Analysis of
Assessment Issues
in the Town of Woodbury
Christopher J. Dunleavy
9 Butternut Court
Highland Mills, New York 10930
July 16, 2006
Assessment Basics
The formula for assessing residential parcels is:
Assessment = Full (Market) Value x Level of Assessment
For example, the assessment for a home whose estimated market (Full) value is $100,000
with a Level of Assessment set at 36% would be $36,000.
$100,000 x 36% = $36,000
This equation can be rearranged in a number of ways.
Assessment
= Level of Assessment
Full Value
Again, using the same example:
$36,000
= 36%
$100,000
In a period of rising real estate values*, simple arithmetic requires that the Level of
Assessment drop from year to year.
Unless the assessments for residential parcels move upward at the same rate as the
increase in real estate values, an increasingly larger denominator (Full Value) divided
into the same or a relatively smaller numerator (Assessment) means that the Level of
Assessment must decrease from year to year.
Using the same equation… if the value of the example home rose by 10% to $110,000,
and the home’s assessment remained the same at $36,000, the Level of Assessment
would have to drop to 32.7% to reflect the changed ratio of Assessment to Full Value.
$36,000
= 32.7%
$110,000
The assessment problem in Woodbury in 2006
After a year of rising real estate values, Levels of Assessment in 2006 dropped in 39 of
the 40 municipalities in Orange County.
Despite the same rising real estate values, the Town of Woodbury was the only,
inexplicable exception to this expected pattern of declining Levels of Assessment.
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Also because of rising real estate values, the Level of Assessment in the Town of
Woodbury steadily dropped from 1996 to 2005.
Again, the only exception to this pattern, even in Woodbury, was this year… when the
Level of Assessment (LOA) was arbitrarily increased from 36% to 40%.
Woodbury’s arbitrary change in the 2006 Level of Assessment is a symptom (and one of
the causes) of a serious problem in the fairness and uniformity of Woodbury’s 2006
assessment roll.
There are two other obvious indicators of a problem in Woodbury’s 2006 assessments.
As part of the assessment process, the New York State Office of Real Property Services
(ORPS) annually calculates an Equalization Rate (based on the value of all assessable
property) and a Residential Assessment Ratio (based on the market value of one, two and
three family homes) for every assessing municipality.
For the same reason that Levels of Assessment necessarily drop, both the Equalization
Rate and the Residential Assessment Ratio also decline in periods of rising real estate
values.
Again not surprisingly, the State-calculated Equalization Rate for Woodbury dropped
from 36% in 2005 to 34.28% in 2006. The Residential Assessment Ratio dropped from
34.28% to 32.17%.
Woodbury’s arbitrary increase in the Level of Assessment and the arbitrary way in which
the Full (market) values of only about 700 of about 3,300 residential parcels were
reestimated in 2006 resulted in dramatically excessive (and unfair) increases in the
assessments of about 20% of the homes in the Town of Woodbury.
But the value of my home went up…
Many people assume that because the value of their home went up from 2005 to 2006,
their assessment should also have increased in 2006.
That is true, but it is only true if the assessments of the other homes in Woodbury whose
market value also increased also had their assessments appropriately increased.
New York State law and the Equal Protection clause of the U.S. Constitution require that
homes be assessed uniformly at the same (or at least very similar) percentage of their
market value.
This did not happen in Woodbury in 2006.
696 homes (517 of them townhouses) had their assessments increased in Woodbury in
2006. The vast majority of assessments in Timber Ridge increased by 30% - 65%.
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But assessments remained exactly the same in 2006 as they were in 2005 for 2,611 other
homes in Woodbury (whose market value also similarly increased).
Mathematically, the only way the assessments of these 2,611 homes could have remained
the same is if there market value had declined by 10% from July 1, 2004 to July 1, 2005.
The evidence is consistent and overwhelming. This did not happen.
By dramatically increasing the assessments on hundreds of homes, but leaving the
assessments on over 2,600 homes at exactly the same level they were in 2005, the Town
of Woodbury created a glaringly unfair, “non-uniform” assessment roll in 2006.
Townhouses, market values and unfair assessments
Do Woodbury’s assessments this year reflect the “fact” that townhouses became almost
as valuable as other homes in Woodbury in 2006?
That’s what Woodbury’s 2006 assessment roll assumes… but it is simply not so.
The difference between the average assessment of a townhouse and other single family
homes in Woodbury in 2005 was 30%. In 2006 that difference in average assessment
dropped to only 5%!
This change in assessments assumes that exactly the same pattern of change occurred in
the Full (market) Values of these homes. 30% difference in market value in 2005, only
5% difference in 2006.
The Assessor’s “Recent Sales” data for the period July 1, 2004 through June 30, 2005**
clearly demonstrates that this was not the case.
Recent Sales data indicates that the difference in the average sale price of townhouses
($292,122) and other single family homes ($431,724) in the relevant period was 32%...
the same (actually slightly larger) than the difference in Full Values in 2005.
Other sources of real estate sales data (Multiple Listing Service, Zillow.com) demonstrate
exactly the same conclusion. Hundreds of homes didn’t increase by 30%-65% in market
value in Woodbury while the vast majority of homes declined in market value by 10%.
Woodbury’s assessment roll in 2006 is clearly and strikingly non-uniform. Arbitrary and
capricious methods were used to dramatically and unfairly increase assessments for
almost 700 of over 3,300 homes in the Town of Woodbury.
