Last week when we were here together, we had some discussion about the general issue of accountability. Now, there's no 5 doubt in my mind that the seven members, as you indicated, they took their oath, they take this work very seriously and they are trying to do the best they can in dealing with that wonderful "T" word called taxes, so it's not exactly going to make you the most popular person in town, but they're trying to do their job. Are you aware, and there was some discussion last week, of any other jurisdiction or county, I guess, in the Commonwealth that has -- ours is called the Board of Revision of Taxes. Other places I think it's the Board of Assessments and Review or something like that -- where there is no oversight direct line of accountability by the elected officials in the particular jurisdiction? And specifically now I'm talking about the legislative or executive branches of government in those other counties.
No, I believe that Philadelphia is unique in the way it has appointed its Board of Revision of Taxes. 157 10/01/02 - FINANCE - PUBLIC HEARING
So we're the only County that has a system such that the executive and legislative branches have virtually no direct oversight or involvement, putting aside the issue of how the more technical assessment process is done which should naturally be done by qualified assessors, you're in a position where -- I think your testimony last week was, "Well, we're accountable to the Commonwealth of Pennsylvania, we're accountable to the people of Philadelphia, we're kind of generally accountable to everyone but specifically we report to no one." Is that fair?
Well, I think that's fair. The way I put it is that we're accountable to everybody but are not necessarily responsive to the political winds that sometimes blow around the tax issue.
And your testimony -- I'm going to pop into your testimony for a second. I don't want to read too much into this, but Point No. 3 where you talk about "While the BRT cannot divest itself of its legally mandated substantive valuation function and surrender its authority to any other agency or body," and I 158 10/01/02 - FINANCE - PUBLIC HEARING highlighted this, "we will be pleased to cooperate with Council to establish and implement any reasonable procedural standards that you may suggest." Now, is that a very nice way of saying that you would be willing to work with us possibly to look at some of the other models around the Commonwealth where there are oversight entities that are established by legislative and executive branches of those county governments?
Absolutely. Let me just -- I think the one that comes to mind the most recent model comes out of the Wentworth Miller case out of Allegheny County. And what Allegheny County did, as you're aware, legislated an oversight board, legislated an Office of Property Assessments and legislated a separate Board of Appeals. So those kinds of things, I think, should all be explored.
And they separated those functions, and specifically one of them by their Section 209 I think was specifically put over in the County Executive's Office.
If I recall, Councilman, what happened was that there -- 159 10/01/02 - FINANCE - PUBLIC HEARING
Office of Property Assessments has now been shifted to the executive branch and the Chief Assessment Officer goes --
But the County Chief Assessor is appointed by the two bodies, the County Executive and County Council President, and I think they both have to agree or it doesn't happen.
Right. So in Allegheny County they have a Property Assessment Oversight Board which is three members and they have their duties and responsibilities, and then there is this Office of Property Assessments which is over in the executive branch, and then they created a new Board of Property of Assessment Appeals and Review which would essentially be what we refer to here as the Board of Revision of Taxes. So they broke up some of the elements that you have under one structure and made them accountable to various elements of the government.
Now, they also seem to have -- and I think I know just about every member of the board, and this is more for establishing record. These questions have nothing 160 10/01/02 - FINANCE - PUBLIC HEARING to do with the qualifications or any of the interests or commitment of the members when I ask these particular questions. But, again, looking at that particular ordinance that was done by Allegheny County which they were able to do under their Home Rule Charter, they make reference to qualifications of the board members for the new Board of Property Assessment Appeals and Review. They talk about the seven members. They specifically make reference to "In making appointments to the board, the racial, geographic, age and gender diversity of the County shall be considered. All members shall have been registered voters for at least the immediate year preceding appointment and shall remain registered during their terms of office. In addition to the foregoing, the members of the board shall meet the following special qualifications: Three members of the board shall have not less than 10 years practical experience as a registered real estate broker or real estate appraiser or assessor. One member shall have not less than 10 years practical experience as a building construction engineer, civil engineer, or general contractor or assessor. And one member shall have not less than 10 years 161 10/01/02 - FINANCE - PUBLIC HEARING experience as a practicing attorney at law with residential valuation expertise." And then those seven people, four are appointed by the board -- "four members of the board shall be appointed by the County Council, three members of the board shall be appointed by the Chief Executive with the consent of at least a majority of the seated members of County Council." Again, I guess that's their way of ensuring that there is some straight line connection. Can you talk to us about -- I know the First County Taxation Assessment Act basically says, for us, people have to be competent and qualified citizens and they're appointed to six-year terms.
