I bought a house in Cherry Hill. It’s of those classic suburbs that blew up after WW2, and so there’s lots of tract housing, what some might call “cookie-cutter” because they’re the exact same design. That includes my house, built in 1957, and a good number of houses in my neighborhood. This should make appraisals easier; there are dozens of nearby houses with super similar square footage, layout, age, and lot size. Instead, property assessments in Cherry Hill, Camden County overall, and throughout much of New Jersey, are bad, wrong, stale, broken. This creates an unfair tax system where people effectively pay different rates, even for comparable properties.
There's a fairly simple solution, but only one county that I know of has implemented it and another is working on it.
Inequity: anecdata
I bought my house around the same time as three similar houses nearby. All, again, were built in the same year as mine with the exact same layout. One remains quite similar to mine in terms of interior and condition; call it the Eerily Similar House. Another, the Reno House, was more extensively renovated. The third’s flipper closed in the carport to add another bedroom, a half-bath, and a storage room to create the Extended House.
Now compare our assessments and taxes.
In the case of these four houses, the more it's worth, the lower the assessment and thus--since we all pay the same statutory rate--taxes. I pay almost $3,000 more in taxes than my neighbors with similar but more valuable houses. Reno and Extended are even on my block. (And no, I cannot appeal.)1
In this extremely limited example, the taxes are regressive. As we'll see later, formal analysis suggests this is true for Cherry Hill as a whole. Just consider the above a jarring anecdote to motivate formal investigation.
What we can say about property assessment in Cherry Hill is that it's inequitable, it doesn't treat taxpayers equally. Some are taxed more heavily than others. I happen to be one of them, and there are many others.
Rigged
I don’t hold this against my neighbors. I can’t blame Cherry Hill’s assessors, either, whose hands are tied by state law. They can’t reassess individual homes, even if the assessments are obviously wrong, unless certain conditions are met: most commonly, the owner gets a permit for certain renovations. (I have no idea why the neighbors’ extensive, recent renovations didn’t trigger reassessments.)
The fault lands squarely upon the people in charge of how property gets assessed in Camden County and most of New Jersey: my friendly county Board of Taxation. In fairness to the Board, they’re at least aware of the problem. They told me that they’ll order Cherry Hill to conduct a total, township-wide revaluation within the next year or so. That’s how it goes in most in NJ, when a county BoT gets tired of a municipality’s consistently bad assessments. But there are problems with this approach.
First, total revals are ordered at Board discretion. Municipal leaders could even beg the Board to delay an order as long as possible or until after a crucial election, because they believe it will raise the wrong voters’ taxes and hence harm them politically.
The most egregiously under-assessed homes tend to be older, not recently sold or gut-renovated, with older owners, who tend to vote in local elections.2 Unfortunately, all this doesn't change their home's growing market value. And because someone who's lived in place for 30+ years has probably paid off their mortgage, such homes have a lot of equity, that is, wealth. Conditions are ripe for a regressive tax system rigged by wealthy property owner interests.
But the biggest problem with total revals is that they’re huge, expensive endeavors requiring several years to complete.3 In a hot housing market, as it's been since 2020, that means any assessments created by this process are outdated as soon as the reval concludes. The solution brings us back to square one.
Wrong
Look at the above table again and notice another problem: the assessments are inaccurate, less than half or even close to a third of their market value--if you consider the most recent sale price an accurate-enough barometer. Estimates from Zillow and Redfin are much higher now. (You shouldn’t trust the appraisal ordered by the bank that underwrote your mortgage.)4
As I've written elsewhere, the kicker is that the State already knows which towns assess property poorly. Each year the Department of Community Affairs (DCA) calculates total equalized assessment, the sum total of all taxable properties’ market values. Comparing this to total assessed value (AV / EV = town-wide assessment ratio), we can see the most inaccurate municipalities.
One problem with artificially low assessment is that it creates an artificially high statutory tax rate. That's what's reported in official documents and real estate listings. High rates make potential residents think twice before moving here.
And that's what we tend to see above. Union Township's AV Is just 9% of its total market value, so its statutory tax rate is an eye-popping 23%. If their assessments were accurate, they could instead boast a 2% statutory tax rate, yet collect the exact same taxes.
