The Corsair: FY23 tax bill with phase-in: $1.1M. Full FY23 tax bill at lower mill rate without phase-in: $1.6M.
Thomas Breen photo
360 State. Phased-in FY23 tax bill: $2.2M. Full FY23 tax bill at lower mill rate: $2.4M.
Mandy-controlled four-family home at 310 W. Division. Phased-in FY23 tax bill: $6.3K. Full FY23 tax bill at lower mill rate: $7.8K.
(News analysis) A tax-assessment phase-in aimed at helping struggling homeowners would end up reaping some of the biggest bucks for two other groups in town: luxury housing developers and poverty megalandlords.
That is the conclusion of the Independent’s analysis of a five-year property-assessment phase-in Mayor Justin Elicker proposed this week as part of his $633 million general fund budget for Fiscal Year 2022 – 2023 (FY23).
He proposed gradually phasing in new taxable assessments based on the city’s recently completely once-every-five-years citywide property revaluation, rather than have new values take full effect right away.
That reevaluation saw taxable real estate assessed values rise by a total of 36.5 percent, and skyrocket even higher in poorer neighborhoods. Elicker said he proposed the phase-in to cushion the blow for lower-income homeowners. (The taxable grand list — which includes real estate, personal property, and motor vehicles — grew by 32.6 percent in total under the reval.)
But a deep dive into city property data shows that, if the phase-in plan is approved by the Board of Alders, the biggest gains for the fiscal year that starts July 1 would go to some of the wealthiest, absentee owners of residential properties in town, who already were benefitting from tax bills that reflected values far below the prices they actually paid amid a local building and speculation boom.
So other taxpayers in town would end up making up the difference in what the wealthiest property owners would pay with a phase-in and slightly lower mill rate.
Luxury apartment developers would pay hundreds of thousands of dollars less to the city next year than they would otherwise owe if reval was adopted in full and if the mill rate was dropped to such an extent that the city collected the same amount of real estate tax revenue as is currently called for by the mayor’s proposed budget. (What developers of some of the newest luxury project would owe under a phase-in is further complicated by the city’s separate tax assessment deferral program. See more on that below.)
A second likely consequence of the mayor’s plan would be a de facto tax break for poverty megalandlords like Mandy Management. That’s because the neighborhoods that Mandy’s international-investor-backed affiliates have expanded into most rapidly over the past decade — such as Fair Haven, the Hill, and Newhallville — are exactly the same neighborhoods that saw property values increase well above the total real estate revaluation growth rate.
Some of the biggest losers of the plan, meanwhile, would include not just homeowners who saw their property assessment rise less quickly than the city as a whole. It would also include some of the most expensive hotel and office properties downtown, which grew in real estate value — but at a much lower rate than many luxury and low-income residential properties did.
The analysis points to the challenges city government faces as it navigates the nationwide trend of rapidly rising home prices during the ongoing pandemic.
The questions involved include: Who gets to reap the benefits of a hot real estate market? Who gets stuck footing the bill? And how can City Hall best balance those scales to ensure that property owners are indeed paying their fair share of local taxes?
As clearly stated by the mayor during Tuesday’s City Hall press conference, the intention of the reval phase-in plan is to help vulnerable property owners who may otherwise be squeezed by sudden, steep tax bills resulting from reval.
The analysis below raises questions about what might be some unintended consequences of this approach. Another question: Might this plan actually hurt the very homeowners and renters it’s trying to help by shifting so much of the local tax burden off of the shoulders of luxury developers and poverty megalandlords, and thereby onto the shoulders of everyone else?
Big Players' Big Savings
Some of the luxury and (below) Mandy-controlled rental properties that would get a de facto tax break under the proposed reval phase-in. The "phase-in" column calculates how much each property would owe in taxes under the mayor's FY23 budget. The 33.59 mill rate column calculates taxes owed without the phase in and with a much lower mill rate.
Reader beware: There’s a bit of math below. Including an attempt to calculate a hypothetical lower mill rate that would yield the same amount of real estate tax revenue as called for in the mayor’s FY23 budget, but without the reval phase-in. (A section at the end of this article details the methodology used in this analysis.)
Here’s the upshot.
The mayor’s budget proposal would bump the mill rate down from 43.88 to 42.75, or by 2.58 percent.
