Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 26, 2018

FILE NO.: WR 150592

Assessed Person(s): Richard Allan Askew

Appellant(s): Richard Askew, Carolyne Askew

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s): City of London

Property Location(s): 219 Hale Street

Municipality(ies): City of London

Roll Number(s): 3936-040-411-03400-0000

Appeal Number(s): 3233275

Taxation Year(s): 2017

Hearing Event No. 690766

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: January 10, 2018 in London, Ontario

APPEARANCES:

Parties	Representative
Richard Askew, Carolyne Askew	Self-represented
MPAC	Jeff Langford
City of London	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1Richard Askew and Carolyne Askew have resided at 219 Hale Street since they purchased the property in 1998. Four or five years ago, the City of London approved the construction and installation of a roundabout at the intersection of Hale Street and Trafalgar Street, a few blocks north of the Askew’s residence. The installation of this roundabout has increased traffic on Hale Street along the frontage of the Askew’s property.

2The Askews believe that the returned value of the subject property of $239,000 is too high, given the impacts of additional traffic and nuisance related to the installation of the roundabout. They believe the property should have a current value no higher than $205,000.

3For the 2017 taxation year, MPAC returned a value of $239,000, which includes a 4% reduction to reflect the conditions present along Hale Street as a result of increased traffic. MPAC considers these conditions to reflect a ‘Medium’ value adjustment for traffic.

4The Assessment Review Board (the “Board”) must decide two things in this appeal. Firstly, the Board must determine, based on the evidence at the hearing, the current value of the subject property. Having reference to the assessments of similar properties in the vicinity, the Board must then determine if the current value should be reduced to be fair and equitable.

DECISION

5The Board finds that the current value of the subject property is $209,000. The Board also finds that there is no evidence to support a reduction in the current value as determined for the assessment to be equitable with the assessments of similar properties in the vicinity.

6Accordingly, the Board finds that the assessment of the subject property, at 219 Hale Street for the 2016 taxation year is reduced from $239,000 to $209,000 in the Residential property class.

LEGISLATION

7In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“Act”).

8Section 1 of the Act states:

“current value” means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.

9Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

10Section 40.(1) of the Act states:

40.(1) Appeal to Assessment Review Board. Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) he person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) he classification of the person’s land or another person’s land is incorrect, or

(v) or land, portions of which are in different classes of real property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

11Section 44.(3) of the Act states:

44.(3) Same, 2009 and subsequent years. – For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(a) determine the current value of the land; and

(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.

What is the Current Value of the subject property?

MPAC’S Evidence

12Jeff Langford represented MPAC in this appeal. Mr. Langford testified that he applied the direct comparison approach to value to determine the current value of the subject property. He indicated that this is the accepted approach to determining the value of a single family dwelling where there is no sale of the subject property on or near the valuation day, which for this appeal is January 1, 2016.

13Mr. Langford explained that the direct comparison approach uses the sales of other properties in the area, with appropriate adjustments so that an approximation of the value of the subject property can be made from them. In this case, Mr. Langford used six properties that sold between October 26, 2015 and December 9, 2016; all within 12 months of the statutory valuation day.

14To account for the impact of time on sale values of the six comparable properties, Mr. Langford applied a Time Adjustment Factor (TAF) to each. The TAFs in Mr. Langford’s valuation report were derived from 31 sales in the area of the subject property that occurred between January 2015 and August 2017. By applying these TAFs to the original sale values of the comparable properties, Mr. Langford was able to compare the sales to the subject property as though they all sold on the January 1, 2016 valuation day. A summary of the characteristics of the six comparable sales and the subject property are included in Table A.

Table A

	Subject Property 219 Hale Street	Sale 1 190 Fairhaven Circle	Sale 2 149 McGee Place	Sale 3 186 Fairhaven Circle	Sale 4 235 Hale Street	Sale 5 246 Hale Street	Sale 6 244 Hale Street
Lot Area (Acres)	0.35	0.17	0.30	0.17	0.33	0.13	0.13
Living Area (sq. ft.)	1,094	1,064	989	1,059	915	1,078	1,190
Sale Price ($)/Date	N/A	$240,900 Nov. 2016	$237,000 Dec. 2016	$219,900 April 2016	$267,000 May 2016	$175,000 Jan. 2016	$222,000 Oct. 2015
TAS Price ($)	N/A	$218,296	$211,641*	$213,103	$255,337	$173,890	$227,328*
TAS/Sq. ft.($)	N/A	$205.17	$213.99	$201.23	$279.06	$161.31	$191.03
2016 CVA ($)	239,000	211,000	231,000	220,000	204,000	187,000	232,000
2016 CVA / sq. ft.	218.46	198.31	233.57	207.74	222.95	173.47	194.96
Effective Year Built	1965	1969	1968	1977	1960	1970	1986

*indicates result from interpolated TAFs in MPAC’s Evidence

15Mr. Langford explained that the ‘effective year built’ is a construct used by MPAC to reflect any renovations or updates that may have occurred over the lifetime of the subject dwelling. When these adjustments are made to the subject dwelling, which was built in 1947, the effective year built is ‘created’ as 1965. All older buildings in the area have the same adjustment made to them to reflect renovations and updates, in order that they may be meaningfully compared to one another and to the subject property.

16Mr. Langford also explained that the $239,000 value returned for the subject property has a 4 % reduction applied already and that this is also the case for the three properties on Hale Street in his comparative analysis.

17Given the range of values demonstrated by the six properties in his analysis, Mr. Langford concluded that the returned value is appropriately within this range and that $239,000 is a reasonable current value for the subject property.