* This is not the case if all homes are reassessed at the same time (a full revaluation), or if homes are
declining (overall) in market value.
** This data is (presumably) used by the Assessor in calculating assessments, and is also used by ORPS in
calculating Equalization Rates and Residential Assessment Ratios.
July 16, 2006
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Town of Woodbury
Residential Assessment Statistics for 2006
Assessments, Full Values and Recent Sales Prices
Townhouses vs. Other homes Townhouses
Difference in average assessment in 2005 .......................................................... $37,971 (30% lower)
Difference in average assessment in 2006 ........................................................... $6,000 (5% lower)
Difference in average Full (Estimated Market) Value in 2005 ............................ $105,476 (30% lower)
Difference in average Full (Estimated Market) Value in 2006 .............................. $14,999 (5% lower)
Difference in average Recent Sale prices in 2006.............................................. $136,902 (32% lower)
Townhouses (Building Style 15 only)
Average “Recent Sales” price of Townhouses ................................................... $292,122
Average 2006 Assessment as percentage of average “Recent Sales” price.............. 43%
Average 2006 Full Value as percentage of average “Recent Sales” price ............... 106%
Other homes (All residential parcels except Building Style 15 “Townhouses”)
Average “Recent Sales” price of Other homes ................................................... $431,724
Average 2006 assessment as percentage of average “Recent Sales” price .............. 30%
Average 2006 Full Value as percentage of average “Recent Sales” price ................. 75%
All Residential Parcels
Total number of residential parcels* ......................................................................... 3,308
Total number of parcels Full Value decreased ........................................................ 2,663
Total number of parcels Full Value increased ............................................................ 645
Average Full Value in 2006 ............................................................................... $323,469
Change in average Full Value 2005 to 2006 ...................................................... -$13,194 (-4%)
Total number of parcels assessment increased .......................................................... 696
Total number of parcels assessment stayed the same ............................................ 2,611
Total number of parcels assessment decreased ............................................................. 1
Average assessment in 2006 ............................................................................. $129,387
Change in average assessment 2005 to 2006 ..................................................... +$8,188 (+7%)
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Townhouses
(Building Style 15 only)
Total number of Townhouses (Building Style 15) ........................................................ 520
Number of Townhouses Full Value decreased 2005 to 2006 .......................................... 3
Number of Townhouses Full Value increased 2005 to 2006 ....................................... 517
Average Full Value in 2006 ................................................................................ $310,827
Change in average in Full Value 2005 to 2006 .................................................. +$63,059 (+25%)
Number of Townhouses assessment decreased 2005 to 2006....................................... 0
Number of Townhouses assessment stayed the same 2005 and 2006 .......................... 3
Number of Townhouses assessment increased 2005 to 2006 .................................... 517
Average assessment in 2006 ............................................................................. $124,331
Change in average assessment 2005 to 2006 ................................................... +$35,134 (+39%)
Other homes
(All residential parcels except Building Style 15 “Townhouses”)
Total number of “Other homes” ................................................................................ 2,788
Number of “Other homes” Full Value decreased 2005 to 2006 ................................ 2,660
Number of “Other homes” Full Value increased 2005 to 2006 .................................... 128
Average Full Value in 2006 ................................................................................ $325,826
Change in average Full Value change 2005 to 2006........................................... -$27,418 (-8%)
Number of “Other homes” assessment decreased 2005 to 2006 .................................... 1
Number of “Other homes” assessment stayed the same 2005 and 2006 ................ 2,608
Number of “Other homes” assessment increased 2005 to 2006 ................................. 179
Number “Other homes” Assessment increased/ Full Value decreased ......................... 51
Average assessment in 2006 ............................................................................. $130,331
Change in average assessment 2005 to 2006 ..................................................... +$3,163 (+2%)
* Town of Woodbury Final Assessment data for 2005, Tentative Assessment data for 2006, and
Recent Sales data were provided in spreadsheet format by the Orange County Real Property Tax
Service Agency through a Freedom of Information Law (FOIL) request. All statistics exclude data
from 29 residential (non-Townhouse) parcels assessed in Woodbury in 2006, but not assessed in
2005.
** “Recent Sales” statistics include only data on “arm’s length” sales of Class 210 (building and
improvements) residential parcels for the period July 1, 2004 through June 30, 2005.
July 10, 2006
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Town of Woodbury
Levels of Assessment, Equalization Rates
and Residential Assessment Ratios
1996 - 2006
Difference
Level of Equalization Residential Between
Year Assessment* Rate Assessment Ratio LOA and RAR
2006 40.00% 34.28% 31.32% 78.68%7
2005 36.00% 36.00% 35.07% 0.93%
2004 40.00% 40.00% 39.12% 0.88%
2003 48.00% 48.00% 47.42% 0.58%
2002 52.50% 52.50% 53.46% -0.96%
2001 61.53% 55.94% 61.04% 0.49%
2000 65.00% 61.53% 65.66% -0.66%
1999 71.00% 64.78% 69.26% 1.74%
1998 71.00% 71.72% 70.34% 0.66%
1997 71.18% 71.18% 70.76% 0.42%
1996 72.83% 72.83% 74.09% -1.26%
* Prior to 1998 there was no separate municipally-determined "Level of Assessment"
(LOA). The State “Equalization Rate" was used as the Level of Assessment (Uniform
Percentage of Valuation).
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