It would also phase in the city’s new revaluation property values in equal increments over the next five years. That would mean that the impact of the full 32.6 percent spike to the taxable grand list — including a 36.5 percent increase to the real estate portion of that list — would be spread out over time.
This number-crunching analysis does not assume that the city would collect any more in local real estate taxes than the mayor’s FY23 budget already proposes to collect, which is $246.3 million.
See the two tables above for how certain luxury apartment complexes and Mandy-controlled rental properties that increased in value by greater percentages than the city as a whole would fare under the mayor’s phase-in/mill-rate-shave plan.
Mayor's Budget Proposal
City of New Haven data
Property tax revenue data for the mayor's proposed FY23 budget.
A quick recap on what the mayor has proposed:
On Tuesday, Elicker unveiled his proposed $633 million general fund budget for the fiscal year that starts July 1. The document, which can be read in full here, now heads to the Board of Alders for three months of hearings and public review before a final vote in late May.
The largest source of revenue for the general fund budget — or over 46 percent — would crome from local property taxes. And the largest chunk of local property tax revenue would from real estate taxes. (The city taxes three different types of local property: real estate, personal property, and motor vehicles.)
In all, the mayor’s proposed FY23 budget looks to collect $246,378,699 in local real estate tax revenue from the city’s roughly 24,990 taxable parcels of real estate.
Thomas Breen photo
City Assessor Alex Pullen at Tuesday's budget presser.
How it seeks to get to that number is a bit different, and a bit more complicated, than in previous years.
That’s because New Haven just wrapped up its latest full revaluation, which the state mandates that every municipality undertake at least once every five years to try to bring local properties’ official, taxable values in line with their actual market worth.
One of the main goals of a full revaluation is, as City Assessor Alex Pullen told the Independent in an interview last December, “to bring the properties as close to their market value as possible, so that we can make sure that the tax burden is distributed equitably throughout the city.”
Translation: If someone owns a property that is worth much more or much less than the city is taxing it as worth, that’s not fair to the property owner, and it’s also not fair to everyone else who has to pay disproportionately more or less in property taxes to make up the balance.
The results of the city’s 2021 revaluation, meanwhile, are pretty eye-popping.
New Haven’s net taxable grand list — that is, the sum total of all taxable property in the city — grew by over 32 percent, from $6.7 billion to $8.89 billion.
By far the largest portion of the net taxable grand list consists of real estate, which overall grew by 36.54 percent in assessed value — from $5.5 billion to $7.6 billion.
Click here and here for previous articles about the 2021 reval.
In his FY23 budget, meanwhile, the mayor has proposed phasing in the full new revaluation in equal increments over the next five years.
That means that a property that went up by 50 percent after reval would be taxed next fiscal year as if it went up by only 10 percent. The year after that, it would be taxed as if it went up by 20 percent, and so on up to the full 50 percent.
Elicker has also proposed slightly dropping the mill rate for FY23 by 2.58 percent, from 43.88 to 42.75. He has said the city would revisit the mill rate during the budget-making season each year over the course of the five-year reval phase-in.
"Most Effective Strategy To Be Fair"
Mayor Elicker at City Hall Tuesday.
So. Why the five-year phase-in and the moderate mill rate shave?
The mayor has framed this plan as a way to help mitigate the impact of sudden significantly higher tax bills for property owners who have seen their home values shoot through the roof.
He has said that property owners in such neighborhoods as Fair Haven, Newhallville, the Hill, and Chapel West are particularly exposed to much-higher tax bills because their properties increased by 60, 70, 80 percent — well above the citywide real-estate-increase rate of 36.5 percent.
Property owners in East Rock, City Point, and Quinnipiac Meadows, meanwhile, mostly saw property values rise in the 20 – 30 percent range –which is much closer to, or even under, the percentage by which the real estate portion of the taxable grand list grew overall.
Therefore, Elicker has pitched a five-year reval phase-in and a small drop to next year’s mill rate to avoid sending out much higher tax bills to property owners that saw their property values rise the most quickly.
“These two changes mean that, [in the next] fiscal year, most people will only see a very small increase in their taxes,” Elicker said in a budget explainer video released on Tuesday. “I believe this is the most effective strategy to be fair and to balance our ability to keep taxes at a reasonable level and provide the services residents deserve.”
The mayor repeated that sentiment during a Tuesday afternoon press conference at City Hall.