Are there any other qualifications required under either our act or your regulations.
I do not believe in law there are qualifications other than what you see in the First Class County Assessment Law. It has been the practice, however -- and I must say that. It has been the practice, however, that the Board of 162 10/01/02 - FINANCE - PUBLIC HEARING Judges has generally selected people who have had at least real estate experience as attorneys or real estate experience as brokers or real estate experience as appraisers. I don't believe we've had a building or construction engineer on our board, but we've had mostly attorneys and we've had a significant number of real estate folk who have been on the Board.
Okay. Let's talk about appeals. Councilwoman Blackwell asked you about the number of appeals. I think you said last year there were 2,000?
I'm sorry. I made a mistake. Last year there were about 3400 filed. COUNCILMAN NUTTER 3400.
I think I said on the average we have about 2,000 appeals per year and that was the 5- or 10-year average.
And do you know of the 3400 appeals how many were successful, either by number or by percentage? 163 10/01/02 - FINANCE - PUBLIC HEARING
By number -- maybe I can work backwards and we can figure it out. There were 3758 appeals.
Yes. I'm just looking at the sheet I have now. 3758 appeals with 1,435 denials. And 134 appeals were withdrawn without any change in value which also be -- we'd put that in an unsuccessful --
Yes. So if you add those tow numbers, you can get a percentage out of your total.
Yes. Now, let me tell you, some of the balance is somewhat different than simply being a successful appeal. There withdrawn by evaluator, which is happening now where you have an evaluator deal with the taxpayer. There may be some compromise in value. Of that, there were 529 of those. 164 10/01/02 - FINANCE - PUBLIC HEARING
I'm sorry. Revised at hearing which means there was some relief given to the taxpayer, although it was not rolled back. And there is one further category which is really an evaluator move, but they have to be approved by the board because we have standards which evaluators cannot make approvals on their own above certain limits, and that would be 877 cases. That should give you your total of 3758.
We call them withdrawn by Board, which is really they were revised by an evaluator or a settlement offer was brought to the Board by an evaluator, but the evaluator could not do that on his or her own because it was beyond the limits within which we allow them to settle cases.
How many of those were 165 10/01/02 - FINANCE - PUBLIC HEARING what, sir?
I have a list, but I can tell you roughly -- in 2002 for 2002 we sent out 195,068 notices.
On this sheet, which is not dated, it's 269 roughly. Same thing.
Are you able to replicate the single sheet that you gave us? And I'd like to go back to that shortly. Could you show us the last five years? If you take this sheet and show us the last five years?
Oh, those percentages for the last five years? I believe we can do that. I am told by my technical staff "maybe", but we will attempt to do that, and if we have the technology to do it, we'll do it. The reason he is saying "maybe" is that we started this particular program, if you recall, for the year 2000. So we have three definitely we 166 10/01/02 - FINANCE - PUBLIC HEARING can give, three years we can give you definitely. So if that would suffice, we would certainly produce that for you.
How many people ended up appealing to Common Pleas Court?
You know, Councilman, I don't know. There wasn't many, but I really don't have that figure. I mean, I could get it for you.
Oh, yeah, yeah. But I don't have that figure day. I'll get it for you. That's for sure.
What was the total value of the anticipated assessments based on the notices that were sent out, I'm assuming this was summer of 2001, as compared to the total amount that ended up being certified I assume sometime in November? 167 10/01/02 - FINANCE - PUBLIC HEARING
Do we have that book with us? We don't have this book with us. It will have those numbers exactly and we will also give you what we certify because that certainly easy to do.
I believe it's Eugene Davey. I don't believe I am. I believe it's Eugene Davey who is the Chief Assessment Officer.
Yes -- well, I don't know 168 10/01/02 - FINANCE - PUBLIC HEARING if legally that's what he is called in the statute. I'd have to take a look at it. And if you want me to do that, I'll do that now. But my sense is he is the Real Property Administrator.
