Council to Consider How Apartment Complexes Assessed

The Town Council will reevaluate the way apartment complexes are assessed, with the hope of clarifying the matter to themselves and the public.

Resident Ernie St. Pierre spoke in the public forum of a recent Town Council meeting, asking the Council to look into apartment complexes not paying their full share of the town’s property tax, and shifting the burden to the private homeowner. “I would be happy to be the ‘squeaky wheel,’” St. Pierre said. “This has gone on too long.”

St. Pierre added, “My house is assessed at $200,000. I can’t come down here and say, ‘I’m not paying that.’”

Council Chair Brian Chirichiello, who is a Realtor, explained that some people think apartment buildings do not pay their “fair share” of taxes. “I am not sure,” he said, “how much truth there is to that.”

While private homeowners often think they are unfairly assessed, the burden of proof is on them, Chirichiello said, adding, “You have got to prove it.”

But owners of commercial buildings who think their property is assessed too high will often come up with “comps,” or comparable properties, to prove their point. Often these comps are in a part of the country with lower property values and taxation, according to Chirichiello.

But rather than go to court, the towns will look at these properties and come to an agreement, and it’s usually under the original assessment, he said.

“Without an agreement, they will go to court,” he said. “It’s much easier to find a middle ground.”

The rumor going around, he said, is that many Derry apartment complexes are not paying their fair share of taxes based on their actualized valuation. And this raises the question of how many children are in the buildings, that the town has to educate, and how much of the burden is shifted to the single-family homeowner.

While Chirichiello declined to take a position on the matter, he said he is hoping to bring in an official from the New Hampshire Department of Revenue Administration (DRA) to shed a light on the topic.

Assessor Barbara Chapman said she has also heard the allegations. But Chapman said there’s more than one factor involved.

For one thing, she said, it isn’t always effective to “comp” Derry’s apartment complexes with those in other towns or states. “We have an older stock of buildings,” she said. “The average age of the apartment complex buildings is 40, so we can’t compare them.”

Chapman said the age and condition of Derry’s larger apartment complexes leads assessors to “factor them down a tad” when determining value.

The other problem with Derry’s apartment complexes, she said, is that they need maintenance. “So it’s not fair to compare them to those in other towns,” she said.

Chapman said she has discussed the matter with her consulting firm, Corcoran Consulting Associates. The town puts the consulting services out to bid and has had Corcoran “off and on since the ‘90s,” she said.

She and the Corcoran staff have also discussed the Low-Income Tax Credit offered by the Federal government, she said. While there are some Section 8 units in Derry, that usually leads to a lower valuation, but not necessarily a “tax break,” she said.

Chapman also pointed out that three of the town’s largest apartment complexes are in the Top 10 of property taxpayers for 2015, with the Fairways leading the list and Gilbert Campbell’s Aladdin Village and Country Club Estates tied for second.

Having the DRA in to explain assessing is “not a bad thing,” Chapman said. She is also hoping to have a representative of Corcoran Consulting come in and conduct a workshop or presentation with the Council.