“If we fully implement the revaluation, what we would see is that certain areas of the city would have to dramatically increase their tax payments, and other areas of the city would have to only moderately increase their tax payments,” Elicker said. “I felt that was not fair. And so what I am proposing as a part of this budget is two things to be more equitable and fair to property owners across the city.”
“This is a balancing act,” he continued, “to make sure that we are not having a significantly negative impact on people’s ability to adjust to new taxes while at the same time funding our city services. If we had just done a full revaluation, you would have seen certain parts of the city” potentially have their taxes go down, while other parts could see tax bills go up by 60 or 70 percent.
He offered that same explanation in the FY23 budget book narrative, in which he detailed how the phase-in would work.
“To shield residents from these significant increases in value on their properties I’m proposing two action items,” he wrote. “The first is a ‘phase in’ of the new property valuation. A phase in allows your new property values to step-up or ‘phase in’ over the next five years. In other words, if your property value went up by 50%, with the phase-in, each year for five years your taxes would be based only on an increase of 10% each year rather than all 50% at once. This ensures that no one area of the city is hit so abruptly by the change. The second thing the budget includes is a small reduction of the mill rate. These two important steps mean that in this fiscal year, most people will only see a small increase in their taxes. I believe this is the most effective strategy to be fair and to balance our ability to keep taxes at a reasonable level and provide the services residents deserve.”
Housing Market Shift Changes The Picture
A close look at recent trends in New Haven’s real estate market and at certain property-specific impacts of the 2021 revaluation throw into question who exactly will benefit most from this reval-phase-in/mill-rate-shave strategy.
That’s because the past decade has seen at least two major shifts in the city’s housing market.
First: an explosion of developments of market-rate and luxury apartments, mostly built atop former surface parking lots and in place of derelict commercial buildings in and around downtown.
Second: a rapid expansion of poverty megalandlords like Mandy Management, who have gobbled up wide swaths of low-income rental housing — from two- and three-family homes to 20-unit-plus apartment buildings — in neighborhoods like Fair Haven, the Hill, Newhallville, the Annex, and elsewhere further from the city center.
The Independent’s review of some of the most expensive new apartment complexes in town as well as of a random sample of Mandy’s local holdings show that these two groups stand to benefit quite a bit from the mayor’s phase-in plan.
Why? Because their properties’ values increased well above the total reval growth rate.
A phase-in would mean a longer wait until the city sees these investor-landlords paying property taxes that actually line up with how much the city thinks those properties are worth.
If that is the case, and if the city doesn’t change how much it intends to collect in local real estate tax revenue, then other property owners — those that did not see their proeprties’ values increase at as steep a rate — will be left footing more of the city’s general fund bill.
Winner #1: Luxury Developers
Thomas Breen photo
360 State St.
First up, the pricey stuff.
New Haven’s decade-long building boom of mostly market-rate apartments has seen the construction and opening of such high-end complexes as 360 State St., the Corsair, the Novella, Olive & Wooster, Audubon Square, and Winchester Lofts.
While many of the newer projects are still working their way through the city’s separate tax assessment deferral program, those that have been around for seven-plus years are now — or will soon be — taxed at their full assessed values.
And thanks to the 2021 revaluation, the assessed values for these new apartment complexes have jumped considerably. (A quick note: The city taxes real estate on its “assessed” value, which is 70 percent of its “appraised” value, or assumed market worth.)
The Corsair at 1040 State St.
Examples:
• 360 State St. — a 500-unit luxury apartment complex that opened in 2010 — increased in value by 51 percent, from a city-assessed worth of $47.7 million to $72.1 million. (And this is just the residential component of the complex. The property’s garage, commercial space, and adjacent vacant lot are all appraised by the city separately.)
• The Corsair — a 238-unit luxury apartment complex at 1040 State St. that opened in 2016 — increased in assessed value by 123 percent, from $22.3 million to $49.9 million.
• The Winchester Lofts — a 158-unit luxury apartment complex at 275 Winchester Ave. that opened in 2015 — increased in assessed value by 61 percent, from $15.4 million to $24.8 million.
• The Novella — a 136-unit luxury apartment complex at 1245 Chapel St. that opened in 2015 — increased in assessed value by 48 percent, from $20 million to $29.7 million.
