Munjoy Hill residents had their fears confirmed Monday night that construction of large condo buildings and an increase in high-priced seasonal residences are pushing up property values.
“I’m not going to sugarcoat anything,” Tax Assessor Christopher Huff told about two dozen people who attended a revaluation forum at Portland Public Library. “The value of Munjoy Hill is vastly different today than it was back in 2004.”
The city’s last valuation was in 2004. A new valuation is underway now, Huff said, because Maine law sets a minimum assessment-to-market value ratio — or assessed value versus true market value — at 70 percent. Portland’s ratio is now at that minimum, and data shows a high inequity in assessed values.
“We have a regressive assessment in Portland,” Huff said. “Higher priced properties are currently assessed at lower rates than lower priced properties. That should not be, everybody should be assessed equally. That’s the goal of revaluation, to bring equity to our assessments.”
The revaluation is being conducted by Tyler Technologies using a mass appraisal process involving sale price comparisons and cost-to-build estimates for residential properties. The city has had 1,400 verified sales since 2017 that it is using to create models to apply to properties that have not recently sold.
New tools are also being used to refine and improve the accuracy and reliability of the valuation models. Tyler captured new street-level images this summer with a camera mounted in a van; new aerial imagery taken in May 2018 is survey grade, so measurements can be done digitally with an accuracy of within 6 inches, and the city’s data cards on each property going back to the 1950s were digitally scanned and analyzed and are publicly available on the city website.
Tyler overlaid the digitized building sketches in those files with the aerial photos to find discrepancies and flagged 2,200 properties with anomalies for new field measurements, which have now been completed, Huff said.
In addition, the city sent property owners surveys to provide detailed characteristics of their properties, and received 60 percent of those back, which Huff said was phenomenal. He said the city will continue to accept responses throughout the revaluation process.
Huff said that new valuations will be mailed to property owners starting next April, and that fiscal year 2021 tax bills that reflect the new values would be sent in August or September. He said people may challenge assessed values in informal hearings that are expected to be wrapped up in July 2020.
“We will have hearing sites set up around the city,” he said. “Everybody has the right to appeal the new value.”
Vana Carmona, a Munjoy Hill resident, asked how residents who live there full time and have for many years will be affected by large condos that are being sold at high prices as second homes or seasonal residences.
“Over 40 affordable housing units have been driven off the Hill because of these buildings,” Carmona said. “There is less and less to rent up there. I happen to own my condo and another one in the building, and I’m trying to keep that as something reasonable. If what you’re saying is going to happen, how am I going to keep that reasonable? I won’t be able to do it because of the property taxes.”
Huff said Gynt Grube, senior project manager at Tyler, has been “ripping his hair out” looking at sales on Munjoy Hill because so many do not make sense.
“In sales ratio studies you’re always eliminating your outliers” Huff said. “You’re getting rid of your lows, youre getting rid of your extreme highs. Those really crazy sales are invalidated.”
However, he said there are many of the sales on Munjoy Hill that do count in the sales ratio studies because they are considered “arms-length sales,” meaning the buyer and seller are typically motivated and well informed. These do not include short sales, foreclosure sales, or sales between family members or corporations.
“When we see the sale of a 1,200-square-foot ranch for $450,000, and when there’s a bunch of those sales, that essentially becomes the market,” Huff said.
He noted that an increase in value does not necessarily relate to an increase in taxes – because in any revaluation a third of property owners typically see their taxes decline, a third see theirs increase, and a third remain the same. People would see their property taxes go up only if their valuation increases more than the city’s valuation as a whole.
“There’s no doubt about it,” Huff said, “not just Munjoy Hill, (but) the Peninsula as a whole. The ratio of assessment to market valuation is a lot lower on the Peninsula than in the rest of the city.”