People ex rel. Town of Hempstead v. State Board of Tax Com'rs

Nassau county comprises the three towns of Hemp-stead, North Hempstead, and Oyster Bay, there being one supervisor from each town, and relator’s claim herein is that no proper equalization of assessments was made in this county in the year 1911, with the result that its property has been taxed at a much higher percentage of its actual value than was the property in the other two towns, thus prejudicing it to the amount of about $175,000. This claim has been rejected bath by a majority of the board of supervisors of the county and by the state board of tax commissioners. The entire proceedings are now presented in review for our determination, which requires a careful examination of the voluminous -record submitted.

[1] It appears that before any equalization was made by the supervisors the attorney for the appellant town sought to present to them experts as to land values in the county, but the supervisors would not allow this, and finally by a majority vote equalized the real estate values of the several towns at the assessed valuations; the supervisor for the town of Hempstead being outvoted two to one. The supervisors were thus notified in due season of the claim of this appellant, but so far as the record discloses do not appear to have made any serious attempt to ascertain whether or not this claim was justified. The only investigation shown to have been made by them was of the most superficial and perfunctory kind. That the situation fairly required something more than a mere formal approval of the assessors’ valuations as a basis for equalizations is shown by a brief summary of the town equalizations by this very board of supervisors for the preceding three years. In the year 1908 the real estate assessments were, in round numbers, $18,000,000, $9,000,000, and $11,000,000 for the towns of Hempstead, North Hempstead, and Oyster Bay, respectively. For 1909 the assessments were $21,000,000, $10,000,000, and $12,000,000. During these two years the equalizations were made by the board of supervisors at these same figures without any changes whatever. About this time it appears that the Attorney General complained to the district attorney of Nassau county regarding the matter of assessments, who thereupon presented the matter to the grand jury, which in June, 1910, made an investigation and presentment criticising the then assessments in the county as inequitable. Apparently 'as the result of this agitation the assessments in 1910 for the town of Hempstead .were raised almost threefold, but no corresponding, increase was made in the assessed valuations of the other two towns. In that year the figures stand at $58,000,000. $11,000,000, and $13,000,000. But the board of supervisors recognized that these values did not represent the true relative real estate

Upon the appeal taken to the state board of tax commissioners the appellant offered numerous experts as to land values, and thus put in evidence the actual as compared with the assessed values of over a thousand different parcels of real estate lying in various parts of Nassau county. The various localities were, at least for the most part, agreed upon with counsel for respondents, and seem to have been fairly representative. All the properties along certain roads or streets or in certain improved sections were then valued, thus obviating any objections that the properties testified about were specially selected on account of abnormally high or low assessments. Appellant claims that the evidence thus obtained at the hearings before the state board of tax commissioners shows that the ratios of assessed to actual real estate values for 1911 were 47.15 per cent., 15.15 per cent., and 13.62 per cent., respectively, for the towns of Hempstead, North Hempstead, and Oyster Bay; in other words, that the appellant town was assessed for purposes of taxation over 300 per cent, higher than either of respondent towns. He further claims that equalization

[2] Whether the total real estate values of the town of Hemp-stead were thus in 1911 40 per cent., 46 per cent., 53 per cent., or 69 per cent, of the total real estate values of the three towns is a matter difficult to exactly ascertain, and one upon which competent experts might well differ. This is due in large measure to the fact that considerable areas in each of these three towns then were and still are in a state of transition from rural to suburban conditions. Nassau county crosses Long Island from north to south and is bounded along its entire western border by New York City. Many persons of wealth have bought up large tracts of land in this county at high figures for estates and residential purposes, while many more tracts have been acquired for development purposes to be cut up into building lots. There thus exist side by side in many places in the county improved properties worth, including buildings, thousands of dollars per acre, and other properties used only for farm purposes, and as such worth but a few dollars per acre. The question then arises as to whether such latter parcels should be assessed at mere farm values, or whether allowance should be made for the fact that in many cases such property is being held by the owners at much higher figures, and is in fact immediately salable for development or estate purposes. Moreover, on account of the comparative nearness of New York City, even in the case of the property not immediately salable for such purposes, probably few owners would be willing now to sell for ordinary farm values. Under such conditions as outlined it would seem that the test of strictly farm values is too narrow a measure of the actual worth of many properties, even if for the present they are only used for farm purposes. Of course, possible and remote and purely speculative values cannot be considered in ascertaining actual values of real estate, but we think that under these special conditions, when a former purely agricultural community is fairly in a state of transition to suburban conditions, some consideration at least may be taken of the present availability for other than farm uses in arriving at true- land values. The methods used by appellant’s witnesses thus do not seem open to criticism upon the whole, although of course their final opinions of value based upon such methods of ascertainment may be a matter of controversy in any particular instance.

The town of Oyster Bay did not introduce any evidence whatever of land values in that town, and the town of North Hempstead put in evidence only a comparatively few parcels of land in such town. The chief witness for the respondent the town of North Hempstead was one Jacobus, a real estate man of considerable experience, although most of his dealings had been at some distance from the properties he valued. His valuations were in most cases far less than

The state board in arriving at its decision refers to certain personal observations of parcels appraised made by the chairman and Commissioner Sullivan and also to certain tax proceedings heretofore had in Nassau county, which, however, do not appear in the record and were not put in evidence, nor referred to, in the course of the hearings. They also refer specifically to a certain referee’s report, which seems never to have been in existence. Making due allowance for all such considerations, so far as is possible with matters unknown to us, and so not capable of accurate estimation, we nevertheless are unable to conclude, after an examination of the record, that the decision of the state board is supported by the evidence, or that the percentages of assessed to actual values in these towns were equal for the year in question. We think, on the contrary, that an average higher percentage in Hempstead than in the other two towns was fairly shown. Just what was the ratio between the different percentages mentioned is a matter of great doubt, but it probably was not as much as three to one, as claimed by the appellant. But this same board of supervisors in their equalization of 1910 in effect held that the ratio was approximately two to one, and they have recently held the same with regard to this 1911 assessment in the matter of the equalizations in three school districts. We accordingly conclude that a ratio of two to one may be considered a fair approximation; in other words, that upon the record the 1911 assessments of the town of Hempstead should be equalized at this ratio as regards both North Hempstead and Oyster Bay. The state board of tax commissioners has apparently already held that real property in the town of Hempstead was assessed in 1911 at from 45 to 50 per cent, of its value. So in this proceeding we think the percentages of assessed to actual values for purposes of equalization may fairly be held to be

The determination of the state board of tax commissioners should therefore be modified in accordance with the foregoing, together with costs to the relator. This court finds as a fact that the percentages which the assessed value of the real property in each town in 1911 bore to its full value are 50 per cent, for the town of Hempstead and 25 per cent, for each of the other two towns in said county.

Determination of the state board of tax commissioners modified in accordance with opinion, with $50 costs and disbursements to the relator. All concur.