• College & Crown — a 160-unit luxury apartment complex at 200 College St. that opened in 2015 — increased in assessed value by 46 percent, from $18.7 million to 27.4 million.
And that’s not to mention the similarly astronomical real estate value jumps of more recent developments, like the 299-unit Olive & Wooster complex at 87 Union St. (assessed value up from $8.4 million to $33.6 million), the addition of 132 new apartments to the residential property at 129 York St. ($14.8 million to $29.2 million), and a 271-unit section of the new Audubon Square complex at 367 Orange St. ($35.5 million to $50.1 million.)
What They Save -- & Rest Of City Makes Up
Winchester Lofts at 275 Winchester Ave.
What does all of this mean for local property taxes? And how much is the city leaving on the table, as it were, with the proposed five-year phase-in?
• Under the current 43.88 mill rate and at its pre-reval assessment, the residential portion of 360 State St. contributed $2,097,463 in local real estate taxes.
Under the proposed reval phase-in and at a 42.75 mill rate, that same property would contribute $2,251,890 next fiscal year in real estate taxes.
And if the city fully adopted revaluation without the phase-in and at a 33.59 mill rate — which is where the mill rate would need to be to collect the same level of real estate tax revenue that the mayor’s F23 budget calls for — then 360 State St. would yield $2,424,491 in real estate taxes.
That’s $172,602 more than under the first year of the reval-phase-in/mill-rate-shave plan.
• The same holds true for the Corsair. Under the current mill rate and at its pre-reval assessment, that property would owe $981,742 in local real estate taxes. (The property actually yielded less this year, because of its participation in the tax assessment deferral program.)
Under the proposed reval phase-in and with a 42.75 mill rate, the Corsair would contribute $1,192,427 in FY23 real estate taxes.
And without the phase-in and at a 33.59 mill rate, it would owe $1,678,553.
That’s a de facto $486,126 tax break for the Corsair’s owner.
• The Winchester Lofts yielded $676,826 in property taxes under the current mill rate and at its pre-reval assessment.
Under the phase-in and 42.75 mill rate, it would yield $739,857.
And without the phase-in and at a 33.59 mill rate, it would yield $834,208.
Tax break = $94,351.
• Under the current mill rate and at its pre-reval assessment, The Novella would owe $614,821 in taxes. (It too yielded less this year, because of its participation in the tax assessment deferral program.)
Under the phase-in and 42.75 mill rate, it would yield $657,380.
And without the phase-in and at a 33.59 mill rate, it would yield $700,048.
Tax break = $42,667.
• Under the current mill rate and at its pre-reval assessment, College & Crown would owe $821,776. (It also yielded less this year because of the assessment deferral program.)
Under the phase-in and 42.75 mill rate, it would yield $875,143.
And without the phase-in and at a 33.59 mill rate, it would yield $921,867.
Tax break = $46,724.
The Novella at 1245 Chapel St.
How would properties that are currently in the city’s tax assessment deferral program be affected by the mayor’s proposed reval phase-in?
For now, unclear. City Assessor Pullen did not provide details by the publication time of this article as to how the two phase-in programs would work side by side.
During Tuesday’s City Hall press conference, however, he did imply that a single property could benefit from both the assessment deferral program and the reval phase-in at the same time.
“Any property that may have an assessment deferral or a different type of exemption, that will also be impacted by the phase-in,” he said, “and will have to be recalculated against the new mill rate.”
Winner #2: Poverty Megalandlords
Mandy-controlled rentals at 1495 State St. and (below) 308 Poplar St.
Luxury developers aren’t the only ones who would come out of a reval phase-in and 42.75 mill rate with cash to spare.
Under such a plan, local megalandlords like Mandy Management would also likely save hundreds of thousands of dollars on their local real estate tax bills next year.
For this article, the Independent reviewed property records for a random selection of 145 different residential properties owned by Mandy Management affiliates.
Over 100 of those properties were newly purchased by Mandy affiliates over the past year. Another 40-plus were covered by a $15.6 million mortgage loan that a Mandy affiliate received on Feb. 23 from the California-based lender Corevest American Finance.
The properties include 573 different apartments in total, and consist primarily of two-family homes (41), three-family homes (41), and single-family homes (14) located in Fair Haven, the Hill, Newhallville, Edgewood, Beaver Hills, and West River.
