Why Should Delaware Care?
Since New Castle County completed its tax reassessment earlier this year, both Wilmington residents and city officials have criticized its outcome, saying it exaggerated property values and drove up tax bills — especially for lower-income residents. Mayor John Carney is now rolling out a plan that could lower future bills, but it will require residents’ assistance.
After months of public outcry over new higher tax bills for city residents, Wilmington leaders are proposing a plan to fix disputed property assessments – but homeowners will need to allow assessors to review the inside of their homes.
Mayor John Carney, who announced the initiative Sept. 25, said the city plans to hire a third-party company to conduct samples of interior assessments and appraisals of residential properties on a block-by-block basis for neighborhoods that were assessed “too high.”
After the assessments are complete, the city will then present the data to New Castle County in hopes that the county will accept the new numbers, which could potentially lower how much some residents pay in property taxes on future bills.
“Our goal is to make sure there’s fairness and equity across classes of property and among homeowners and among the various neighborhoods in our city,” he said.
The proposal comes after months of complaints from residents throughout the state, especially in northern Delaware, where many homeowners saw a sharp tax bill increase as a result of the first statewide reassessment completed in more than four decades.
Carney said that New Castle County officials are supportive of the initiative as long as the city can provide “legally appropriate and statistically appropriate information.”
New Castle County did not respond to Spotlight Delaware’s request for comment.
The city’s plan has a strong focus on lower-income areas in the city, such as Hilltop, Vandever Avenue and Southbridge, where property taxes have doubled and tripled, according to a heat map the city displayed during the press conference.
The proposal requires the city council to approve a $500,000 budget amendment to fund the project. The amendment will be presented as an ordinance to council on Oct 2.
There is no timeline for when the city’s assessment aims to be completed.
Wilmington reassessment fell ‘outside standards’
The reassessment was part of a statewide effort to update land values that hadn’t been reviewed in decades. It also followed a 2018 lawsuit by the NAACP and education advocates, who argued that outdated valuations created inequities among schools that rely on property taxes for funding.
All three counties separately awarded their contracts to carry out the process to the Texas-based company Tyler Technologies.
But after the assessment was complete, many homeowners argued their homes were overvalued, resulting in higher tax bills. There was also criticism of new assessments on commercial properties, many of which saw significant reductions in their tax bills due to Tyler Technology’s income-based approach for such space.
In downtown Wilmington, 17 of the largest office buildings together shedded a total of nearly $5 million from their tax bills, according to an analysis by Spotlight Delaware. Those include buildings that are home to financial giants JPMorganChase, Barclays, and M&T Bank.
Before the reassessment, residential properties made up about 66% of the county’s tax burden. Afterward, they represented 76%.
Tyler Technology’s own report even noted that the data collected in Wilmington fell “outside of acceptable industry standards.” The company attributed those discrepancies, in part, to the lack of data from interior assessments.
Carney’s office explained that recent initiatives to fund façade improvements, including a city-led program aimed at the East Side community — one of the neighborhoods that has seen the most dramatic increases in property tax bills – could have skewed some valuations. Renovations could have caused the value of neighboring properties to also be skewed higher.
City sought to mitigate impact
This year, the city approved a few temporary solutions to mitigate the crisis, one of which included creating two separate tax rates for residential properties and commercial properties.
The rates approved by Wilmington City Council this past May set the residential tax rate at $3.74 per $1,000 of assessed value and the non-residential rate at $5.83 per thousand. Those rates are valid until the end of June next year.
Most recently, the city announced that it will extend its property tax payment deadline by a month to Oct. 31.
Carney also said Wilmington plans to consult the chosen contractor to understand how commercial properties have been assessed and how to approach the valuations that were made. The city does not plan on reappraising commercial property though.
City Councilwoman Christian Willauer, who’s pushed the city to reject Tyler Technologies’ assessments since earlier this year, said the initiative is a “huge step in the right direction towards tax fairness.” She also noted that it is important for the city to be cautious about how it corrects those missteps.
“I do think it’s really important for the city to be sensitive to how it goes about correcting any errors in the assessed values,” she said.
Willauer suggests that the city can create categories within different neighborhoods for homes that have been renovated and those that haven’t by assessing building permits and finding computations for those categories of properties, which could be a good first step before entering anyone’s home.
During his announcement, Carney highlighted the importance of conducting the interior inspections and stressed that the appraisals would not result in any code violations being reported to the city.
“We need that data to get better values in neighborhoods that are now, we think, assessed too high,” he said.
Officials from Carney’s office also noted that individuals who have applied for an appeal to the county will not be impacted by the new proposal and will continue to move through the process.
“Our approach would simply add more data to the equation,” Caroline Klinger, Carney’s spokeswoman, told Spotlight Delaware. “This initiative is rooted in fairness, and our only goal is to use these interior evaluations to ensure that assessed values are accurate and reasonable.
Residents unsure of plan
For the city’s reassessment plan to work, the biggest hurdle may be the first one: convincing residents to allow assessors into their homes.
Jaehn Dennis, president of the Vandever Avenue Civic Association in the city’s northeast, said he expected many residents in his community to be wary of letting city employees into their homes.
“I worked for the Census and barely anyone would let me in, so this is going to be interesting,” he told Spotlight Delaware.
Dennis said he expected landlords to be more willing to let assessors into their properties than private homeowners, but he also noted that most in his neighborhood are unhappy with the recent reassessment.
Marie Reed, a former president of the Southbridge Civic Association, agreed that landlords would likely be more willing to get their assessments lowered. That would play a significant part in her community where most are renters, she said.
“The community needs to be educated on it so they have a better understanding,” she said.
The city will amplify messaging regarding the plan through its digital channels and “trusted partners” like civic associations and city council, said Klinger, the mayor’s spokeswoman. Door-to-door outreach by the third-party organization could also be one element of public awareness efforts, if necessary.
“We understand that this will be a heavy lift,” she said, “which is why it’s critical to reassure residents that any potential code violations will not be reported to the city.”