For the first time in 40 years, the New Jersey Department of the Treasury issued orders yesterday against three municipalities, including Jersey City, aiming to force local property revaluations.
Under the order, Jersey City would be required to perform a city-wide “reval” by November 2017. A revaluation involves the physical inspection of each property by assessors, who then couple it with an analysis of recent real-estate sales and comparables. New, more accurate property assessments are then assigned, which supporters say distributes the tax burden more equally among homeowners.
Jersey City has not performed a revaluation of their properties in 27 years. The estimated 2015 market value of Jersey City’s real estate was $21.6 billion, but the taxable value of those same properties was just under $6 billion. Therefore, assessed values in the city average only about 27% of actual value, and a ratio of 85% or lower is out of compliance with state law.
After being elected in 2013, Mayor Steve Fulop cancelled a planned revaluation, a decision that led to a lawsuit that should be ruled on soon. Fulop responded to the new reval order on Twitter by saying he feels Jersey City was unfairly “singled out,” as over 30 other towns in the state have similarly out-of-whack valuations.
There are indeed 32 towns in New Jersey that have not performed a reval in over 25 years. Elizabeth hasn’t had one in over 39 years and Union county has a whopping 14 municipalities that have all gone longer than 26 years without a revaluation.
Revaluations have been thrust into the stoplight locally in recent years, with Hoboken undergoing one in 2013 for the first time in 25 years. Last July, the Tax Court of New Jersey ordered Weehawken to perform a revaluation after three waterfront property owners sued, claiming the township’s assessments have created an unfair tax burden on their homes.
The impact of a revaluation on taxes and potentially home values is widely debated, although most agree there are winners and losers in the process. The city has 90 days to appeal the order, a decision that could shed some light as to how this situation will likely proceed.