In reading through the statute at 5341.4, it's titled, Chief and Other Personal Property Assessors, Real Estate Assessors, et cetera. It says, "The Board shall appoint for terms of six years each a Chief Personal Property Assessor whose salary is --
But we don't have that anymore. The Chief Personal Property Assessor doesn't exist.
We have a Real Property Administrator, and that's Mr. Davey. A Real Property Administrator, Councilman, I might just add was recommended for us to do in the 1981 IAAO report.
And what's it called 169 10/01/02 - FINANCE - PUBLIC HEARING again?
Real Property Administrator. Real Property Appraisal Administrator.
Okay. And is there a particular classification or certification of assessors known as a Certified Assessment Evaluator?
You made mention of the 1981 report. Can you tell us what of the recommendations in that report which ones have actually been implemented?
In 1998 I told the House Subcommittee on Urban Affairs that we instituted at that time approximately 85 percent of that report. Some of the things that we did not implement were changing the name which was a suggestion. To also change -- to have funding come entirely from the 170 10/01/02 - FINANCE - PUBLIC HEARING City as well as the City and School District; we did not change that. But the substantive, for the most part, the substantive recommendations have been changed with maybe the possible exception of Public Information Officer.
Why don't you maybe do for us an analysis of 1981 report and then report back to the Chair which recommendations were actually implemented and which were not and whatever the reason may have been.
Let me ask about the Computer Assisted Mass Appraisal System, CAMA. Who developed this system?
Well, one of the founders is here today. One of the founders is here today, a gentleman by the name of Kevin Kean. And he, together Mr. Davey and with one of our personnel who is now deceased, Mr. Jerry Newman, were really the founders of what was called in 1995 Trending. And Trending has now become CAMA, the Computer Assistant Mass Appraisal System. And if you don't mind, maybe Mr. Kean could sit up here with me and we can talk about some of the specifics of that, if you'd like. 171 10/01/02 - FINANCE - PUBLIC HEARING
If you would like some company at the table, that's fine with me.
No, I'm fine. I just think if there's something that you have a specific question, if you don't mind, I'll call him at that point.
At some point I'll ask for him. Now, does every homeowner receive a notice whether they receive an increase, a decrease or their assessment stays the same?
No, sir. The only homeowners that receive notices are those who've receive increases in value, decreases in value, or if there is a change in ratio, but that would affect all homeowners.
The people who don't receive an increase or a decrease, why don't they receive a notice?
The question is, 172 10/01/02 - FINANCE - PUBLIC HEARING Councilman, is that why don't who don't get changes get notices as well?
I know from the dissent decree that Judge Tacov (ph) said we didn't have to do that. Where Judge Tacov got that ultimately, I thought it was from law. But, that, I'm sorry I don't know. The reason -- forgetting the law, the reason we wouldn't do it would seem to me not an efficient expenditure of money to send something to somebody that's not going to change anything. That would be my feeling.
Suppose a person doesn't agree with what their current assessment is?
If they don't agree with what their current assessment is, and I know we're talking a different time, it's easy what your current assessment is if you just go on-line and you can check your address on-line.
How many people in the City, by your estimate, have access to the Internet?
I don't know how many 173 10/01/02 - FINANCE - PUBLIC HEARING people own them, but I will tell you I would assume more than 50 percent have access to them since we have them in libraries, we have them in various community centers, we certainly have them in our office and we welcome folks to use them. But I have no idea. It almost would be like, it would seem to me, sending somebody a notice of appeal when they've gotten everything that they wanted. Suppose we reduced your value --
But suppose from that person's perspective, they now have information about their particular property that at least indicates to them that the current assessment, even though it's not changing, is incorrect. Or maybe a change the previous year and they didn't appeal, for whatever reason, they missed, and it's just one additional piece of information that they would have and be able to come in and say to the Board, you know, "This assessment, even though you're not changing it, is actually not correct and these are why." You'll dispose of it, they win or they lose, whatever the case may be.
That kind of eliminates, even under the current circumstances, about half of the City from saying anything.
Currently, it's about 180,000 this year who do not receive notices. So you saying maybe they should have received notices and therefore they would have seen their values and maybe wanted to appeal them. That's a very good idea. We'll take that into consideration.
