Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 02, 2018

FILE NO.: WR 153345

Assessed Person(s): Andrew Glenn Stadtegger

Appellant(s): Andrew Glenn Stadtegger; Catherine Dunn Stadtegger

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 299 Riverside Drive

Municipality(ies): City of Toronto

Roll Number(s): 1904-011-300-02500-0000

Appeal Number(s): 3269626 and 3299476

Taxation Year(s): 2017 and 2018

Hearing Event No. 698466

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

Heard: May 16, 2018 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Andrew Stadtegger Catherine Stadtegger	Self-represented
MPAC	Erin Comeau
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

BACKGROUND

1Andrew Stadtegger and Catherine Dunn Stadtegger (the “Appellants”) are the owners of 299 Riverside Drive (the “subject property”) in the City of Toronto (“City”), which is a single family detached residence located on a ravine near the Bloor West Village area. The home was built in 1936, and is located in a neighbourhood where there are similar houses. The assessment was returned at $1,969,000. The Appellant appeals the assessment and seeks a reduction in value to $1,562,000.

2Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act“), the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016 (“current value”).

3Pursuant to s. 40(11) of the Act, the City is a party to this proceeding. However, the City did not advise the Assessment Review Board (“Board”) of its position on the issues raised in these appeals, and no one appeared at the hearing on the City’s behalf.

4Section 44(3)(b) of the Act directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute the municipal tax burden according to the value of the property possessed by each ratepayer. In this case, the Appellant did not seek an equitable reduction and MPAC did not recommend a reduction of the assessed value on the ground of equity.

5At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the correct current value for the 2017 and 2018 taxation years is $2,036,430. An equitable reduction of this value is not required.

Relevant Legislation

6The Act

1. “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.

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

Valuation days

19.2 (1) Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

2. For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

3. For the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

4. For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

40.(17) For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

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.

Issue

7The issue to be determined on this appeal is the correct current value of the subject property for the taxation years 2017 and 2018.

Discussion, Analysis and Findings

MPAC’s Evidence

8Erin Comeau, a Property Valuation Analyst and author of the Property Valuation Report and the Equity Analysis Report, represented MPAC and presented MPAC’s evidence. Mr. Comeau inspected the subject property in 2013 and describes a two and a half-storey home abutting a ravine. The home has 2,662 square feet (‘sq. ft.”), a partially finished basement, and a lot with effective frontage of 45 feet and a depth of almost 204 feet. This home is located in an area which has seen a large increase in the value of homes over the past two years. Mr. Comeau noted that the prices of real estate rose 32.7 per cent in the 23 months between January, 2015 and December, 2016. He based his conclusions on 253 sales of residential property occurring during this period.

9Mr. Comeau chose six residential properties in the neighbourhood of the subject property which sold in 2015 and 2016. The homes were all built primarily in the 1920’s and 1930’s with the exception of one built in 1946. They were all either on Riverside Drive, Riverside Crescent, or Brule Gardens. The homes had all been renovated sometime between 1990 and 2013. All were ranked construction quality 7 (like the subject property) or 7.5. All had partially finished basement areas ranging in size from 421 sq. ft. to 1,071 sq. ft. (18 Brule Gardens). The selling prices ranged from $1,505,250 (time-adjusted to $1,592.842) for 301 Riverside Drive to $2,812,500 (time-adjusted to $2,938,167 for 279 Riverside Drive.

10Mr. Comeau pointed out that many of the comparable properties, like the subject property, abutted a ravine which was a positive feature that added to value. Mr. Comeau had selected a variety of comparable homes so that he could illustrate homes which were valued at more than the subject and homes which were inferior or less valuable.

MPAC’s Submissions

11MPAC had determined that the value of the subject property was $1,969,000. However, Mr. Comeau was aware of the fact that one of the comparable properties, 301 Riverside Drive, next door to the subject property, was very similar to the subject property and that the Appellant would be submitting that the value of his home should be the same as the value of his next door neighbour’s home. The neighbour’s home had sold for $1,505,250 on August 14, 2015, only four months before the valuation day of January 1, 2016. Mr. Comeau submitted that:

(a) a single sale cannot represent the market value of the subject property;

(b) the value of property is extrapolated from looking at sales of comparable properties; and

(c) if the comparable properties are arm’s length sales between willing buyers and willing sellers, you can establish a range of values that will reflect the true state of the market, something one sale by itself cannot do. MPAC submitted the decision of Members J. Griffith and C. Sloan of this Board in Kumar v. Municipal Property Assessment Corp. Region No. 14, [2011] O.A.R.B.D. No 140 (“Kumar”). MPAC used this decision to stand for the principle that a single decision is not a reliable indicator of the market. In Kumar, the Board found that all six comparable sales used by MPAC provided “a more meaningful test of market value”.

12Relying on its evidence, MPAC submits that the correct current value for the taxation years 2017 and 2018 is $1,969,000.

Appellant’s Evidence

13Andrew Stadtegger represented the Appellants. He gave verbal evidence as well as a statutory declaration by Robert Patton, the former owner of the home next door to the subject property at 301 Riverside Drive. In the affidavit, Mr. Patton swore that he had been the former owner of 301 Riverside Drive and that he sold it in August, 2015, for $1,505,250 in the course of receiving multiple offers. He chose the best offer and had no relationship with the purchaser of his home.

