2005/06/15 Council Agenda Packet

I increased 165 percent;. the survey blockfrornts increased 68 percent. in Study Area 2 during . that period, the control blockfronts increased 134 percent; the survey blockfronts increased 18 percent. However, in the other four study areas, total assessed valuations increased by a greater percentage on the survey blockfronts compared to the control blockfronts. In Study Area 3 (the Bronx), the total assessed valuation on the survey blockfront increased by 164 percent over the six-year period; the control blockfront increased 155 percent. In Study Area 4 (Brooklyn), the total assessed valuation on the survey blockfronts increased 78 percent; the control blockfront by 19 percent. Study Areas 5 (Queens) and 6 (Staten Island) had increases of 153 percent and 202 percent on the survey blockfronts, and 149 percent and 88 percent on the control blockfronts, respectively. There are several additional reasons why the assessed value findings are necessarily ambigu- ous. First, the survey blockfronts tend to be commercial strips or shopping streets. Commer- cial property in a stable area is likely to have assessed values updated with greater frequency by assessors, who take into account income and expense data that tends to have a net overall positive effect with inflation. Under the Direct Income Capitalization method used by assessors, this tends to yield a higher assessed valuation. Second, the adjoining community district tends to contain a greater proportion of residential property, which is subject to legal limitations on the increase in assessed valuation. Since 1983, residential property in Class 1 (primarily one- to three-family houses) have had their potential annual assessment. increase limited to six percent and their potential maximum five-year increase capped at 20 percent (unless the increase is due to a "physical change" such as construction). In addition, in the absence of a sale, residential property tends not to be reassessed, particularly compared to non-residential property in an active area. Third, the total assessed value of the survey blockfronts is very small as would be expected compared to the community districts; in some cases less than one percent. While trends in the community district would tend to be reflective of local area trends, the magnitude of the survey blockfront component of total assessed value in the district is so small that its contribution to the community district trend would tend to be imperceptible, whether its specific impact was negative or positive. E V ER00156 58