Let me ask this question: On of your testimony, dead center, you say, "Our goal is to make sure that the market value of any given property is determined by the sales of other similar properties."
Now, this is slightly personal, although I think you already know from public statements, you will not be seeing me over at your shop, as much as I enjoy talking with you. But in my own situation, with the exception of a minimal increase in 1995 which was 7 percent, I did not receive an increase for seven years. Some of my neighbors did. Our houses are all about the same, no new construction on the block, nothing 175 10/01/02 - FINANCE - PUBLIC HEARING anybody's done anything, with every respect to my neighbors, nothing particular spectacular to the houses on the street. And all of a sudden, I have received a significant increase. How does that happen?
Well, again, I won't speak specifically about your property because I don't think that would be fair or ethical of me to do that.
One possible way that could happen, Councilman, and I don't know if this is the case and maybe at some point after this the staff could look at it, is that for the first four years we didn't have the amount of sales that we required in our geographic market area in order to trigger an increase in your real property. And if that were the case, I think that would simply be the end and that would be the answer and it happened now. I don't know if that's the case. It would probably require somebody to look into it. I don't know if you want anybody to do that, I mean, we'll certainly be happy to do that if you wish.
I mean, it would 176 10/01/02 - FINANCE - PUBLIC HEARING certainly be, I guess, again, somewhat intriguing more as the exercise, not for my use of the information because I'm not appealing. But, I mean, I did get some information from the BRT. And I think as Councilman O'Neill said, for whatever has been requested, you guys certainly do your best to produce it. But in looking at the homes on the block, I mean, there are only of them. I'm 10 actually one of the more recent sales or purchases. 11 That was eight years ago. And I think in that time 12 there were only two transactions, one in 2000, one 13 in 2001, one of which may have been more of a family 14 transaction. So I guess I am somewhat intrigued as 15 to what now would have triggered it since there's 16 basically nothing going on on the street. 17
The sales on your block don't necessary trigger your value. I mean, you are put together with other groupings that would be a similar property that would be like yours that may be on the next block or the block -- I don't know. But that's what we attempt to do. In fact, in this little booklet, you will see exactly what that process is and that's how we describe that process. But are there anomalies? 177 10/01/02 - FINANCE - PUBLIC HEARING There could very well be. And maybe as an academic exercise just for our staff, we'll take you property and do that.
Well, I appreciate that, but I guess what I'm also trying to understand is how could properties on the same block get increases during that same time and --
They were absolutely the same as yours, right, those properties?
Well, almost all the houses are virtually the same. But for a seven-year period there was none in my particular situation and then the 41 percent comes on. And most of the neighbors have received valuations going to the same number. I guess I just I don't understand how that happens.
I will try to find the answer to that question. I think what happened -- and again, this is by no means by way of excuse and no means by way of laying it anybody else. In the year 1998, we had a significant problem getting deeds from lots of sources. But we were, if I'm not mistaken, how many months did it take us? We missed six months worth of deeds in 1998. Now, I don't 178 10/01/02 - FINANCE - PUBLIC HEARING know if that's the -- that's possible, I suppose. But, as I said, that's --
How do the assessors or how does your system get the information that ends up either on the notice or on some of these printouts? I have some of the printouts from city system, again, for those properties that shows the and the frontage, the depth, total square foot area, two story, attached garage.
Well, some of it comes from a view and lots of it come from the deed itself. Physical view and some of the deed. And what we're trying to do, Councilman, and I think it's a very good question that you ask, the best way our system can be improved is for our data to be improved. That's really one of the reasons we ask folks to give us more data. I know that scares people because they think if they give us data, we're going tax you more. It's not the case. We give you better value if we have data. And 179 10/01/02 - FINANCE - PUBLIC HEARING sometimes the input on some of the deeds is incorrect. So we just have to work with what we have. And our folks can make mistakes as well.
Let's talk about the value question. Where did the 71 percent number come from?
If you don't mind, I can hopefully just give you the history of it. It came from this. In 1995, myself, Mr. Davey, Mr. Kean, and as I said, the gentleman who passed away, Mr. Newman, decided that we wanted to try to do -- what was happening throughout larger urban jurisdictions in the United States was to make automated as many functions as we could in our assessment office. The first pass -- in '95, we couldn't do this for '95, for '96 because we just weren't ready to do it. The first pass showed that there were so many properties significantly undervalued in the City of Philadelphia and a smaller amount of properties that were overvalued.
