*1 COMPANY, general HOLDING METROPOLITAN Petitioner-Appellant,† partnership,
v. OF OF the CITY REVIEW BOARD OF WISCONSIN, Respondent. MILWAUKEE, Appeals Court of July 1991. Decided Submitted on No. 90-2748. briefs February 1992. 654.) (Also reported in 482 N.W.2d granted. Petition to review † *3 submit- petitioner-appellant the cause was For the Weiss, Berzowski, Brady & Donahue the briefs of ted on Matthews, Roschke and Alan F. Patrick Andrea counsel, Marcuvitz, of Milwaukee. the respondent the cause was submitted on
For the Kathryn Langley, City Attorney, by F. briefs of Grant West, City Attorney, of Milwaukee. M. Assistant P.J., Fine, Moser, Sullivan and JJ.
Before Company Holding MOSER, Metropolitan P.J. denial from a trial court (Metro), appeals partnership, a Milwaukee City affirming review certiorari of a (Board) city tax affirmance of Review's Board city real property for of Metro's valuation assessor's January effective purposes, assessment tax method as to the correct parties disagree 1988. The Addition, federally a Layton Garden for the Metro elderly housing project. low-income based income method capitalization of asserts that is correct while expenses income and upon actual based of income capitalization of a supports use Board approved a The Board market rents. estimated $4,483 million, land at valuing the total assessment $3,772 million; this at improvements million and $.711 $4,766 million. valuation of assessor's total reduced the income contrast, "Property's actual Metro, used the capitalization of income for the expenses" as a basis and assessment, assessed calculating a total approach to $1,713 million. value following Board shows
Testimony before the each buildings, three consists of Layton Garden facts. units apartment one-bedroom containing seventy-eight is utilized unit, latter of which two-bedroom and one was built Layton Garden managers. by building Federal was, is, under financed It 1972-73. elderly low-rent program as Authority 236 Housing ten-per- paid a reflects that Metro The record housing. obtained return downpayment cent construction federal through the mortgages forty-year low-interest *4 (HUD). Authority Development Urban Housing and according to were constructed buildings apartment The addition, In Metro restrictions. regulations HUD and/or premises at rent the would agreed that Metro and HUD per (approximately $230 rentals contract below-market 137 month). elderly generally pay thirty percent tenants monthly pays of the rental and HUD the balance. HUD $6,000 regulations per further limit Metro's income to year expenses building, any overage for each revert- over An to HUD. additional restriction on the owners is ing only can be removed for that the tenants cause —cause nonpayment of rent or waste. Removal of a being tenant is further controlled HUD regulations. Under mortgage regulations, terms of the and HUD the owners (1993 may pre-pay mortgage twenty years after case), thereby freeing this from all HUD allowing charge restrictions and the owners to market However, rents. a federal congressional moratorium has imposed part agreement.1 been on this of the Neither side contests the fact that under HUD regulations, reeil expense estate taxes are an of operating subsidized hous- ing is in determining charges. considered rental appeal agree
Both sides to this to the following First, highest facts. and best use of this is Second, residential rental units. there is no active mar- properties, ket for the sale of such because of the federal on federally housing servitudes low-rent units. It follows that since there was no recent arms- length comparable properties provide sale this or the best information available pur- for tax assessment poses, a recent sale comparable or sales basis could not employed Third, be in this instance.2 the cost evaluation is not proper method for use this tax assessment period although it is uncontroverted the record that replacement the cost of buildings approxi- for these mately Fourth, million. neither $5.5 side contests the
1 See Emergency Housing Low Income Preservation Act of (1989). § U.S.C.A. 1715/ § City Cudahy, 2 SeeState ex rel. Markarian v. 683, 687, (1970). 173 N.W.2d *5 premises insured these three fact that Metro historical $4,384 in casualty insurance the amount of for fire and (replacement) at the time of the controverted million parties agree the Finally, assessment. January of to tax assess- capitalization approach income that the apply. The dif- proper is the method to ment valuation parties upon the the basis which ference between does not contest the relevant income. Metro calculate comparable economic or market rents amount of the obtained, City of an of south side through examination units, by City for multiple the assessor Milwaukee rental does, however, valuation; contest the use of these it his the valuation of to arrive at the assessment values property. actual, or predicated on the
Metro's valuation was contract, was HUD. This valuation made rents with Munson, Appraisal Cor- the President of National Keith II, for a appraiser and assessor poration, state certified in municipalities southeastern Wisconsin. number County the in he was record reflects that Milwaukee Point, Bayside, River Villages for Fox the assessor Corners; in for Hills, County, the cities Hales Waukesha Genesee; and the Town of of Oconomowoc and Delafield County, City Burlington in and Racine has Point and Union Grove. Munson Villages Wind subsi- previously been involved the assessment one Wisconsin, housing property Burlington, dized calculation, based capitalization of income which rents, used because economic or market was rents. very to actual market rents were close contract correctly city assessor The Board found that statutory valued the subsi- mandate3 and followed 70.32(1), 3 See sec. property "Real shall be valued Stats. specified in the Wisconsin in the manner the assessor . .." manual. housing by employing approach using the income dized comparable required by
economic rents as the Wisconsin (Assessment Manual).4 In assessment manual *6 Findings approv- its of Fact and Determination5 written city's ing assessor, of the the the valuation Board relied specified Manual, in the Assessment the method 70.32(1), pursuant to sec. Stats. The Assessment Manual housing expressly states that "subsidized must be valued according if to the value it would command it were free and clear of encumbrances"6 and that when the income approach is used "for the valuation of subsidized hous- regardless ing, used, market rents must be of whether the or below market rent."7 contract rents are above appraisal Board further found that Metro's used the con- approach tract in its income valuation and did not rents presumption overcome the that the Milwaukee Board of Assessors' valuation was correct.8 It therefore sustained apartment the assessors' valuation of the three units as noted above. petitioned
Metro the circuit court for certiorari petition assessment;9 review of the Board's the was appeal, denied. On Metro raises a number of claimed dispositive errors relate to one issue: the use of opposed market rents as to contract rents in calculation using capitalization of assessed value the income Property 4 See sec. see also Assessment 73.03(2a), Stats.; Manual Wisconsin Assessors (1980) (full at 9-24 to 9-25 text for decision). provided appendix in the to this excerpt provided appen
