Assessor: ‘It’s just amazing to see’
BY JASON STARR
Property tax bills are arriving this week with a decreased year-over-year municipal tax rate.
On June 29, the Williston Selectboard set a tax rate of 0.2721 — 27.21 cents for every $100 of property value — for the new fiscal year that began this month. The tax rate supports the $11.5 million town budget approved by voters in March.
The tax rate is about three-tenths of a cent less than last year. That amounts to a reduction of about $3 for every $100,000 of property value. For a $300,000 home, for example, the property tax is about $9 less this year. Property tax bills are due Aug. 15.
The town decreased its spending plan for the new fiscal year in anticipation of pandemic-related revenue loss and no growth of the Grand List — the total value of the town’s taxable property. But revenues didn’t decrease; Finance Director Shirley Goodell-Lackey noted that there were fewer delinquencies in tax, water and stormwater bills through the pandemic, bucking expectations. Meanwhile, the Grand List increased by about $13 million to $2.08 billion as the residential and industrial real estate markets boomed, even as the market for retail and office space softened.
Williston Assessor Bill Hinman has been stunned by the spike in local home prices over the past year. Prices have increased 30 percent since last April, double the national average of 15 percent, he said.
“It’s just amazing to see,” Hinman said. “I’ve been a home appraiser for 35 years and I’ve never seen anything remotely close to it.”
The last bull market in residential real estate, circa 2007, saw home prices increase by about 12 percent year over year, Hinman said. That was followed by the “great recession” of 2008. Hinman anticipates a similar market fall on the horizon.
“Where this ends is a very good question, and if it ends badly, it could be scary on many, many fronts,” he said, noting current trends in inflation and increased mortgage rates. “If history is any indication, I would hold onto your wallets because we could be seeing things that haven’t been seen since the ‘70s. We could be in for some significant challenges … It’s going to be state and national, not just Williston.”
In the short term, increased home prices will cause a significant drop in the “common level of appraisal” calculation that the state uses to assess school taxes. That occurs when the assessed values of homes are significantly lower than the market values, which triggers a state-mandated property-by-property reappraisal. Hinman predicts reappraisals will be needed simultaneously in many Vermont towns and cities. The home appraiser workforce won’t be able to keep pace, he said.
The town’s $13 million Grand List growth amounts to about a half-percent increase over the previous year. But there are several large commercial properties that are appealing their assessment, which is causing town officials to plan for the possibility that the Grand List will be reduced by about $7 million, resulting in about $19,000 less in revenue this fiscal year. With a reserve fund of nearly $3 million, there is little concern about the town covering the potential loss.
One of the appeals is from Brookfield Properties, owners of Maple Tree Place. Brookfield believes the town’s $83 million assessment of the retail and dining plaza is too high. With a 50 percent office space vacancy rate, several retail spaces empty and a movie theater that may not reopen, according to Hinman, the pandemic has hit the property hard. Hinman said Brookfield lost $880,000 in rent in the past year because of the movie theater’s closure. Brookfield has suggested a $52 million appraisal for the entire property.
“This is an evolving situation because of the vacant space,” Hinman said. “We really have to wait and see how this pandemic has impacted people’s habits for retail shopping.”
Hinman has suggested to the company that it convert vacant office space into apartments.
“That would be logical if their vacancy remains as high as it has been in the last 9-12 months,” he said.