Providence. (Photo, Brian McDonald)
It’s called fair market value, but some 2,600 property owners, mostly from Providence’s East Side, dispute that interpretation.
When all 42,000 taxable real estate properties in Providence were assessed and revalued by Cole-Layer-Trumble Company from Connecticut at the beginning of this month, about 6 percent of those property owners made appointments to dispute the new values their properties were given. Cole-Layer-Trumble was hired by the city to do the revaluation, the first in the city since 1987.
Irene and John Twomey own three properties on the lower East Side, two of which were valued at 61 percent higher than when the property was last evaluated in 1987. They believe the increase was so drastic because the properties were lumped in with other houses in more affluent areas of the East Side. Looking optimistic after their informal review with Cole-Layer-Trumble Company representatives, they voiced their opinions.
“We looked at how they arrived at that number,” said Irene, “and they used the houses near Blackstone Boulevard.”
When an area is reevaluated recent sales of houses in that area are taken into account to determine the worth of each individual house.
“When you consider the East Side, that’s everything east of North Main Street,” said John, “but our area is southwest of Camp Street, and that’s the Mount Hope area, which is the troubled part of the East Side. There are drug sales there and subsidized housing.”
The couple said they bought their properties on Locust Street and Jenkins Street with the intention of making renovations to them, and thus improving the overall neighborhood. Although they have done a lot of renovation on the houses, they said they charge affordable rents. If the new numbers from revaluation are not knocked down, the couple will have to pay more property taxes, and in turn have to charge more rent.
“It could actually put us out of business if they raise taxes so much that it’s not worth our while to continue to do (what we’ve been doing),” said John, “because it directly leads to increases in rents.”
Irene said the properties were purchased in the last three years, and they did not pay “nearly what they were assessed at.”
“I wouldn’t be able to sell them at that price either,” she said. “It’s very unrealistic.”
Ralf Carriuolo purchased his house on Butler Avenue in the Wayland Square area, also on the East Side, for 37 percent less than the price at which it was valued. The house saw a 67 percent increase since the 1987 evaluation. He thinks part of the problem is houses in different areas being counted as a larger area.
“I think revaluation is appropriate,” he said, “but it’s just the issue of how much and I think it’s a blanket approach people might have to take, but let’s pinpoint it a little more.”
Debra Christy, senior project manager for Cole-Layer-Trumble Company, said she has seen a lot of frustration from the people who have come into the informal review sessions.
“Certainly there’s people that are frustrated, but when you’re dealing with as large a number of people as we have, we certainly expect to have frustration,” she said. “Some people don’t understand the process and we just try and do the best we can and help them understand it.”
Christy said her company doesn’t set the prices, it’s the people that buy and sell property.
“We just analyze,” she said.
Christy also said most of the people she has seen have been East Side residents.
“Certainly the East Side has seen the biggest overall increase, and certainly you’re going to hear a lot more from them,” she said. “You don’t hear from the happy people.”
The average value of single-family houses on the East Side increased 33 percent, while multi-family houses increased 14 percent. Christy said only a small portion of the complaints have been from other areas of the city.
“The market is just hopping over there,” she said. “For the last two years the East Side has just been happening.”
Cole-Layer-Trumble Company began the revaluation process two years ago.
Robert Scaralia, president of the Greater Providence Board of Realtors, said it is unfortunate for these homeowners that the revaluation was done at a time when the market is so tight.
“Typically when a town or city does reassessment,” he said, “at the very point they did it, the price they’re coming up with should be reflective of what the market would actually bear at that time.
“It’s just a snapshot,” he said, “and if the market changes that number would be all washed up.”
Speaking of washed up, Providence may just have picked the perfect time to take this snapshot of the real estate market. Professional services and accounting firm KPMG just released the results of a survey which polled 120 senior level real estate executive nationwide and found that 48 percent thought property values would decrease in the next year, given the state of real estate markets and the current economic environment.
Only 9 percent believed there would be an increase, while 43 percent forecast the values would remain the same.