In theory, assessment inaccuracy isn’t inequitable as long as it’s consistent. If everyone’s assessment ratio is, say, 50% (close to mine), then none of us are unfairly over- or under-taxed. The statutory tax rate (municipal + school district + county budgets / total AV) is higher than it would be with accurate assessments, but the effective rate (as a percentage of market value) is lower and the same for all. (We'll see later that Cherry Hill's assessments are also inconsistent.)
However, excessive inaccuracy strongly implies inequity. Over time, property values tend to appreciate--barring short-lived crashes. But not all properties appreciate at the same rate. Homes in prime locations, like downtown or near schools with high test scores, grow in value faster than those in more isolated outskirts, industrial zones, or on busy roads. A pitifully low town-wide AR means most homes haven't been reassessed in a long time, and in that time prime homes almost certainly, vastly outpaced others. So Union Township has some homeowners paying sky-high effective tax rates and subsidize their more fortunate neighbors.
Camden County
Cherry Hill has the 5th most inaccurate assessments in our county. If assessments matched market value, we could cut our statutory rate in half; but again, that's just window-dressing, bragging rights, advertising, not a real tax cut.
What's more important is that, as we'll see next, Cherry Hill's taxes are inequitable.
Inequity: official data
What we don't want is excessive deviation. If I'm assessed at 50% of market value but some poor shmuck nearby with the same market value is assessed at 75%, then their taxes are much more unfair than mine.
Below is Cherry Hill's Coefficient of Deviation (COD) since 2023. This measures how much property's assessment ratios deviate from the median. The higher the COD, the more inequitable are assessments.
As a general rule of thumb, rather than an official standard, assessors believe a COD over 15 indicates unacceptable levels of assessment inequity. Cherry Hill's COD has exceeded that for at least 4 years.
Elsewhere in Camden County can be even worse off. The City of Camden, one of the poorest in the country, also has wildly inequitable property assessment with a COD over 30.
Again, Cherry Hill will do a total reval soon, but that's not a sustainable solution. For that, we must look up.
Solved Problem
As I've published before, assessors consider it best practice to reassess every year. So-called Annual Rolling Assessments (ARA) keep the books more accurate and equitable than the current practice of letting them stagnate for years, then taking years to reassess everyone at once.
Using computer-assisted mass appraisal (CAMA), towns or the county can automatically update 100% of assessments every year based on market trends. In today's extremely online world of tech supremacy and AI anxiety, asking assessors to "use computers more" sounds quaint, yet that's where we're at.
But houses change. Owners renovate and add rooms. Towns need to physically inspect them regularly to keep records accurate. Under ARA, 20% or so of properties would get inspected every year. This way, 100% of properties are inspected every 5-year cycle.
ARA is much more cost-effective than the status quo, meaning taxpayers would actually save money. According to the Monmouth County Board of Taxation:
the average cost of a traditional revaluation, which is a third-party performing both valuation and inspection, is $128 per line item. The statewide prices for approved revaluations range from $91.24 to $225 per line item.
Alternatively, the Assessor can perform the valuation, and an outside entity can perform the internal inspections for roughly $32 per line item. [ARA] saves up to 75% of the cost of the traditional revaluation. Stated differently, for a 5,000-line-item town, which is close to Monmouth County’s average town size, that is a $480,000 savings per town.
So why doesn't every town do this? Because state law forbids it.
Listen to My Demo
In 2013 New Jersey enacted Public Law 2013, Chapter 15, creating the Assessment Demonstration Program (ADP). Just four counties were allowed to begin implementing ARA, requiring that "every assessment be reset to the current market value every year" and allowing inspections every 5 years. The rest remain bound by older state law requiring a physical inspection for each and every reassessment, and the old revaluation system. Because Camden County did not opt into ADP or subsequent programs when they had the chance, we're stuck with inequity.
Tackses
Finally, the question on everyone's mind: won't reassessment raise my property taxes? No, and I've covered why before briefly, but the Camden County Board of Taxation has a good explainer. Under-assessed properties--those with assessment ratios lower than the town-wide AR--can expect tax hikes, while over-assessed properties can expect tax cuts.
Since Cherry Hill's overall AR is 54%, and mine is 48% (or lower, since my market value keeps rising), I can actually expect a tax increase after a reval. But I'm okay with that because my neighbors with higher market values would pay their fair share, as well as me, and my less fortunate neighbors would get relief. I benefit when everyone is treated equitably. I'd especially benefit from ARA, which would lower the township's budget, modernize our infrastructure, and enforce equitable taxes everywhere.