To rebuild or not? Questions about post-Sandy property values cloud recovery
Updated 7:33 am, Thursday, November 22, 2012
Don Ross' job just got harder, thanks to Superstorm Sandy.
Ross is Fairfield's assessor, and these days he's getting quite a few phone calls from property owners that leave him feeling frustrated -- residents forced from their damaged homes when Sandy came ashore nearly a month ago.
What they want to know, Ross said, is what can the town do to reflect their losses in their property assessments and tax bills. The answer? Not all that much, at least for now.
"This is uncharted territory," said Ross, shaking his head. "I've lived in this town my whole life; I've never seen anything like this."
At least five or six shoreline homes have been condemned or simply no longer exist in the storm's wake, while at least 30 others have been deemed unsafe for occupancy. It could be many months before they're inhabitable again.
There are some remedies available, Ross said, for owners of homes that have been totally destroyed by the storm and require total reconstruction.
"It's a statute that allows for a pro-
ration of the assessment of those structures," he said.
Right now, though, Ross said he hasn't had a chance to sit down with other town officials to determine exactly how that process will work.
"How the process is going to work is a work in progress, is the best way I can put it to you," he said.
But if a house was damaged, but not destroyed, is there any tax relief available?
"People have the right to go to the Board of Assessment Appeals every year," Ross said, but there's a caveat. Any request for a modification in a property's assessment has to be based on two things: the valuation of the property as of Oct. 1, 2010, the date of the last townwide property revaluation, and the condition of the property as of Oct. 1, 2012.
"The storm occurred Oct. 29," Ross said. "If anybody brings up the home's condition in an appeal, it has to be the condition as it was on Oct. 1."
And that, he said, leaves him at a loss.
"I don't know how you remedy that," he said.
State statutes govern the issue of taxes, and unlike the governor's executive order that was issued pushing back the date when property tax payments were due because of Sandy, there has been no such executive order regarding property tax assessments.
"The location creates the value and because the location has value, people build there," Ross said of the town's highly prized beach area. "What do you do when a storm comes along and changes that to the degree that it affects everything? It affects your life, it affects your family and it affects the value of the most valuable asset most of us own, and the question now is, what do you do?"
It's a question that state Sen. John McKinney, R-Fairfield, has begun to investigate, as well.
"I'm going to work with all the legislators from the coastline towns," McKinney said, and has begun putting out feelers to see if this issue could be added to the agenda for the coming special session. "We may need to look at passing an emergency measure."
Legislation, he said, could allow towns to offer relief to property owners, though McKinney said once the state enabling legislation was put in place, it would be up to the individual communities whether or not to take advantage.
McKinney said it might make more sense to pass permanent legislation providing for exemptions during any natural disaster, but added it would probably be quicker, at this time, to focus on a one-time exception for Superstorm Sandy.
Ross seems pained by the lack of any immediate answers for beach residents, some of whom are wrestling with the question of whether they rebuild their heavily damaged homes or just sell.
"The owners have to go out and get a structural engineer," Building Official James Gilleran said to determine if rebuilding is worth the cost. "There's six or seven (homes) that have to come down; the other ones will be up to FEMA and their insurance company."
If a property owner has to spend more than 50 percent of the structure's assessed value to make all the repairs, then he or she will be required to rebuild in compliance with the more stringent standards set by the Federal Emergency Management Agency.
"That's the assessed building value, without the property," Gilleran said. "For some of those properties, that won't get them anywhere. ... The piece of sand is worth more than the house is."
"To lift up a 2,000-square-foot house is going to cost about $100,000, and there's no money for that," McKinney said. "There's a lot of people with no mortgage, so they have no flood insurance."
For instance, there's the small 970-square-foot home at 2170 Fairfield Beach Road that became famous after Sandy hit because it was knocked off its foundation and into Pine Creek, where it floated for about a week, up and down the creek with the tides.
The four-room home with the finished attic, open porch and deck sat on the creek side of the road on 0.05 acres. The land on which the home sat is assessed at $468,530, but the building itself is assessed at $37,730.
When all is said and done, Gilleran said, there could be quite a few properties on the market on the western end of Fairfield Beach Road because people who have owned the property for decades can't afford to rebuild.
But federal officials are adamant that property owners shouldn't just assume they will not be able to get any help.
"The important thing to tell all your friends and neighbors throughout the community is to register," said Albert Lewis, a federal coordinating officer with FEMA. "That one step may unlock grants, low-interest loans, disaster unemployment assistance and other state or federal aid."
Even those with insurance may be eligible for help with uninsured or underinsured losses, and assistance programs are available to people of all different income levels. The type of help provided depends on an applicant's circumstances and unmet needs.
Even if damage is found later, according to FEMA, a homeowner might be eligible for assistance as long as they have registered.
Disaster assistance grants are not considered taxable income and won't effect eligibility for Social Security, Medicaid, medical waiver programs, welfare assistance, food stamps, supplemental security income or Social Security disability insurance.
And renters living in the beach area who have been forced to find a different place to live while repairs are made are also eligible for grants, and for assistance to pay for replacement or repair of necessary personal property lost or damaged in the disaster, furnishing or appliances and primary vehicles.
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