Well, I think what happened was that we were doing this manually. I 180 10/01/02 - FINANCE - PUBLIC HEARING think there were people who in their hearts, the evaluators who in their hearts tried to do the right job. And again, I'm not blaming them. I think what happened, it kind of just got beyond them. It went well beyond their abilities to do what they were doing. Another factor was that when you had 67 or 66 evaluators, everybody was working from a different standard, even though they didn't even know they were working from a different standard. We could generally say these are the standards, but if I let you follow the standards, and let Councilman DiCicco follow the standards, I think there might be some differences if you have to do something manually. And I think that kind of happened.
Councilman, can you tie it up in a few minutes and then we can make another round.
Thank you. 181 10/01/02 - FINANCE - PUBLIC HEARING
How does whether you're doing something manually or by the latest Dell that came on the market, how does that impact your utilization of the standards? And I have to believe that people are train, some of them have professional certification and the like. I mean, are you saying 67 people were doing things in 67 different ways throughout the City?
No. I don't want to overstate it. It wouldn't that gross. But it's very clear that if I hear standards a certain way, I might apply them a different way than you would. I mean, human beings have a tendency to be more subjective than a computer. And I'm not saying all the answers are in the computer. I am not saying that. That is not me saying that, Councilman. However, what does happen, I think -- and again, I don't think any of this was -- again, I'm not trying to over-exaggerate, but I do believe if there were a set of standards and every human being were trying those set of standards, and I believe they were, you would still find some differentiation between one person and another as to how to apply those standards. That's really all I'm saying. But that 182 10/01/02 - FINANCE - PUBLIC HEARING doesn't specifically answer why properties were undervalued. I think they just couldn't keep up.
Okay. My last question is, has the Board considered -- and certainly your testimony seems to be going in that direction. Does it take some of the subjectivity out of it if you go to a hundred percent and then figure out what the appropriate tax rate should be to then end up in a revenue neutral situation and then go from there? I understand that there will always be gaps, there will always be lags, but certainly not generally of 20, 30, 40, 50 percent because you're right there at one moment, things are going to happen in the market, you're still going to fairly close. Why don't you just go to a hundred percent and try to figure out between Finance and Revenue what the new tax rate should be, which obviously should be lower. It will certain create a new group of quote/unquote winners and losers from a tax standpoint, but then people at least know what the real number is. Part of the problem here is -- I mean, I have my notice in my pocket. The moment you open it, you know that there's something wrong with it because it is not possible for the market 183 10/01/02 - FINANCE - PUBLIC HEARING value on that sheet of paper, in most instances, to be correct. So you have both a factual problem with people and a perception problem that all of the numbers on this sheet are paper are wrong. They cannot possibly be right so I start the game in the hole and I have to dig myself out against, you know, people with the CAMA, letters or initials behind 9 their name, and I can never, ever explain what the 10 situation is. Why don't we just change the system 11 in that fashion? And then we have other things 12 still to do with regard to fairness. 13
Sure. We're for it. We 14 would appreciate working with the Administration for 15 sure, but I think we certainly have to work with 16 City Council as well hand-in-glove. If we're going 17 to change to 100 percent of market value to sale 18 price, it certainly makes our life easier. I think it does add a certain objectivity measure that is easier for us to judge, sale price. Now, we know that sales price is to be considered but not controlling, that's correct, we understand that. But it does give you a bar. I think what you're saying is, I look at my value and I know it's too low so, therefore, I 184 10/01/02 - FINANCE - PUBLIC HEARING don't agree with anything else that's going to be on this paper. And I think that's a very fair statement and it's a statement I think that we should take to heart and try to do something about. We agree with it.
Thank you, Madam Chair. Thank you for allowing me, although I'm not a member of the committee to ask a couple questions. I wasn't privy to the last session on Friday because I had some job fair obligations that I had to attend to. But there have been a number of questions that have come as a result of various community meetings that I've attended. And I had actually asked you a couple of these questions earlier off the record, but for the record I just wanted to ask a couple of the things that was asked of me. One was an extension of the appeal time. I think the deadline is on the 7th. 185 10/01/02 - FINANCE - PUBLIC HEARING
And a number of residents because of the uncertainty of what we were doing, the uncertainty of several organizations would potentially do, i.e., tax class action suit, they wanted to know could there be an extension of the time?
