1 Photo
Southampton Town Supervisor Jay Schneiderman. EXPRESS FILE
Anyone who owns a house in Southampton Town, anywhere in Southampton Town, has seen its value go up.
Musing about the market last week, Southampton Town Supervisor Jay Schneiderman told colleagues on the Town Board of meeting a couple from Hampton Bays who said they bought their home for $250,000 and now it’s worth $800,000. “They were thrilled,” he said.
Not so thrilled, however, are middle-class homeowners who, in the face of escalating market values, confront escalating property taxes.
Wrestling with the negative side of a positive thing, the Town Board last Thursday, April 29, met with Town Sole Assessor Lisa Goree. At the confab’s conclusion, members agreed in unanimity to authorize Ms. Goree to retain the services of an appraisal company to help the department generate data depicting the true value of properties across Southampton Town.
Introducing the topic, Mr. Schneiderman noted that, two years ago, in the wake of burgeoning home values, the board agreed to freeze property tax assessments, thereby giving officials time to figure out how to craft an equitable taxing structure for residents.
A town-convened committee came up with a two-pronged idea. The approach calls for a cap on reassessments, limiting them to an increase of 5 percent in a year, while a second proposal, a so-called “Homestead Tax Exemption,” would offer primary homeowners in the town a $50,000 reduction in their overall property assessments. The measures would require state approval.
Assemblyman Fred W. Thiele Jr., who carried the bill to Albany on behalf of the town, reported it has been introduced in both the Assembly and the Senate and is in the Real Property Tax Committee in each respective chamber.
“Now that the state budget is complete and we are back in session, these bills will be considered between now and the end of session. It’s too early to give a prognosis on success,” he said Monday.
Detailed at a public work session last summer, the measure moved through the process. But as it moved, market values continued to skyrocket.
Speaking to the 5 percent cap on reassessments, Mr. Schneiderman offered, “No one should see more than a 5 percent jump in the value we use to determine your taxes in a given year, so even if the property value goes up 20 percent, we would adjust by 5 percent until we caught up to what we believe is the real value.”
That was the thinking a year ago, but no one expected prices to keep ballooning. Whether officials can “catch up” is a question, and unlikely, according to Mr. Schneiderman, who said, “if values continue to increase, we’ll never catch up.
“Right now, we’re at a point, the market’s going up probably the fastest we’ve ever seen,” the supervisor said. “We certainly didn’t know when we put the freeze in place, we would see a historic rise in property values.”
Ms. Goree reported that an analysis her department conducted looked at sales in Hampton Bays, which saw a jump in the number of sales as well as sale prices. Out of 200 sales from the third quarter of 2019 to the third quarter of 2020, 140 sold at a market value in excess of the assessed value. For example, a house on Washington Heights Avenue sold last June for $525,000, while its assessed valuation was nearly half that, at $246,800.
Southampton Town is unusual in that the town uses market trends and a 100 percent assessment to determine a property’s value. The 5 percent cap would mean that as values soar, properties would continue to be assessed with their new values, but the taxable increase would be no higher than 5 percent from year to year. However, if the house sold, the cap would be lifted for the next homeowner.
The market trends method means each year the sole assessor must update assessments based on market conditions.
This last year, Ms. Goree said, “we’ve never seen anything like it.” The sales and sale prices have been at such volume, she’s looking to hire an additional private appraisal company to assist in a townwide review of sales, a task normally undertaken in house, by an 11-person staff.
“What we’re seeing right now in Southampton, the market values have increased anywhere from 20 to 25 percent,” Ms. Goree related. In 2020 alone, the real estate market saw over $6 billion in sales in the Town of Southampton, she said.
“In just my brief analysis, we are definitely seeing an increase of at least 15 percent townwide on the assessment role for 2022,” the sole assessor said, noting that in 2019, the last reassessment, the increase was about 7 percent.
“If we’re seeing 15 percent townwide, we could potentially see assessments increase by 50 percent,” Ms. Goree extrapolated, “not everywhere, but that’s potentially what we’re seeing.” She emphasized, that, if assessments increase, as long as there’s an increase townwide by a uniform percentage, it may not mean an individual homeowner’s taxes would increase. Still, she called for enhanced transparency as the process moves ahead, with educational sessions for people so they can understand the meaning of tax impact letters they may receive.
The freeze was slated to expire this year. However, board members agreed that before they considered extending it, they’d like to see the data derived by the townwide review of sales.
Consultants will begin in Hampton Bays and work their way east, then tackle the western section of town. They expect to take about three months to finish their work, Ms. Goree said.
That in hand, the supervisor said, “we’ll have some challenging decisions to make.”
