"Click the links below for a lot-by-lot look at the revaluation of property in Teaneck. For technical reasons, the Teaneck map is divided in two. The dividing line is Route 4."
Teaneck North Teaneck SouthThe article:
Teaneck's seismic tax shift
Tuesday, February 13, 2007
By BRIAN ABERBACK
STAFF WRITERS
Homeowners in Teaneck's most modest neighborhoods stand to absorb the biggest tax increases this year while those in wealthier areas will get a break as a result of updates to the property tax rolls that will shift the burden from higher-end parts of town.
The shift is the result of a state-mandated revaluation, aimed at updating outdated assessments on all properties in the town so that owners pay their fair share of taxes to support municipal, school and Bergen County government services.
For some in modest neighborhoods, the shift will be seismic, with some tax bills increasing upward of $2,000. Others will not notice much of a change from last year. For still others on more stately blocks, and commercial property owners, taxes will go up by smaller amounts and could even drop.
Residents will not receive their tax bills until this summer, when 2007-08 tax rates are set. But a computerized analysis of the new assessments by The Record found that if the property tax levy in Teaneck rises the same amount in 2007 as it did in 2006 -- 6.5 percent -- typical homeowners in more modest neighborhoods, such as the northeast section of town, will see much more than a 6.5 percent tax increase. Instead, they will likely feel the pinch of at least a 15 percent hike and, possibly, increases of 20, 30 and even 40 percent.
On the flip side, the typical homeowners in some of the town's wealthiest areas would see less than 5 percent tax increases. One such area is in northwest Teaneck near the Bergenfield and New Milford borders, known for spacious Tudors and colonials selling for $750,000 and up. Another is the Glenpointe condominium complex in the town's southeast corner.
Assessments must be updated under state law with revaluations so they reflect market value. As real estate prices change, property values in different neighborhoods rise at different rates. The longer that goes on, the more out of balance assessments get from one area to another, leaving some owners paying too much and others paying too little. By updating assessments, communities make sure each property owner pays taxes that reflect the market value of his home.
Property owners who incur the biggest percentage increases in assessments receive the biggest tax increases the year after a revaluation, while the opposite is true for those with the smallest percentage increases in assessments.
The township's northeast neighborhood, where modest Capes and colonials abound, will take one of the biggest hits from the revaluation because property owners have reaped the biggest percentage increase in home values since Teaneck's last reassessment in 1992. A separate analysis of home sales by The Record confirmed that trend.
The situation has northeast resident Kimberly France on edge. France's two-bedroom, one-bathroom colonial on Fairview Avenue was newly assessed at $330,800, up from $119,200 – a 178 percent increase, which was far more than the townwide median of 132 percent.
France will face a $1,571, or 28 percent, tax increase if this year's tax levy jumps another 6.5 percent. (Taxes went up 5.4 percent in 2005, and 5.5 percent in 2004.)
"I'm not making the kind of money where an extra $1,600 is not going to make a difference," said France, an office worker. "I know a lot of families on my block that are struggling. It's got me scared."
France said she will probably look for a second job to help make ends meet.
Sherri Scott said she understood why the assessment on her Garden Street home increased 163 percent, from $131,300 to $345,600. "The house is definitely worth more than $130,000," Scott said.
Still, Scott said she worries about how she and her friends and neighbors will cope with the large increases. Scott is facing a 22 percent, or $1,328, tax increase if the levy jumps the same amount as last year.
"The taxes are going to run people out of town," Scott said. "In a few years when I retire I'm going to have to leave Teaneck."
The fact that owners of modest homes will see the largest tax increases does not surprise Rick Del Guercio, a partner with Appraisal Systems, the Ridgewood-based company that conducted the Teaneck revaluation.
"Entry-level homes are appreciating at a much higher pace than high-end homes," Del Guercio said. And not just in Teaneck.
It's a trend Del Guercio had seen in revaluations across North Jersey, due in part to the low-interest mortgages requiring little or no down payment that have spurred the market for first-time home buyers over the past decade.
"The market for $300,000 to $400,000 homes in Teaneck is much greater than the market for $1.5 million to $2 million homes," Del Guercio said.
To be sure, there are residents of more expensive homes who will also feel the pain of the revaluation. Some owners of homes on Winthrop Road, one of the township's priciest streets, could face 20, 30 and 40 percent tax hikes.
But more than a third of the road's 133 homes could see tax decreases, compared with only three of the 73 homes on Stuyvesant Road in the northeast section of town and none of the homes on Garden Street, also in the northeast.
Township officials said the revaluation should not be looked at as the town raising or lowering taxes but as a rebalancing of the tax structure.
Those who will pay more than average this year have been paying less than their fair share of taxes in the past, officials said. And those who will see less-than-average tax increases or pay less than last year have been overpaying in the past, they said.
"I think most people understand what has happened in the market and that things have changed significantly since 1992," said township Tax Assessor James Tighe.
Judging from a review of home sales in the past few months, Tighe said the revaluation appears to be accurate.
"I've been checking the latest sales that have been coming in and the numbers are almost right-on," Tighe said. "But over time is how you tell whether it's going to hold together or not."
Owners of retail, office, industrial and apartment buildings generally fared better than homeowners because residential growth in Teaneck has outpaced commercial growth the past 15 years.
Before the revaluation, homeowners had been paying 84.9 percent of all tax revenue collected by the town, with commercial property owners paying the rest. The revaluation furthered the disparity slightly: homeowners now shoulder 86.2 percent of the tax pie.
Among commercial property owners, John Davino stands to pay nearly $1,550 less in taxes this year on his three properties on Queen Anne Road if the tax levy increases the same amount as last year. His assessment rose only 94 percent.
Davino, who owns Cortley Cleaners, said he would reinvest any money he saves back into his properties.
"If I had a tax decrease, I certainly could enhance the building," Davino said. "Which in turn is going to enhance the business and the community."
But Davino added a caveat: He won't believe his taxes are going down until he sees his tax bill.
Township officials are well aware of the apprehension and uncertainty that homeowners feel as they wait for their tax bills to arrive. Mayor Elie Y. Katz has mentioned the revaluation several times as the Township Council has worked to craft the municipal budget over the past month.
"The reval is the foremost issue in my mind," Katz said. "We must bring in additional revenue to Teaneck to help relieve the tax burden to all the taxpayers."
E-mail: aberback@northjersey.com and sheingold@northjersey.com
Modest homes bear the brunt
The northeast section of Teaneck and other lower-priced neighborhoods are due to bear the brunt of the property revaluation taking effect this year in Teaneck, while property owners in wealthier areas and commercial streets generally can look forward to below-average tax increases, and possibly tax cuts. The map and chart are based on increases in property assessments set in the revaluation. Actual tax bills will go out later this year after municipal, school and county tax rates are set. Owners whose assessment rose more than about 130 percent will see above-average tax increases; others will see below-average increases.
Source: Bergen County Board of Taxation/New Jersey Treasury Department, Staff analysis by Dave Sheingold
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