14Mr. Stadtegger testified that his home borders a four-plex. He stated that Riverside Drive serves as a means to get from the Gardiner Expressway to Bloor Street, something that is not true for Brule Crescent or Riverside Crescent which are cul de sacs. His own street is a thoroughfare and is much busier as a result.

15Mr. Stadtegger also noted that some of the properties being compared to his are ranked a quality 7.5, which in his opinion is simply not comparable to a quality 7.

16Other points raised by the Appellant were:

(a) The ravine is environmentally protected and he has no right to cut down trees or utilize the property for any purpose;

(b) Some of the properties in the neighbourhood are worth twice the amount that his property is;

(c) There is a diversity in house styles in the neighbourhood, leading to a large range of values. Mr. Stadtegger argues that the wide variety in housing in the neighbourhood makes the sale of a very comparable property such as his neighbour’s very useful for establishing value.

Appellants’ Submissions

17Relying on his evidence, the Appellant submits that the correct current value for taxation years 2017 and 2018 taxation years is $1,505,250, which is the same price his neighbour’s very similar house sold for in 2015. The Appellant further submits that the comparable homes proposed by MPAC are generally located in quieter neighbourhoods than his; he has more traffic due to his proximity to the GO station and also due to his having a four-plex next door.

Findings

18The residential dwelling that is the subject of this appeal is a unique building because of its location in a neighbourhood containing a diverse variety of homes. Due to rapid inflation, this neighbourhood, like others in Toronto, has experienced a rapid increase in values over the past two years. The issue that the Board must grapple with in this appeal is whether or not the sale of a very similar home should be the dominant influence in our determination of value in the face of sales of non-similar homes in the neighbourhood. MPAC argues that basing the value of a home in a residential neighbourhood with only one similar home is not going to give a correct range of values from which to calculate a value.

19In this case, the Appellant urges the Board to accept one sale over the others. MPAC objects, using the decision in Kumar, above, to point out the flaw in the reasoning of relying on one sale when there are others of relevance in the neighbourhood. The property sale that the Appellant seeks to rely on is his next door neighbour at 301 Riverside Drive. The difficulty with this property is that it is somewhat smaller than the subject property, and consists of two storeys, unlike the subject property of 2 and ½ storeys. While they both abut the ravine, the differences in the sizes of the homes make them comparable but not identical. As held by the Board in the Kumar decision, we cannot rely on just this sale when there are other valid proposed comparable homes in the neighbourhood.

20The Appellant makes a valid criticism of MPAC’s comparable homes when he states that the homes on Riverside Drive are on more of a thoroughfare than Brule Gardens or Riverside Crescent. These streets are cul de sacs, and, as such, provide a very different level of privacy, quietness, and security for families with small children. As such, the Riverside Drive properties are going to appeal to a different market.

In the following chart, I set out some of the features of the Riverside Drive properties which MPAC proposed as suitable comparable properties to the subject. They include 301 Riverside Drive, the property proposed by the Appellant as the most suitable comparable property.

COMPARABLE RIVERSIDE DRIVE PROPERTIES PROVIDED BY MPAC

	Subject	279 Riverside Dr.	301 Riverside Dr.	235 Riverside Dr.
Sale Price (time adjusted)		$2,938,167	$1,592,842	$2,145,413
Effective Site Area	9,173.25 sq. ft.	. 7,560 sq. ft.	8,148 sq. ft.	13,150 sq. ft.
Year Built	1936	1927	1925	1926
Storeys	2 ½	2 ½	2	2 ½
Building Area	2,662 sq. ft.	. 3,049	2,424 sq. ft.	2,804 sq. ft.
$ per square foot		$964	$657	$765

21It’s clear from the chart that there are dissimilarities in the sizes, ages and number of storeys between these four properties. While the Appellant urges the Board to accept that his home and 301 Riverside are identical homes, the subject property is clearly larger by over 200 sq. ft., and has a somewhat larger site area. In addition, 301 Riverside is 11 years older and only two storeys. Just on these differences alone, it is not likely that the current value of the subject property would be identical to the sale price of the neighbouring home. Instead, the Board accepts that homes located on the same busy street are more comparable than homes in the cul de sacs. The Board therefore uses the three Riverside Drive proposed comparable homes, which have a median value per sq. ft. of $765. Applying that value to the subject property’s building area indicates a likely sale value of $2,036,430. In this case the median value is appropriate for the reason that the value of 279 Riverside Drive, a much larger home, is significantly greater than the other two homes on the street when calculated their value per sq. ft. basis.

22The median sq. ft. value of the three Riverside homes in MPAC’s study, when applied to the subject property, gave a higher value than the value given to the property by MPAC.

DECISION

23The correct current value of the subject property is $2,036,430 for the 2017 to 2018 taxation years.

24An equitable reduction of the current value of the subject property, pursuant to s. 44.(3)(b) of the Act, is not required. As no one served notice under Rule 40 that a higher value than that returned by MPAC, the Board confirms the assessment returned by MPAC in the amount of $1,969,000.