While the red-hot real estate market has rocketed home values, Ward 2 Councilman Jeremy Rix fears with the revaluation some residents will get pushed out of their home by taxes. In a recent interview he said he is looking into increasing the maximum income to be eligible for a tax freeze.

That threshold is $7,500 for an individual.

Currently, about 550 of the city’s 34,500 residential property taxpayers have their taxes frozen. Neal Dupuis, city tax assessor, said most of these homeowners are disabled and on a fixed income.

What’s prompting Rix to look at a tax freeze for lower income homeowners is the disproportionate increase in the housing market between what were considered “starter homes” and higher-priced properties. Starter homes that prior to the pandemic were selling for under $200,000 are now selling in the mid-$300,000 range. Yet houses selling in the high $300,000 range up to $500,000 haven’t increased at the same rate.

With the ongoing revaluation setting appraisals as of Dec. 31 of this year, which will serve as the basis for calculating next year’s tax rate as based on the budget, Rix anticipates lower income homeowners will share a greater tax burden.

“It doesn’t take an appraiser to just take a look at Zillow and see where the trends are,” Rix said of property values.

“So, you know, on any individual house, I certainly wouldn’t be able to tell people right now, what they’re looking at for a tax increase. But I feel like the trend from the reval (revaluation) last time around about three years ago is going to continue.”

Rix called the last revaluation “a real punch in the gut for a lot of people who really couldn’t afford it. And so if that same situation happens, again, it’s really going to devastate a lot of people around here.”

Because of the city’s tiered tax system where commercial properties are taxed at a 50 percent increase over the residential rate, Dupuis said the city already has a form of homestead exemption.

As for adjusting the tax freeze or other forms of tax relief, Dupuis said, “It’s way too premature to be looking at legislation.”

“We’re waiting for the market to show itself,” he said. Appraisals are based as of Dec. 31, and as he points out, a lot can change between now and then.

“The market changes on a dime and we get to focus at one moment in time,” he said.

This year, the city is undergoing a statistical rather than a full revaluation where every property is visited. Under a statistical revaluation, sales since the prior revaluation, which was done three years ago, play a significant role. Dupuis said about 1,200 valid sales (arm’s length transactions) would be used.

In prior statistical revaluations those homes were visited by an appraiser. Much of that has changed with the pandemic and the internet.

“There’s no secrets,” said Dupuis. He pointed out that homes for sale have been featured on the internet with multiple pictures highlighting new bathrooms and kitchens. The convenience of gathering all this information on a computer rather than sending someone into the field is saving the city about $60,000. Vision Government Solutions is performing the revaluation under a $289,000 contract.

Overall, the city has about 41,000 properties, of which 38,000 are taxable. Of the taxable total, 3,500 are commercial properties, Dupuis said.

He said values assigned as of the prior revaluation are not considered in establishing the new appraisal. It’s not a matter of applying a percentage increase to the prior valuation, but rather using comparable homes that have sold to arrive at a current appraisal.

Apart from meteoritic home sales in the last 18 months, the pandemic presents challenges in evaluating commercial properties. Retail and commercial property valuations are based on revenues, so for example, sales at Warwick Mall are used to establish valuations. The same is true for rentals with square foot rental rates being used to establish the value of office as well as apartment buildings.

Dupuis points out that most retail and commercial operations experienced a decline in revenues because of the pandemic. Thus, rather than placing the emphasis on the most current information, appraisers will be looking at revenues over the past three years.

Dupuis points out one outlier: marinas.

Marinas boomed during the pandemic, which presumably will be reflected in enhanced valuations.

Rix is focused on the lower- to middle-income homeowner. He thinks some people will no longer be able to afford living in the home they have had for years.

“Where’s the justice in that?” he asks.

“You have a lot of seniors, people on fixed income, or not even necessarily seniors, but people who you know that are barely hanging on to their house making the payments. They have to make tough choices when they realize they have to spend a few hundred extra every year or even $1,000 extra a year.”