We cannot officially extend the time because of the state statute mandated. If there are particular extenuating circumstances and you want to bring those extenuating circumstances to our attention, we'd certainly be happy to look at them.
The other question was the availability or the opportunity to file 17 appeals in the evening hours. There are a number of people who work, and to take a day off of work to come down and deal with an oral appeal was troublesome to them and they wanted to know could we potentially set up some evening hours in strategic locations around the City to give people an opportunity to appeal in evening hours. Is that a possibility?
I appreciate the question. 186 10/01/02 - FINANCE - PUBLIC HEARING There's a couple of problems with it. And it's certainly something that we would, again, as part of this entire discussion as to how we can make the system work, easily accessible to folks in the City, it part of that. The problems I would mention on the record, however, are number one, that would entail overtime and my budget does not have that built into it at this point. Number two, it also would entail going to places that have some technology or at least the access to some technology because we do use in our appeals hearings more and more we use what everybody else is using is a computer. So barring those two things, we'd certainly be happy to explore that with you.
When you say technology, you mean access to computer systems?
Yes. If there's someplace, make sure that we can plug in and bring what we have to get, our laptops, whatever it might be.
I know some of our libraries across the City are on-line. With respect to the overtime issue, could it simply be a situation where you change the 187 10/01/02 - FINANCE - PUBLIC HEARING shift which would normally be during the course normal business day and then change that shift to an evening hour to accommodate individuals.
We could certainly look at that, Councilman. I would have to discuss that with the staff, obviously. I can't make those decisions because there might be some union considerations involved, so we would look at that and see if that's available.
With respect to the timing of the issue because, as you just indicated, that we can't extend the appeal process. How long do you think the appeals will be? And this is probably an abnormal year.
My guess is that -- we have seen this amount of appeals before. If I had to guess it would run through November, December, January, February, March.
So we have to make the adjustments if we agree that we'll do some evening appeals? 188 10/01/02 - FINANCE - PUBLIC HEARING
I said we do have time to do some adjustments if we agree to do some evening appeals in terms of scheduling and in terms of locations.
There is another issue. This actually came up last night at a meeting. There's a block -- I'm going to give you specifics, there's a block, the 2100 block of Green Street where there's a myriad of housing stock on a particular block. There are a couple of properties that are listed as condominiums. There's actually a property that's commercial property. There are multi-family rental properties, and there are owner-occupied single family units. There are various extremes -- actually, ultimate extremes because apparently one of the properties on the block which was a commercial property got no 21 increase in assessments, but the owner-occupied single family dwelling got a substantial increase in assessments. How does that work? Are there different categories?
Sure. Absolutely. We 189 10/01/02 - FINANCE - PUBLIC HEARING have an entirely different category of commercial and industrial properties. And to the best of my knowledge those notices are in the process of just going out this week. However, to answer your question specifically, I mean, there's a different way of valuing commercial and industrial properties than there are residential properties. For the most part, residential properties are valued by sales of comparable properties. That's what everybody who buys and sells residential properties will look at when they go to a broker or go to wherever they want to buy or sell a property. With commercial and industrial properties, Councilman, the best measure of value if it is not owner-occupied -- if it's owner-occupied sales would also be good. Best measure of value always has been with commercial properties to be the income that it produces. You use the income that it produces and you capitalize that and you have a value for the bricks and mortar.
So when you do an analysis on a commercial property, you actually determine what the income that is produced as a 190 10/01/02 - FINANCE - PUBLIC HEARING result of that property's operation?
Yes, sir. Whenever it looks as if it's a property -- or an evaluator waiter makes a decision that this is a property that I may want to increase, he will request income expense statements for two or three years from the property owner. If that is not forthcoming, he or she will do their own proforma based on industry standards. There are books that kind of help us get through this. Industry standards of what this kind of property, what kind of income ought to be kicked off by this kind of property and what kind of expenses are attached to this kind of property and make a decision that way.
I want to understand. There's a commercial property, and our assessors look at that commercial property, it's operable, they make a determination -- first of all, they ask the individual through a letter, through a visit, site visit?
