York homeowners face sticker shock as property values soar: 'Massive and abrupt tax hike'

YORK, Maine — One neighborhood at Long Sands Beach is suffering from sticker shock this year, with rising home prices causing some valuations to go up 30-50% or more.

Joe Kelly of 4 Jo Lenes Drive and his neighbors came to Monday’s Selectboard meeting to sound off during public comment on a letter many received from the town assessor in April. He said letters about taxes going up are expected following an adjustment to property values.

“This time, the letter came with a bang,” Kelly said. “And a significant rise in tax liability.”

The neighborhood, he said, has been reeling since receiving the letters warning of the hike in their tax bills. He told the board his neighborhood saw their property values increase an average of 37%, with one home going up 75%. Another saw its value go up 92%, he said.

“Many of us understand, I think we all do, that our homes may or may not have been undervalued,” Kelly said. “But to have such a massive and abrupt tax hike, placing us at the highest assessment increase in town does not seem equitable or fair.”

The neighborhood is learning through the town assessor that not much could have been done to avoid the hike in property values. The real estate market has skyrocketed since the COVID-19 pandemic, with homes in York selling in some cases more than $1 million than their previously assessed value.

Town Assessor Luke Vigue met with many of the residents this summer to talk about their property values. He explained how state law and Maine's constitution lay out a strict process he must follow in assessing homes.

“What happened here was a shift in taxes, redistributing the tax burden,” Vigue said.

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Southern Maine has seen homes rise in value for the last three years as people continue to flock to the state. New construction has also slowed since the 2008 housing crisis, Realtor Troy Williams said last year, which poised the market for rising prices when the pandemic occurred.

York has reassessed property values annually since 2002, following the last town-wide revaluation conducted with an outside company. Vigue noted that prior revaluations were spaced years apart, prompting the town to switch to yearly assessments 22 years ago to minimize tax bill shocks for residents.

“The increases are typically on a smaller scale,” Vigue said.

Neighborhoods in York are divided into sections, with homes grouped into parcels of about 200. Vigue explained that the annual property assessment process involves a two-year real estate sale study to determine new values. While sales were down in 2020, the following two years saw a significant surge.

That has resulted in a surprise for many living in some of the higher-priced neighborhoods. Last year, Vigue said residents in the neighborhood overlooking the Nubble Lighthouse experienced a similar shock to what the residents on Jo Lenes Drive and neighboring streets expressed Monday night.

This year, Vigue said the neighborhood that includes Jo Lenes Drive, Garrison Avenue, Bayview Avenue and Beechwood Avenue – labeled Neighborhood 135 in the assessing process – was the next to experience such a hit. The neighborhood is just off Long Beach Avenue and a short walk from Long Sands Beach.

Vigue said the two-year sale study between April 1, 2022, and April 1, 2024, showed 14 home purchases with several properties selling for well above their assessed value. The home at 15 Beechwood Ave. was valued at $797,800 before it sold for $1,750,000, according to Vigue’s data. That led to a new value of $1,323,800.

At 21 Bayview Ave., the home sold for $1,149,000, and its value jumped from $588,300 to $1,089,700. When the home at 57 Garrison Ave. sold for $1,595,000, its property value went up from $882,000 to $1,270,300.

Vigue said those new values are in line with Maine’s constitution, which requires assessors to assess all properties at the “just value,” he explained in his letter to residents in Neighborhood 135. By phone Tuesday, he said assessments must have at least a 90% sales ratio, which is the old value divided by the sales price. His data shows many homes that saw big changes in values were only at 45.59%, 51.20% and 55.30% ratios.

“This is telling me, wow, I’m way too low in this neighborhood,” Vigue said.

The amount paid in taxes each year depends on more than just property value. The town’s tax rate is $8.40 per thousand dollars of property valuation, down from $11.15 per thousand in 2019.

Despite this decrease, Vigue noted that the significant increase in property values for residents in the Jo Lenes Drive area means some will still see higher tax bills.

"Some values went up 40%, while the tax rate only decreased by about 1%,’ Vigue explained. "The tax burden was redistributed more heavily to this neighborhood.”

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Residents blame short-term rentals, ask town for help

Residents question whether the neighborhood’s values are being impacted by the rise of short-term rentals. Brownell said he believed the income from renting out homes every week allows rental owners, including corporations, to pay higher prices for properties.

Vigue said it is impossible to tell which homes are short-term rentals in town because of a lack of any registry that shows where they are. Selectboard Chair Todd Frederick invited residents interested in discussing this to join a new committee being formed to study short-term rentals in the wake of a proposed ordinance that failed at the polls in May.

Vigue said residents have been cordial with him as they come into his office asking for an explanation, and he said they understand their property values have gone up. Their gripe, he said, is why the tax bills need to be paid all at once given the surprise.

“We feel that it should be spread over eight or 10 years probably, rather than all at once,” said Wayne Brownell, Kelly’s neighbor on Jo Lenes Drive.

Brownell said they live there 25% of the year, the rest of the year in upstate New York. He said they love York, but with his property value going up about 36%, he said it may no longer be worth it.

“We want it, we like it, but it doesn’t make sense if it’s going to go crazy,” Brownell said.

Vigue said that changing the timeline in which taxes are paid would be unconstitutional, however. Frederick agreed there was little the town could probably do to ease the burden on the properties that saw such a hike in value.

“I don’t think there’s a lot that the Selectboard can do. We’re governed by state statute,” Frederick said. “There can’t be political meddling.”

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This article originally appeared on Portsmouth Herald: York homeowners face sticker shock as property values soar: 'Massive and abrupt tax hike'