Monday, March 26, 2018

The Dreaded Reval

I moved to Jersey City in 1988, right after the last property tax reval. I was still in college and knew nothing of taxes and real estate.

But my landlord complained frequently. She talked a lot about how she was going to lose the building I lived in. She put it up for sale and after that, real estate agents frequently barged in on me on Saturday mornings.

No one bought the four-story, three-unit brick row house then, and we were eventually thrown out by the bank when she was foreclosed on. The house sold in 1991 for $130,000. I think it was laughable even then. If I had any idea how anything worked, I'd have jumped on it.

The house continued to be taxed on that same $130k value until just now, when the state of NJ ordered a revaluation of all JC properties. That house is now valued at $1,545,200 and taxes went from $11,700 to $25,032.

There are a couple ways to look at that. One goes like this: Gasp, someone's taxes just went from $11,700 to $25,032. Holy shit. But that's the wrong way to look at it...the right way to look at it, as this reval generates no new income for the municipality, is SOME POOR SUCKER IN A LESS-VALUABLE AREA WAS PAYING THE DIFFERENCE, ALL THAT TIME.

And they'll never get that money back. So whoever bought my old building was skating by on a handsome advantage, a few blocks from the Grove Street PATH train. Lucky them.

Newcomers will tell you all kinds of bullshit about it having been a dangerous area or the perceived value being new. That's just total crap, of course. DTJC was a gem even in 1988. People tell themselves whatever they think makes their lives sound cooler, I guess. "I moved to an edgy area! I've been here for six years, I'm a JC veteran!" (Maybe try to sound less like a douche and try understanding you participated in gentrification.) 

Anyway, 30 years later, the new reval happened, and my own taxes over by Liberty State Park went slightly down. I had challenged the taxes when I bought the place and had already gotten them adjusted. Now they went down even more, though the value of the place went up.

My old place, the condo I used to own on 8th Street near Hamilton Park, went from $100 a month in taxes when I owned it to $400 a month right after the roof was redone (and I had just sold, thank goodness), and now went to $585 a month. That's before the HOA fee and mortgage.

Fair enough, I guess, for a place that just changed hands for $465k. I bought it for $125,000 in 2002, and here we are. The last owner was an interior decorator. The bones haven't changed, but she sure knew how to spruce it up after it took months to sell the last time for less than I'd sold it for a few years earlier. A new countertop, a few light fixtures, and she swapped out my shutters for curtains after her dogs destroyed them. The big change was the outside. They'd restored it to what more-or-less looks like the original facade, and buyers ate it up. It's still a frame railroad, so I am happier in my brick house in Bergen-Lafayette.

I've been watching message boards as people scream bloody murder about the reval. Imagine a world where people whose values went DOWN started demonstrating over wanting reimbursement on all those years they overpaid. That makes more sense to me. I am pretty pissed at people who were underpaying all those years and are now complaining. There's a guy on my NextDoor message board who bitches constantly about the taxes going up on his THREE UNIT ROW HOUSE. They went from pocket lint to real money. Poor boy, someone get him a lollipop. Better yet, maybe he can buy one with that money he was pocketing off his multiple tenants for so many years. Other people are complaining that their homes were valued at the highest rate because they hadn't let the assessors in. I'm not sure how they concluded this was a good idea, shutting out the assessors. I actually flew home for it, thinking it's better to be transparent and face the music rather than letting them assume the worst.

It worked. But I sure am glad at the moment not to own over in Hamilton Park. I never say that when I'm waiting on the horribly erratic #4 bus or dragging myself home from the Light Rail late at night. But when the tax bills are due...that's the one time I praise the gods of roofing and real estate for pushing me out of my 8th Street at the right time.


William Kendall said...

Taxes are the price of civilization.

robert said...

Same thing here in Texas...

Folks on NextDoor are complaining home values were raised 30% since the last valuation 5 years ago, causing an increase in their taxes. These same folks complain about the state of schools and probably voted against the school bond that failed a few years ago. They typically don't have kids in the local schools.

These same folks want a system like CA where valuations are only done when a property sells (and is causing major problems there).

There doesn't seem to be a way to explain to them the "big" picture that taxes are necessary and everyone paying their fair share is the best way for everyone.