AUBURN — Year-over-year increases in home sales prices have forced city staff to make property valuation adjustments, with notices sent to homeowners last week.

According to City Manager Phil Crowell, the effort is not a full revaluation — like one rolled out in Portland last year — but rather adjustments based on recent sales prices that will allow Auburn to maintain its current “declared ratio” of 93%, which means that on average, the city is assessing properties at 93% of their full value as assessed by the state.

Crowell said that while the state requires municipalities to maintain a 70% or greater sales ratio, assessors have the discretion to declare a ratio within 10% of the state valuation ratio.

Brian Wood, assistant city manager, said the state uses a two- to three-year average of sales data that typically lags two years behind to ensure accurate data.

The notice sent to property owners states that “the difficult decision to increase values is based on several years of high sale prices and the city’s efforts to remain in compliance with state mandates.”

According to the notice, the changes will go into effect for the 2022 tax year, effective April 1, but city staff has urged residents to hold off on questions until after receiving this year’s tax bill. Taxpayers normally receive the first bill in August, and officials plan to hold an informational session in early September to explain the situation and answer questions.

An appeals process exists for residents who dispute the updated valuation.

Mayor Jason Levesque said the adjustments also impact the state homestead exemption program.

In response to concerns about the adjustments on social media, Levesque said, “With a dramatic rise in residential values the state informed us that we were below the threshold assessed to actual ratio and hence individual homestead exemptions would be deducted accordingly.”

The adjustment “will get us back into compliance,” and hopefully help residents take advantage of the full benefit of the homestead exemption, he said.

Since the city has already locked in its budget for next year, any increase in valuation will lower the property tax rate. Last year’s rate was $23.82 per $1,000 of assessed valuation.

The last full revaluation in Auburn was implemented in 2006-2007.

Levesque said some neighborhoods have been adjusted periodically since then and most likely will not see a noticeable change. Others may see a shift based on rising home prices.

According to data from the Maine Association of Realtors, the average home sales price in Androscoggin County for March through May was $283,665. During the same three-month window in 2021, it was $235,000.

The median sales price in Androscoggin County for all of 2020 was $205,000.

Levesque said other municipalities have been grappling with the same questions related to home prices. He said looking at Portland, where neighborhoods like the East End saw some tax bills double last year due to its revaluation, officials didn’t want Auburn to get to the same point of such a “monumental tax shift.”

He said it’s also a reason he’s been pushing for housing growth. More supply keeps prices at a “reasonable growth rate,” he said.

Levesque also argued that bringing the property tax rate down will be beneficial to Auburn because it is often used by people — rightly or not — in deciding whether to relocate to a municipality.

Across the Androscoggin River, officials in Lewiston are preparing to conduct a revaluation in 2023. Lewiston has not conducted a full revaluation since 1988, and as of March of this year, the city valued homes at about 74% of their full market value.

The 18-month process will update the values of some 11,700 parcels in Lewiston, likely increasing the value of residential properties that are now assessed much lower than the actual market value.

Once the new values are implemented, Lewiston’s property tax rate is expected to decrease significantly, but for some homeowners a large swing in valuation could increase annual property taxes.

Some officials have argued for years that the city’s low assessments have led to an inflated property tax rate, which could be a deterrent for residents or businesses looking to relocate.

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