June 18, 2018
Senator Sandra B.
Cunningham
Assemblyman
Nicholas Chiaravalloti
Deputy Majority
Leader
837
Broadway
1738 Kennedy Blvd
Bayonne,
New Jersey 07002
Jersey City, New
Jersey 07305
RE:
Revaluation of
Real Estate
Dear
Senator
Cunningham and Assemblyman Chiaravalloti:
We
noticed your recent attempt at legislation
to delay the very large tax increase many homeowners in Jersey City are
about
to receive due to the delayed revaluation (reval) of property. Public reports note that
your suggested
legislation will not receive enough support for it to be enacted.
Most
legislators do not understand that the
problem with a large tax increase for some property owners is not
unusual, and
it is not a unique event in New Jersey after reval .
I admit Jersey City’s leaders for many
years
did everything possible to be the kings of following bad public policy
and
these tax increases may be the largest tax increases ever occurring in
New
Jersey. Attached is
a demonstration of a
property in Jersey City that will have its taxes more than doubled in
2018. It should be
noted that the
mortgage example only consists of the tax payments and does not include
the
additional payments for principal, interest, escrow, insurance, etc.
My
office is suggesting legislation that may
have a better chance of receiving support in Trenton because it will
help those
homeowners that receive unconscionable large tax increases, not just in
Jersey
City, but for other cities that can be anticipated in the future. It is a loan program for
taxpayers who will
receive these large tax increases after a reval.
When
a reval causes a very large tax
increase, many property owners will be desperate to sell at prices much
less
than the property is truly worth.
When
those properties sell at less then the true market, all those
properties that
received a large tax increase can have their taxes appealed by the new
property
owner allowing those properties to pay less taxes than if the recent
sales would
have sold at the true market value.
These tax appeals will cause the
municipality to have less ratables to
tax, and in turn
increase taxes for all
property owners
including those that received tax relief due
to the reval
and deserve that tax relief.
We
are suggesting that if a property owner
receives a tax increase of 25 percent or more, the city will be allowed
to
borrow the money it needs to allow those property owners to pay the
large tax
increase over a five-year period.
The
loan will become a lean on the property. Can you image a property owner
that is
making monthly real estate tax payments to a bank for $1,300 and in
November
has to come up with a check for $13,000?
THAT IS ONLY FOR TAXES!
It
was not the reval that caused the
problem. It was
local, county and state
officials that took an oath, but neglected to perform their duties for
many
years.
This
proposal will not only give relief to
Jersey City taxpayers, but will also assist many taxpayers in the
future for
more than 40 cities in New Jersey.
This
is the total amount of cities that presently should have completed a
revaluation of property for many years.
This means that a deficiency of
responsibilities by local, county, and
state officials does not only exist only in Jersey City or Hudson
County but it
travels throughout New Jersey. State
statutes and regulations have guidelines when a municipality needs to
do a
reval in a timely manner, and if they do not, the county is required to
order
such. When both the municipality and county do not perform their duties
properly the last safeguard is for the state to order the revaluation
of
property. The
exception is when
properties owners petition the courts that they are over- taxed due to
a lack
of a completed revaluation, as recently occurred in Weehawken.
No
one can deny the issue in Jersey City was
compounded when Jersey City leadership cancelled the first reval, only
to spend
millions of tax dollars over the next few years to promote the city,
followed
by millions more spent to defend their poor decision in court to cancel
the
first reval. This promotion created an exponential demand of real
estate in
certain sections of the city, causing some property types in those
sections to
be sold for a much larger increase in sale price than was normal. In fact, our
recent study of downtown Jersey
City shows sale prices increasing two years in a row by more the 20
percent;
more than its usual annually increases of approximately five percent. Most would agree the
comparison sales used to
assess those properties receiving the recent unconscionable large
increase in
taxes would have assessed for less if the first reval was implemented,
making that
tax increase more realistic
Additionally,
allowing many taxpayers that
need to sell because of the tax increase a one-year relief will
decrease their
need to hastily unload their property. This type of marketing of
property will
most definitely cause properties to sell for much less than the market
would
supply if the homeowner was not so desperate to sell because the
monthly cost
to maintain the property has become unrealistic for them. Preventing this will be
good for all
taxpayers. If these
properties are sold
for a lower amount than the fair market value it will cause a greater
number of
tax appeals for many years.
We
estimate there are more than 4900 Jersey
City homeowners that received a tax increase of greater than 50%. Weehawken that completed
their reval this
year and is a much smaller municipally we estimate more than 70
homeowners that
will receive a tax increase of greater than 50%. In 2019 Bayonne we
experience
the same issues because their reval should have been done years ago.
You may
have noticed we used the term unconscionable for these large tax
increases since
we have had state court decisions that have referred to rent increases
over 20%
as unconscionable.
We
request you take our suggestion judiciously
and if you wish to discuss our recommendations further please call me
on my
direct line 201-988-3977
Sincerely,
Joseph
W. Hottendorf,
Executive Vice President
110A
Meadowlands Parkway, Suite 103 •
Secaucus, New Jersey 07094 • 201-867-4415
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