Peterborough’s reassessment came under scrutiny from residents during Tuesday’s Select Board meeting, as the town’s contracted assessor, Marybeth Walker, fielded questions on the validity of the revaluation and its impacts on townspeople.
“It’s complex, there’s no easy answers,” Walker said. “It’s a complex process.”
Residents have questioned the calculations Walker used in conducting the reassessment and upset with increases to their home’s values, due to the impact these values have on their tax bills. According to Walker, increases ranged from averages of 11% to 30% depending on the type of building, with 30% being the average for single-family homes, the largest category of properties in town.
When the town’s overall assessed value increases, the tax rate typically decreases, as it did in this case to $25.76 per $1,000 of assessed value from 2020’s $30.84. However, if home values are up by a large-enough amount, a lower tax rate may not mean a lower tax bill.
For example, on a house that was worth $200,000 in 2020, the tax bill on that year’s $30.84 tax rate would have been $6,168. If that same property increased in value by 30% to be worth $260,000 in 2021, the tax bill on this year’s lower tax rate of $25.76 would be $6,698.
Walker explained that the reassessment became necessary due to state law requiring that town assessments be between 90% and 110% of actual market value. While Peterborough’s last full-town analysis was done in 2018, and the five-year cycle did not require another until 2023, she said the town fell to 86.8% of market value in 2020 and 71% by mid-2021.
After the reassessment, Walker said the town is now at 94.5% of market value, which is within the acceptable range. She added that she did a small-scale study of sales from Oc tober 2021 to January 2022, and found that the number had fallen to 86% al ready.
The reassessment used sales data from six months before and after April 1, 2021, and during that time, the median sale price for a single-family home was $350,000, up from $250,000 in 2018.
“You can see how the market has grown,” Walker said. “I can do my best to explain it to you, but there’s a full process that’s involved with appraising and doing mass appraisal. Multiple appraisers could attack this community and the values of this community in different ways, but in the end, it’s market value, your overall assessment — could you sell your house for that on April 1?”
Walker said that if residents believed the answer was no, then they should file for an abatement, with the deadline being March 1.
Many residents had questions relating to specific parts of the process, including the way that land value was calculated.
“How do you decide how much of that value goes to the house and how much goes to the land?” asked resident and Planning Board member Stephanie Hurley.
Walker described said that in this particular case, there weren’t enough vacant lot sales to draw upon, so she used an “extraction process” to estimate land values by calculating the worth of buildings, determining depreciation and then subtracting the sale value to get an approximation of the land value. Generally speaking, she said the overall property value was the more-important figure to consider than the value of the land.
Other residents pointed out that acreage seemed to have had an outsized impact on the reassessment, as Bob Bolt said he had noticed a pattern that smaller lots increased in value more than larger lots.
“I don’t see how that’s equalization,” he said.
Sharon Monahan, pointing to her experience in septic design and on the Zoning Board of Adjustment, said acreage shouldn’t matter to sale prices, as she knows developers who have bought parcels of varying sizes for similar prices.
“A buildable lot is a buildable lot,” she said.
Walker said smaller lots were undervalued during the last assessment, and so had to be adjusted more in order to catch up with market value. Specifically, older homes with less square footage and on land under one acre were particularly undervalued, she said.
“The smaller the house is, the more it was under-assessed,” Walker said.
This issue applied specifically to “rural” versus “urban” lots, the difference between which is partially based on acreage, she added. Urban lots are typically smaller and closer to the center of downtown Peterborough than those classified as rural, and lots that were categorized as rural were at an average of 74% of market value prior to revaluation, compared to 67% for urban lots.
“You can see why some types of properties went up more than others,” she said.
Many residents wanted to know why properties that were similar were classified by different neighborhood codes, which divide the town into different categories based on the characteristics of the properties within.
Neighborhood 101, for example, is made up of mostly urban lots with a mix of single-family and multi-unit housing, while Neighborhood 102 had mostly rural lots with some urban and a mix of single-family and multi-unit housing. In some cases, houses that fall into one category are largely similar to those in another, and sometimes the line between these neighborhoods is drawn between houses on the same road.
Walker said the line had to be drawn between properties somewhere, and that if residents believed it was unfair, they should include that in an abatement application.
Resident Ken Sarclo said the elderly population would be adversely affected by an increase in property values and, subsequently, taxes.
“I think you’re inadvertently targeting a group of people that are really vulnerable,” he said, pointing out that many elderly residents might be priced out of Peterborough.
Walker’s response was that her job could not be impacted by those kinds of considerations.
“It’s very difficult for me because I love people, I love houses,” she said. “I have to step out of who are the people living in the homes.”
Sam Greene, assistant director of the state Department of Revenue Administration’s Municipal and Property Division, spoke on behalf of Walker’s process, saying that as the DRA has overseen the process, there have been no issues with the reassessment from their perspective.
“What was done isn’t bad assessing process,” he said. “She wasn’t trying to put it to anybody.”
Selectman Bill Taylor said some of these impacts to taxpayers may be eased in the coming year due to new residential construction based on open building permits. He estimated that $7 million would be added in value just based on construction costs of new developments.
These developments, according to assessing clerk Ali Kreutz, include units being added to the Southfield development, several single-family homes and two properties on Cranberry Meadow with construction costs of around $1 million each.
“The addition of new taxable property to town means the tax burden will be spread over a higher overall assessed value, which is beneficial to taxpayers,” Kreutz stated Wednesday.