Stop Spending Money and Start Answering Questions

Nashua will see about an 7% budget increase over 2021 through 2022. In 2022, property owners will see their property assessments reset to market value. Property owners have no idea what assessment increases they will be facing.

The hired appraisal company (Vision) performing the 2022 revaluation is collecting recent sales to develop a model, along with measure & list data to create more accurate results. The measure & list depends on property owners opening their doors for an interior inspection. Few residents are likely to open their doors as the law does not require owners to do so. Updated homes with long term owners and unpermitted work can escape capture. Updated sold homes are an easy catch with MLS listings and photographs readily available. Equalizing sold verses unsold homes is almost impossible without interior inspections. This creates a real challenge when determining an equitable tax distribution.

Additionally, Vision is planning on changing how the depreciation is set on properties. The past approach at setting depreciation unfairly impacted older neighborhoods. The City and Vision have not been forthright with information on this correction.

Another challenge in creating accurate assessments is distributing the tax burden between commercial and residential properties. In the past, residential owners cried foul when the tax burden sharply shifted throwing it on the backs of residential properties. In 2018, the hired appraisal company applied an income approach to value commercial properties and balanced the tax burden between commercial and residential owners. 

For the 2022 revaluation, Vision is collecting two years of commercial sales data and 1 year of residential sales data. The Pandemic negatively impacted many businesses. In 2018, the commercial property vacancy rate was only about 4%. The City has offered no information on 2021 commercial vacancies. Given the number of businesses that closed or saw lost income,  residential owners will carry the burden created by these pandemic losses.

Many residential property owners saw their personal incomes decline during the pandemic. However, their property assessments will be increasing. These values will be based on real estate sales (not an income approach) and in this high demand, short supply market, prices are soaring. 

Before the Mayor and Board of Aldermen vote on any budget increase and further spending, they should make sure we all understand what is going to happen when Vision presses the recalculate button. Let’s have a candid discussion now about what the City expects in assessment changes and tax rate increases for 2022.