As people who live in South Portland, Maine, are finding out, there’s a chance you might end up with a bill when you see moving trucks in someone else’s driveway.
As the city completes a revaluation or reassessment of the value of properties after a year-long delay caused by the pandemic, South Portland officials are sending out letters to residents warning them that the property tax bills on their homes could go up 10, 20, 30% or more.
“This is going to hit folks hard,” said Scott Morelli, South Portland’s city manager, explaining that the even though some families will see a bigger bill, costing them hundreds of dollars or more, the city will not actually take in any more money because value is shifting away from commercial properties into the residential sector.
“We’re receiving the same amount of revenue, there’s a difference in who pays it,” he said.
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Tax bills reflecting the newly assessed values are expected to go out this summer.
Greater Portland was already a hot real estate market prior to the pandemic with housing costs surging as people move into an area that has more demand for housing than supply.
In 2020, the COVID-19 pandemic sent home prices skyrocketing in the region, with people moving into the state from other places looking for space, good schools and a location to work remote with proximity to both city and coastal living.
As NECN and NBC10 Boston reported last fall, Maine home sales from September 2019 to September 2020 increased 22.8%, home values went up 19.6 percent and the median price of a home in Maine jumped from $229,000 to $273,000 year over year.
In South Portland, there’s an acute awareness of this reality.
The city was the only one on the east coast to make Redfin’s list of the Top 10 most competitive U.S. cities to buy a home.
“The good news is South Portland is a very desirable place to live, the negative is people are willing to pay prices way higher than they would’ve been five or 10 years ago,” said Morelli, adding, “we had 60% of our homes selling above list price.”
A number of residents expressed serious concerns about increases of hundreds or thousands of dollars on their tax bills during a city council meeting held over Zoom this past Tuesday.
“We opened this notice and choked up,” said Susan McCray, a public school teacher who lives near popular Willard Beach and bought her home a number of years ago with her wife.
“We live paycheck to paycheck and I’m balancing my pension and plans, but I don’t know if I can afford the hike you all are talking about,” she said.
By Thursday, news of the pending increase had also reached Bob and Judy Whynot, who have lived in the city for 24 years and are preparing to downsize to a home now under construction in Poland, Maine.
“This house is too big for us,” said Judy Whynot, explaining that taxes were not a primary reason for the couple’s decision and she and her husband were surprised their house sold to an out-of-state couple after four days on the market.
While they would stay in their house “if we were younger,” the couple also said they’re “glad we were already in the process” of selling their home. They think taxes have crept up too much in the city and they empathize with other residents who are concerned.
“The taxes are too high,” said Bob Whynot.
At City Hall, Morelli said he and leaders very much are aware and share the worries of people like the Whynots and McCray.
He believes the city council is “very very concerned “ about housing affordability and the revaluation and that it’s possible city leaders will pursue some type of “property tax relief or a phased approach” to implementing the increases to ease the burden on residents.
Because the revaluation is state-mandated, he also said officials are keeping an eye out for potential state action that could help.
“We have to do everything we can to make sure we’re not gentrifying our city to an extent where we no longer have a diverse mix of residents and it’s only super wealthy people because it really takes a mix of a lot of people to make a community vibrant,” he said.
