures, and equipment (FF&E). Unlike other forms of commercial real estate, lodging facilities do not benefit from longterm leases or credit tenancies. Since the pricing of room nights continuously changes, hotel profits are highly susceptible to immediate and in many cases dramatic uncontrollable external forces. Examples include geopolitical changes, financial crisis, energy costs, terrorism, crime and civil unrest, climate and environmental factors, health crisis and pandemics, and government reforms and policy changes. The purpose of this paper is to provide factual information relative to (1) how operating hotels are managed, priced for sale, and properly appraised based on market behavior, and (2) to expose appraiser myths and valuation methodology involving the going concern premise that does not reflect market behavior but is often used in appraisals prepared for owners of hotel real property specifically for tax assessment appeal purposes
Homing in on tax evasion: Homestead fraud in the Florida real estate market
No full textLocal Florida governments are primarily funded by ad valorem property tax revenues. State law provides preferential tax treatment to primary resident homeowners, as opposed to the owners of rental properties or winter homes. This “Homestead” exemption reduces the assessed taxable value of the property, and caps annual increases. By Florida statute, a home cannot legally be simultaneously Homesteaded and rented out long-term. We combine January 2022 Trulia.com home rental data with county appraiser Homestead status data and find that larger rental homes are more likely to be Homesteaded. Our results suggest that Florida municipalities may be able to recoup needed funds, which could go towards education and other important priorities, by tightening Homestead tax rule enforcement. We also consider the possibility that income disparities may be exacerbated by Homestead fraud, and that the system lends itself to inherent fragility akin to the problems that precipitated the 2008 housing crash
Transitioning out of capped property assessments: The value recapture approach
No full textAssessment caps lead to inequities because the same growth limit is applied to high and low growth properties. High growth properties that fall under the cap have assessments artificially lowered relative to prices resulting in lower effective tax rates. This paper presents a method to transition out of a capped assessment system where instead of stipulating the percentage increase in assessment, this paper explores limiting the rate of value that can be captured, defined as the difference in the market value and the capped assessed value. Unlike the assessment cap approach which benefits high-growth properties, this approach conversely shifts the burden to high growth properties that have benefited from the cap. With the value recapture approach the burden is shifted to properties that have benefitted most from artificially low assessments, are furthest from market values, and therefore have more value to recapture. The inequities resulting from capped assessment are well known and can be of two forms – horizontal and vertical inequity. Using New York City data we use Gini measures of equity to show that the value recapture approach converges to an equitable state faster than when assessment increases are capped. The measure of vertical equity is the Modified Kakwani Index whereas the index for horizontal equity is introduced in this paper for the first time as the ratio of the within-group Gini to the citywide Gini. The within-group Gini is the weighted average of the subregion Ginis. Horizontal equity exists when all the subregions have the same Gini as the citywide Gini, or that the ratio is one. With NYC data, we show that it is possible for the ratio to be at 1 within five years of transitioning out of capped assessments
Finding the Secret Sauce – the Portability of Regression Models
No full textAn examination of the use of model specifications, transformations or coefficients from one market to another. Much of the discussion is around the uniqueness of each market, and the need to understand how the relative importance of attributes, market dynamics and the relationship between model constants and adjustments make present difficulties in using model written for one market in a different market. This presentation is being given at GIS/VaalTech 2023. The slide deck and speaking points are available upon request