Taken as a whole, this sample of 145 different Mandy-controlled properties increased in assessed value by 60 percent — from a total of $24.4 million to $39.1 million.
Under the current mill rate and their pre-reval assessments, the properties yielded $1,072,784 in local real estate taxes.
Under the phase-in and at a 42.75 mill rate, they would yield $1,170,840.
And without the phase-in and at a 33.59 mill rate, they would yield $1,314,976.
Tax break = $144,136.
Other Biggest Losers: Hotels, Offices
If luxury developers and megalandlords are two of the biggest winners of a reval phase-in, who might be some of the biggest losers?
One group of losers who pay the extra bill: homeowners who saw their property values decrease, stay the same, or increase at a lesser rate than did the developers’ and Mandy’s properties.
A seconnd group: owners of some of the largest office buildings and hotels in town — which saw their high-priced properties increase in value, but not as quickly as did many of the luxury and low-income rental housing.
The Omni hotel at 155 Temple St., for example, saw its property assessment increase by 7 percent, from $20.5 million to $21.9 million. Under the phase-in and at a 42.75 mill rate, the hotel would yield $890,600 in local real estate taxes. Without the phase-in and at a 33.59 mill rate, the hotel would yield $738,454.
The Connecticut Financial Center office building at 157 Church St. saw its property assessment increase by 4.8 percent, from $30.9 million to $32.5 million. Under the phase-in and at a 42.75 mill rate, the hotel would yield $1.3 million in local real estate taxes. Without the phase-in and at a 33.59 mill rate, the hotel would yield $1.09 million.
And the lab building at 55 Park St. increased in assessed value by 5.5 percent, from $55.5 million to $58.6 million. Under the phase-in and at a 42.75 mill rate, the hotel would yield $2.4 million in local real estate taxes. Without the phase-in and at a 33.59 mill rate, the hotel would yield $1.9 million.
Alternative Options To Mayor's Plan
What are some alternatives to the mayor’s proposed reval-phase-in/mill-rate-shave plan that would also protect local property owners’ from sudden steep tax bills, but that would not effectively cut taxes for luxury developers and Mandy Management?
The Independent ran scenarios by East Rock resident Kevin McCarthy — a close watcher of New Haven real estate, City Hall, and local land use policy, as well as a retired former state legislative aide who previously staffed the state legislature’s Planning and Development Committee.
1. Could the city set up a reval phase-in program that is only for owner-occupants whose properties increased in assessed value by more than the citywide real estate reval increase rate — that is, by more than 36.5 percent?
Most likely not, McCarthy said.
That’s because the relevant section of state law that allows municipalities to implement revaluation phase-ins states that it has to be uniform for all property classes.
That law does, however, allow reval phase-ins to take place over less than five years. So the city could speed up the proposed reval phase-in and adjust the mill rate accordingly in order to tap into higher property values sooner.
2. What about not doing a phase-in at all, and instead adopting the full revaluation for FY23 and dropping the mill rate to 33.59 to collect the same level of real estate tax revenue called for by the mayor’s proposed budget, which is $246.3 million?
That would still expose some property owners who saw their properties increase in value by more than the citywide reval increase rate to sudden steeper tax bills.
3. So could the city set up some kind of targeted relief program available just to owner-occupants in that group?
The city does currently offer something similar, a tax-relief program targeted specifically at elderly and disabled homeowners. Click here for more on that.
Setting up a tax-relief program specifically for owner-occupants whose property assessments went up by a certain percentage during reval would likely require getting express authorization from the state, McCarthy said. That’s because of Dillon’s Rule, which is the principle that local governments are allowed to exercise powers only if those powers have been explicitly granted to them by the state.
The city might also consider looking into whether or not federal American Rescue Plan Act (ARPA) aid can be directed towards such a targeted tax-relief program. That would depend on the spending rules for that pandemic-era federal aid.
4. What about scrapping the phase-in, adopting the full revaluation, and then lowering the mill rate below 42.75 but above 33.59? That would result in more real estate tax revenue for the city than the $246.3 million called for in the mayor’s proposed FY23 budget.
McCarthy said that the city might want to consider this option because of the potential political ramifications of phasing in the higher reval and subsequently collecting fewer local real estate taxes.
