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More than 400 Nassau homes undervalued in rush to complete tax reassessment

More than 400 homes under construction, like this

More than 400 homes under construction, like this one in Great Neck Estates, were undervalued during the rush to complete the Nassau property tax reassessment. Credit: Nassau County

Nassau officials undervalued more than 400 homes by tens of millions of dollars as they raced to complete the tax roll for Nassau County’s sweeping property reassessment, a Newsday analysis has determined.

The properties — all of them new, recently renovated or under construction — were in some cases appraised only for their land value, as if nothing had been or was being built.

One of those was a Great Neck Estates property with an under-construction, 7,000-square-foot home. The property was valued at $1 million, which is what the county’s appraisal system determined the half acre the home sits on is worth. That essentially values the home as worthless, even though it was 60% complete three months before the reassessment was wrapped up. When finished, the home will be worth $3.1 million, according to the county’s appraisal system.

Another property in Seaford is worth $777,000 with a brand-new, 2,500-square-foot home along a canal, according to the county’s appraisal system. But it was valued on the assessment roll at $248,000.

In both cases, the county’s values failed to reflect what inspectors found during recent visits to the sites, even though they had entered their results into the county’s computer system. Other assessment department employees then ran out of time before conducting appraisals based on the inspections, county officials said.

County Assessor David Moog said some of the errors cannot be corrected due to restrictions in state law, but he will correct as many as possible before the grievance period for the roll is finished in April. In the aggregate, the errors could save the property owners hundreds of thousands of dollars in taxes, Newsday estimates.

Moog said the errors resulted from low staffing levels in his department, which was slashed by 45% under former County Executive Edward Mangano. That left seven building inspectors — compared with 30 previously — to identify property changes and value them before the annual Jan. 2 deadline to complete the roll. Yet Moog submitted corrections for 193 properties with similar errors after the deadline and said he was still determining why those identified by Newsday were not among them.

“I understand your frustration when you look at these numbers and you feel like values are being missed,” Moog said. “It’s a timing issue and it’s a staffing issue, and some of these are going to be corrected.”

But Moog had been on the job for five months when the errors were made and Republicans, who have often criticized him, have argued the positions should have been filled far faster than they have been.

“Why does there seem to be no sense of urgency behind that?" Legis. Steve Rhoads (R-Bellmore) asked Moog during a March hearing.

“Are you going to be able to release a roll that’s going to be accurate with the personnel that you presently have?” Rhoads asked Moog.

In a recent interview, Moog said that since August 2018 he first worked with the county Civil Service Commission to make department job classifications more flexible and up to date. Then, his department contacted nearly 900 potential candidates applicable to those classifications, interviewed 230 of them and hired 42. Work continues to fill another 65 positions, which Moog said remain unfilled in part due to a lack of interest in the department’s salaries in a tight labor market.

Moog said the county is also implementing several other improvements that will reduce errors, including preparing written standard operating procedures the department has long been criticized for lacking.

The 417 errors identified by Newsday had a minimal effect on the overall accuracy of the assessment roll, which has nearly 400,000 residential properties worth $252.6 billion. Three studies, including one conducted by Newsday, have found the roll to be about as accurate as possible, with an industry-standard error rate of less than 9%.

The undervaluations came after nearly two years of criticism over tens of thousands of clerical errors in reassessment notices and on the county website during the rollout of the reassessment, which has been County Executive Laura Curran’s signature policy initiative.

Curran, a Democrat, took on the reassessment to correct mass inequities caused by her predecessor Mangano’s 2010 overhaul of the tax system. The overhaul shifted more than $2.7 billion in tax burden from those who challenged their assessments successfully — often receiving essentially automatic tax breaks — to those who did not, Newsday found in its investigation of the overhaul.

The 417 properties on the new roll identified by Newsday were valued at $161.3 million less than the county appraisal system determined they would be worth on completion. That amount of value would generate about $2.8 million in taxes during one tax year, or about $8 for each residential taxpayer, according to a Newsday estimation. But since 75 of the houses were not completed, the tax shift will be lower.

That compares with a one-year shift of up to roughly $5,347 for each taxpayer who did not challenge successfully by the eighth year of the Mangano overhaul.

Newsday’s analysis found 342 newly built or recently renovated homes that county officials valued on the new assessment roll at least 20% below what the county's appraisal system determined they were worth. The other 75 homes were still under construction and according to county data were at least 60% complete. Nonetheless, they were valued at just 30% of what they were worth or less, according to county records.

For example, one under-construction, 3,400-square-foot Manhasset home was 80% complete in October 2018, according to its county inspection. The county's appraisal system says the home will be worth $2.4 million when completed, but it was valued at $701,000 on the new assessment roll.

Renovations on a 2,700-square-foot Massapequa home had been completed more than three months before the reassessment deadline. The property is valued on the assessment roll at $473,000, but the county's appraisal system says it is worth $1.1 million.

Moog said county inspections result in a report being sent to the department’s “pricing unit,” which determines how much the properties are worth in their current state. That unit was unable to finish valuing all of the properties, Moog said.

“We always strive to have all of them on the roll,” Moog said of the properties with missing value. “We never get it down to zero, but you would get it down to a negligible number of properties.”

It is not unusual for assessors to fail to incorporate the value of recent construction or renovation work onto their assessment rolls, said Larry Clark, director of strategic initiatives for the International Association of Assessing Officers, which sets the standards used by assessors and governments to gauge assessment accuracy.

“You increase that likelihood where there is a smaller staff,” Clark said.

CORRECTION: A previous version of this story misstated the amount of taxes that would have been shifted if the properties were accurately assessed, due to an editing error.

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