Appellant’s Evidence

18The Askews submitted a series of photographs of the subject dwelling, demonstrating that the house is in good condition for its age, but that it is relatively modest in its construction and finishes. While they recognize a reduction in value is reflected for the traffic situation at their property, they do not believe the reduction is large enough. They testified :

• they have difficulty entering and exiting the property at certain times of the day;

• a steady flow of traffic goes by their house during most of the day; and

• the street has been designated as a bus route which creates an ongoing nuisance due to noise and the behaviour of bus users (littering, loitering and language).

19The Askew’s focused their remaining submissions on the equity of the assessment of the subject property when it is compared to similar properties in the vicinity.

Is the assessment determined equitable when it is compared to the assessments of similar properties in the vicinity?

Appellant’s Evidence and Submissions

20The Askews submitted that the properties in the equity analysis submitted by MPAC are not suitably similar to the subject property to use for an accurate result. They based this submission on the following:

• Five of the 30 properties in the MPAC analysis were sold more than once, so there are only 24 separate properties in the sample;

• Only two of the remaining 24 properties are on Hale Street;

• Their property is older than most of the properties in the sample;

• Only 13 of MPAC’s properties sold for more than $200,000 and all of these are newer than the subject property; and

• The average assessment of the 24 properties is $196,580 and the average sale price is $213,912.

21The Askews further submitted that they consider their house ‘average’ in the immediate neighbourhood, so the average sale price in MPAC’s analysis of $213,910 should be a good indicator of its value. Finally, they submit a reduction to that average should be applied to account for traffic conditions that are not generally reflected in the 24 properties in MPAC’s sample.

22This led the Askews to their submission that $205,000 is a reasonable assessment for their property.

MPAC’s Evidence and Submissions

23Mr. Langford selected thirty sales of properties that occurred between January 2015 and August 2017 to illustrate the level at which similar properties in the vicinity are assessed. These properties were not selected owing to their similarity (they are all in the residential property class) but owing to their proximity to the subject property. All thirty sales (24 properties) are located within 0.5 kilometres of the subject property.

24Mr. Langford testified that his equity analysis shows a level of assessment [or median Assessment to Sale Ratio – (‘ASR’)] of the thirty sales of 1.018. Mr. Langford explained that a median ASR below 1.0 indicates that generally, properties are under assessed as compared to their sale values. A median ASR above 1.0 indicates that properties are over assessed as compared to their sale values. He used TAS value for this comparison so that their sale value could be determined as though each sale occurred on January 1, 2016.

25Because the result of the analysis shows a median ASR above 1.0, Mr. Langford submitted that no adjustment for the purposes of equity is warranted. If the median ASR was applied to the subject property the result would be higher than the returned value. Only reductions, and not increases are permitted under the section of the Act dealing with equity.

THE BOARD’S ANALYSIS

Current Value

26There is agreement between the Parties, that there should be a reduction of value reflected in the assessment of the subject property to reflect the traffic condition along Hale Street. MPAC applies a 4% reduction for this consideration, and while the Appellant’s didn’t place any specific value to the reduction required, their only position was that the reduction applied by MPAC was not sufficient.

27MPAC submitted six properties in the area that sold in proximity to the valuation day and were used for comparison to the subject property to determine its current value. In order to be used for such a comparison, properties need to be sufficiently comparable for the purpose.

28Given the unique traffic situation experienced along Hale Street, the Board finds that the best indicators of value of the subject property are properties that are also on Hale Street. While MPAC attempted to make adjustments to assessments to reflect the traffic condition, the best indicator of the impact of the traffic condition is the sale values of properties that sold on or near the valuation day and that experienced the traffic challenges on Hale Street. Properties that are not on Hale Street experience entirely different traffic conditions. Using these properties for comparison does not account for this difference.

29Of the three comparable properties on Hale Street, the median TAS value per sq. ft. of building area is 245 Hale Street at $191.03. When applied to the subject property’s, living area of 1,094 sq. ft., the value is $208,987, or $209,000 rounded. Some argument was made by Mr. Langford that lot size should be considered in the determination of current value, noting that the subject property has a larger lot that all of the comparable properties. The Board finds that there is no direct correlation between lot size and current value in the sample of properties used for comparison. Differences in value can just as easily be attributed to building areas which vary greatly among the six properties and the three most comparable properties as determined by the Board.

30Accordingly, the Board finds the current value of the subject property is $209,000.

Equitable Assessment

31The Board finds that the best evidence to determine if an adjustment for equitable assessment of the subject property is the equity analysis prepared by Mr. Langford. His approach is the one most often used for residential properties. While the Askews had issues with some of the individual sales in the thirty sale sample, the purpose of the equity test is not to determine the level of similarity of each but to use the sample en masse to determine if properties in the Residential property class are fairly sharing the assessment based tax burden in the vicinity. The Board is satisfied that Mr. Langford has demonstrated that assessments of similar (residential) properties in the vicinity (within 0.5 kilometre) are assessed at slightly higher than their sale values. Sale values in this comparison are construed as ‘current value’ in this context.

32Instead of using the equity analysis en masse, the Askews used the specific values attributed to each sale to make a conclusion for the subject property. This approach is not reliable because the Board does not have the details of each property to determine if they are similar enough to directly compare their values to the assessment of the subject property. This equity analysis was clearly not prepared to be used for direct comparison.

33The Board finds there is no evidence to suggest a reduction in the current value determined for the subject property is necessary for purpose of equitable assessment.

CONCLUSION

34The Board finds that the current value of the subject property is $209,000. The Board also finds that there is no evidence to support a reduction in the current value as determined is necessary for the assessment to be equitable with the assessments of similar properties in the vicinity.

35Accordingly, the assessment of 219 Hale Street in the Residential property class is reduced, from $239,000 to $209,000.