After many years of petitioning the state legislature for greater Payment in Lieu of Taxes (PILOT) reimbursements, McCarthy said, the city finally won last year a $49 million annual bump in municipal aid. Part of the argument that New Haveners made to get that PILOT bump was that so much of the city’s most valuable property is tax-exempt, and so much of its taxable property is assessed at relatively low values.
Certain state legislators could look askance at the city’s forgoing of local real estate tax revenue, even though New Haven taxable properties are officially worth much more now than they were last year thanks to the reval. That might affect PILOT aid going forward.
McCarthy also warned that the steeper the increase in property assessments — and taxes — on apartment buildings, likely the steeper the increase in rents passed along by landlords to tenants. That may take place even if the city phases in the reval, he said, as landlords have likely already budgeted for higher property valuations, regardless of whether or not the full new values take effect next fiscal year or in five years.
5. What about scrapping the property tax system altogether and finding a new, fairer way to raise money to fund local government?
“The property tax is a particularly bad way of paying for local government,” McCarthy said, given that a resident’s income is not often tied to the value of their property, if they own property at all. But, he said, “we’re not going to change that anytime soon.”
The Big Blue Whale In The Room
What about trying to shake more money from Yale?
After all, the university saw its tax-exempt properties skyrocket in value by nearly $700 million thanks to the 2021 revaluation, bringing those properties’ total city-assessed worth to around $4.2 billion.
Yes, Yale is poised to contribute $10 million more each year in voluntary payments to the city’s general fund budget, thanks to a multi-year deal that the Elicker Administration brokered with the university last year. But those negotiations took place before the final reval numbers came out. Would the mayor consider renegotiating that deal in light of the new, much-higher valuations of Yale’s tax-exempt local properties?
No, the mayor replied when asked that question during Tuesday’s presser.
“When you look at what Yale has financially given to the city annually over the last 20-plus years and consider what the change has been, that progress is remarkable,” he said. “There’s always more work to do with the university to explore additional ways that they can help the city.”
“I’m not going to stand here and demand that Yale give even more right now,” he continued. “I think that we’ve made a lot of progress, and the Board of Alders is reviewing the proposal that we’ve submitted.”
Click here and here for previous articles about the proposed new city-Yale accord, which is currently before the Board of Alders for review and potential final approval.
Math Methodology
Briefly, on the math used in the various scenarios above.
The mayor’s proposed budget assumes that the city will collect $246,378,699 in real estate tax revenue next fiscal year. That’s based off of a phased-in real estate taxable grand list of $6,005,858,613 and a mill rate of 42.75.
Taking into account tax appeals, elderly homeowner tax relief applications, and the City Charter’s “1 percent rule” — which requires that the city assume that its tax collection rate will be 1 percent less than it was the year prior — the mayor’s budget has set the mill rate (42.75) at around 4.2 percent higher than the level needed to collect $246.3 million in real estate tax revenue.
So, this reporter tried to calculate the lowest mill rate necessary to collect $246.3 million in real estate tax revenue from a full, non-phased-in reval real estate taxable grand list of $7,641,794,255.
The Independent did so by dividing $246.3 million (local real estate tax revenue allocated) by $7.6 billion (non-phased-in taxable real estate grand list), and then multiplying that number by 104.2 percent (to account for appeals, undercollections, etc…).
That yields an alternative mill rate of 33.59.
One other note: This report and these calculations focus exclusively on the real estate portion of the taxable grand list. They do not take into account personal property, which is taxed at the same mill rate as real estate, or motor vehicles, which are taxed at a separate mill rate than that used for real and personal property.
Tom, thanks for the thoughtful analysis.
One option we did not discuss is that the city could phase in part, rather than all, of the assessment increase. For example, the city could limit the phase-in to that part of the assessment increase that exceeded 75% (about double the growth in the grand list). Some of the recent developments and properties owned by mega-landlords would still benefit under this option, but not as much.
The reval phase-in would also apply to the developments that are currently under construction. Under CGS § 12-62c(c), their assessment must be determined in the same way as all other comparable property in an assessment year. I may be mistaken, but I believe the new developments would benefit twice. Their taxes would be phased in, as is the case with new developments generally. But the assessments upon which the taxes are based would also be phase in (I will gladly defer to anyone who went to law school and passed their Tax course.)
There is no good solution here. If reval is not phased in, many low- and moderate income tenants will see substantial increases in their rents. If reval is phased in, major property owners will be among the primary beneficiaries.