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City Assessor Alex Pullen: Crunching the numbers.
The final numbers are in: New Haven’s taxable grand list grew by over 32 percent — to a whopping total of nearly $8.9 billion — at the end of a citywide revaluation cycle that saw the local housing market overflowing with cash.
At least for those buying, selling, and investing in real estate.
That is the outcome of the city’s 2021 “full revaluation” — a comprehensive reassessment of the combined value of all real estate, motor vehicles, and personal property in New Haven.
The state mandates that every municipality undertake such a reval at least once every five years to try to bring local properties’ official, taxable values in line with their actual market worth. The taxable grand list represents the single largest source of revenue in any given year’s city budget, as it determines how much the city can collect in local property taxes.
On Jan. 31, city Assessor Alex Pullen signed off on New Haven’s new official grand list numbers.
On Friday afternoon, as he and his staff raced to send out assessment appeal notices in advance of the Feb. 20 deadline, Pullen spoke with the Independent about the eye-popping leaps in property values that the city has seen since its last full reval in 2016. (See below for more details on the appeal process.)
$8.89B Taxable; $9.88B Tax-Exempt
So, after over a year’s worth of work by Pullen’s office and the city-hired appraisal contractor Vision Government Solutions reviewing all of the city’s roughly 27,000 properties, here are the final numbers:
Pullen said that New Haven’s taxable grand list is now $8,898,999,006.
That’s $2.1 billion higher than the city’s previous taxable grand list of $6,712,653,144 — marking a 32.5 percent jump from five years ago.
In comparison, the last time the city did a full revaluation in 2016, the grand list rose by about 11 percent.
The city’s tax-exempt properties also grew in value by leaps and bounds during the most recent revaluation.
Pullen said that tax-exempt properties in town are now worth a total of $9,883,981,017.
That’s over $1.3 billion higher than their previous valuation of $8,507,435,687 — representing a 16.1 percent hike.
Included in that $9.8 billion number are $4.23 billion in tax-exempt properties owned by Yale University. Pullen said the value of Yale’s tax-exempt holdings increased by nearly 20 percent, or by roughly $690 million, during this latest reval. He said the university’s taxable properties also increased in value by around 28 percent, to a total of roughly $161 million.
What all of this means for city property owners’ tax bills is still TBD.
That’s because the taxable grand list is one of two key factors that determine a local property’s tax liability.
The other key factor is the mill rate — which equals $1 in taxes owed for every $1,000 in assessed property value. The mayor and the Board of Alders set the mill rate every year as part of the budget-making season that ends in late May or early June. New Haven’s current mill rate is 43.88.
The new grand list is effective as of Oct. 1, 2021. It will remain in place for the next five years — assuming that the city waits the state-defined maximum before conducting its next full reval. (The city does make relatively minor adjustments to the grand list every year in between revals as, for example, properties move from taxable to tax-exempt uses, and as properties phase into larger tax liabilities thanks to the city’s tax assessment deferral program.)
The first local tax bills to feel the effect of this new grand list, meanwhile, are those that will go out in July 2022.
"A Lot Of Money Out There"
While just how large July 1’s tax bills will be remains uncertain, these latest reval numbers offer the most comprehensive look to date at how New Haven real estate has surged in value during the ongoing pandemic.
“The biggest change for me is that we’re seeing a lot of money out there,” Pullen said when asked for his key takeaways about the end result of the latest city reval. “There’s a lot of money in the market. Residential owners are willing to pay a premium to move into New Haven. And commercial investors are willing to pay more than the cash flow dictates a property to be worth.
“We’re seeing that the market is very different in 2021 than it was in 2016. It’s undeniable how much money there is in the market.”
Pullen said the real estate portion of the taxable grand list grew by over 36 percent since 2016 — from over $5.5 billion then to over $7.6 billion today.
That includes a 38 percent jump in assessed values for residential properties with four or fewer dwelling units, a 53 percent increase in assessed values for apartment buildings with five or more dwelling units, and a 29 percent jump in assessed values for non-residential commercial properties.
Investor Vs. City Approaches To Valuation
The Independent asked Pullen about why large apartment complexes and commercial properties have continued to sell way above their official city-defined values, even after the latest reval.
Dedicated Independent commenter Kevin McCarthy has pressed this issue under recent articles about, for example, the sale of the 42-unit East Rock luxury “Whitney Modern” apartment complex in December for more than twice its post-reval appraised worth.
Pullen said that these “commercial” properties continue to sell for so much more than the city thinks they’re worth for tax purposes because the city and real estate investors approach valuations of these properties in different ways.
“The city is thinking about: ‘What is this property worth at this point in time?’ ” Pullen said. “We’re capitalizing one year’s income stream. We’re thinking: ‘What is the property worth at this time of the revaluation?’ ”
That’s different from what investors think about, especially in a hot real estate market with rapidly rising values.
“They may want a property so they can get favorable mortgage terms to pull money out of the property,” Pullen said. Or they may want to “establish a stronghold in a city like New Haven,” and thereby achieve an “economy of scale” and its associated lower management fees by owning more large properties in close proximity to one another.
“Institutional grade investors” also look 10, 20, 30 years ahead, Pullen said, when determining how much to spend on buying a property at the present time. When doing its own valuations for tax purposes, Pullen said, the city can only look at what the property is worth at this very moment — not what it might be worth decades hence.
How & When To Appeal
Pullen said that the annual deadline for appealing one’s newly assessed property value to the city Board of Assessment Appeals is Feb. 20.
Click here to access the assessment appeals application form.
Because that date is a Sunday this year, any application sent by mail or hand-delivered to City Hall must reach the assessor’s office by Friday, Feb. 18 at 5 p.m. at the latest.
Property owners can also email the assessor’s office by Sunday, Feb. 20 at 5 p.m. with an appeal application. Income-eligible elderly property owners can also visit his office to apply for an “elderly benefits program.”
“Taxpayers have their right to appeal” their property assessments, Pullen said.
But it’s important to note that assessments can go up even if a property owner hasn’t done any work to their home over the past five or 10 years, and even if the property owner is on a fixed income, he said.
Pullen urged local property owners to ask themselves the following question before they move to appeal their new property assessment: “Do I think I can sell my home for what the assessor says it’s worth right now?”