Usually a site visit. 191 10/01/02 - FINANCE - PUBLIC HEARING
They go in and ask the individual, you're running a business --
They ask for certain information with respect to their gross receipts, the whole nine years?
No, we ask them for an income and expense statement, what's your income and what's your expenses.
Okay. All right. Now, multi-family properties versus single-family, how are they evaluated? The same time?
Multi-family properties are commercial and industrial properties.
Yes. If it's an investment property for sure. Now, we do have cutoffs. If it's a multi-family property that has five or more -- if we have a multi-family property that has five or more units, that's a commercial and industrial property. If we have multi-family property that has five or fewer -- I guess it's four 192 10/01/02 - FINANCE - PUBLIC HEARING or fewer units, that is evaluated the same way other residential properties are evaluated, through sales, comparable sales.
So in a particular neighborhood that I'm talking about, there are traditionally three-story row homes and traditionally there are three units in a particular building. You're saying that that three-unit development is valued the same as an individual --
I'm getting corrected. Can you hold, please? My staff is not arguing with what I said, they're just saying to make sure when that when you have a single-family residence and you have a, say, three-unit apartment building next door to it, looks the same from the outside but we know it's a three-unit apartment building because it's going to have bells on the outside. We know that. Number 1, lots of times there is an owner-occupant in one of those buildings.
Well, sometimes. 193 10/01/02 - FINANCE - PUBLIC HEARING
Secondly, we don't compare that to the single-family residence. We compare that to other small multi-family properties that sell. We compare single properties to single properties, multi-family to multi-family.
We evaluate them the same way because we're looking at sales. We are not looking at their income and expense statement.
But you don't take into account the income-producing --
No, no. I think it's just an administrative rule that we've made because we believe that, Councilman, in most of those instances you're really seeing an owner-occupant live in these places, in duplexes and triplexes throughout the City. That is absolutely the case.
I disagree with you on that. I yield to the Councilman. 194 10/01/02 - FINANCE - PUBLIC HEARING
So if I own a three-family dwelling non-owner-occupied, that property is being evaluated at the similar as a small single-family residential?
No, no. What I'm saying is that property is being evaluated compared to the sales of other three-unit or less properties.
Because I can have a six-unit apartment building that is taking in less revenue than the three, depending on the neighborhood.
I suppose that's possible, but that would be reflected in sale of that property. That's what we're saying. It should be reflected in the sale.
But there are other properties that do sell. That's how we value single-family homes in the City this round based on 40,000 sales. All we can do is to extrapolate from 195 10/01/02 - FINANCE - PUBLIC HEARING those homes that sell to value those that did not sell. The methodology is the same.
And we will have a follow-up question as soon as you're done, Councilman, a follow-up on the same issue by Councilman O'Neill.
I'm sorry. I've tried to answer your question again. Go ahead.
There were some irate homeowners who didn't understand why the property down the street that's obviously producing in that particular case some pretty healthy revenues and why they were receiving a certain assessment in those particular properties. It happened to be three units in it weren't receiving any assessments. And I was at a loss as to explaining that, and I'm still kind of at a loss as to a way to explain it.
Well, let me try to help. Councilman, that is -- I can't speak to the specific property, obviously, but what I can -- I guess the best way I can say it, is that single-family homes are compared by the sales of other single-family 196 10/01/02 - FINANCE - PUBLIC HEARING homes that sell. Three-unit or less multi-family units are compared by 3 unit or less multi-family units that sell. I mean, it's sales to sales. I'm not saying that we don't look at income. We look at income when it becomes. I'm sorry, four or five or above. That's the methodology.
But it sounds like to me that the single-family dwelling is easier to do an assessment on because you don't have to worry about the income that's produced as a result of the operation of the building. So that's why, you know, subsequently you assess those single families and it sounds like it's some ambiguous strategy as associated with the way you assess multi-family units.
We assess them by sales. I mean, that's not ambiguous. I'm sorry.
Councilman DiCicco wants me to ask you can you explain similar?
Three-family versus three-family on the same block, what is similar about them.
Similar would be the construction, would be the condition, it would be 197 10/01/02 - FINANCE - PUBLIC HEARING the neighborhood, the location, you know, all of those kinds of factors that go into it.