Thursday, May 12, 2016

Property Type Extremes

This post examines what towns in New Jersey have the highest percentages of their total assessments in residential, commercial, and industrial property.

The tangential relationship of this topic to state aid is that it underscores that just because a town's residents may be poor, it doesn't necessarily mean that the town should receive a lot of state aid.  Likewise, a town might have a very high average income, but if its property is all residential, it may merit a substantial amount of state aid because it has a large number of students per tax base.  

The original source for this information is the Department of Community Affairs' Property Values Classification Table.  I've put it online here in a Google Spreadsheet format.

1.  Residential

The median town in NJ has 84% of its property wealth in the form of residential property.  

The following towns have the highest percentage of property classified as residential (includes apartments and farm homesteads.)

Most of the towns who are completely residential are wealthy enclaves or are Shore resort communities.  

Some towns with high incomes, like Glen Ridge, have almost no non-residential property. Glen Ridge's median household income is $160,511, but it is 92% residential and has a 1852 students for a town with a population of 7500. Glen Ridge, despite its income, only has $13,454 in Local Fair Share per student. That's above the median, but not as far above the state's median as is Glen Ridge's income.

North Haledon, who is much wealthier than Prospect Park and Haledon and who resents having to pay for a share of Manchester Regional HS that is disproportionate to its student enrollment there, is 94% residential.

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These towns are the ones with populations greater than 8,000 with the highest percentages of residential property:

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2.  Commercial

The following towns have the most property classified as "commercial."

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The median town has about 10% of its property classified as "commercial," a status that would include office buildings and retail.

It's interesting that Atlantic City has the most commercial property of any
The Prudential HQ is 1% of Newark's
town with more than 3,000 residents.  Atlantic City has been devastated in the last few years.  One reads often about how Atlantic City's Equalized Valuation has fallen from $20billion to $7 billion, but what is less often commented on is how the shape of the tax base has changed as it has shrunk.  Now Atlantic City is 28% residential by tax base, but ten years ago it was only 10% residential in tax base.

Yet, Atlantic City still has an extremely high-non-residential tax base.  It, unfortunately, still has farther to fall.

I was surprised to see that Newark was so high, but I shouldn't have been.  The valuation of skyscrapers is phenomenally high (even in Newark) and  Newark's average home is worth only $175,000

The Prudential's headquarters on Broad Street has a valuation of $108,535,600, or nearly 1% of Newark's total $12.3 million in assessment.  The Prudential headquarters thus pays $10.8 million a year in property taxes.

3.  Industrial Property

As for industrial property, the towns with the most industrial property tend to be more rural than concentrated in New Jersey's old Passaic river industrial heartland, although Carlstadt, East Rutherford, Secaucus are in the top ten.

NJ's great industrial cities of yore, like Newark, Paterson, Passaic and Jersey City, are above the median in industrial property, but below 10% industrial.  

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FYI, NJ requires that all property types be taxed at equal rates, but different property types are assessed in different ways.

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