5 An of the Board's decision is the dix to this decision.
6 1 Assessment Manual at 9-25.
Id. added). (emphasis Aero, Review, 8 SeeState ex rel. Mitchell Inc. v. Board 268, 283, (1976). 2dWis. 246 N.W.2d 528-29 9 See sec. 70.47(16)(a), Stats. issue whether the Metro frames this
approach.10 the arbitrary because it is based on Board's assessment Assessment Manual created found directions the Assessment Department of Revenue and whether in the uniformity found violates the tax clause Manual fails to follow the Wiscon- Wisconsin Constitution and sin tax statutes.11 we look to see
In context of first this.case hous- procedure whether the comports with in the Assessment Manual ing12 set forth uniformity Constitution's Wisconsin clause,13 interpreting judicial statutes involved and decisions if assess- We then determine the actual these statutes.14 procedure. These follows the assessment are ment fact independently the Board's questions of law reviewed error for Board to admit 10 Metroalso asserts that it was *7 Village Ltd. v. into State ex rel. Arrowhead La Crosse evidence Review, 24, 1987), (Wis. App. Sept. an No. 86-0447 Ct. Board of federally sub unpublished concerning decision the assessment inevi housing. unpublished does not Citation of decisions sidized Higginbotham, tably State v. 162 Wis. to reversible error. See lead (1991) ("Section 809.23(3), Stats., 978, 997, 471 24, 32 2d N.W.2d terms, unpublished by only express forbids the citation of its " (footnote omitted)). authority.' opinions precedent We or 'as Village although it to admit Arrowhead into hold was error 809.23(3), evidence, because the sec. the error was harmless see decision the Board relied this record does not indicate that Thus, not in judgment. own Metro was fact rather than its Toyota prejudiced by See v. Sumnicht this erroneous admission. U.S.A., 338, 376-77, Sales, 360 N.W.2d Motor (1984). 19-20 70.32(1),
11 Seesec. Stats. (revised 12/87). 12 1Assessment Manual at 9-24 and 9-25 Const, VIII, 1. art. sec. 13 Wis. 70.32(1) 73.03(2a),
14 See Stats. secs. and determination.15 TEXT
RELEVANT OF CONSTITUTION, and ASSESSMENT STATUTES
MANUAL uniformity of the Wisconsin Constitu- clause uniform but tion states: "The rule of taxation shall be may legislature empower villages cities, or towns to by estate located therein collect and return taxes on real optional methods."16 70.32(1), Stats., that the method
Section mandates property set which Wisconsin is assessed shall be specific document, forth in a the Wisconsin manual: "Real shall be valued assessment specified the manner the Wisconsin the assessor property 73.03(2a) provided manual under s. assessment from view or from the best information that actual practicably obtain, full can at the value which assessor ordinarily private be obtained therefor at sale." could "power 73.03, Stats., which sets forth the Section (2a) authority" department, in of the subsection directs department: prepare, published To have and distribute county having county system under s. each assessor town, city village in 70.99 and to each the state assessors, personnel for the use of assessment and the public . . .. detailed assessment manuals [which] accepted and illustrate shall discuss *8 methods, techniques practices and with a view to nearly more uniform and more consistent assess- Review, 15 SeeState ex rel. Assocs. v. Board 164 Wis. N/S 1991). 31, 41-42, (Ct. App. 2d 473 N.W.2d Const, VIII, 16 Wis. art. sec. 1. shall level. The manual property at the local ments of time to department from time to be amended assessment, in court the science of reflect advances costs, practices, concerning decisions to information deemed valuable and other statistical department.17 by the local assessors depart- statutory response directive, the In to this procedures, provided "standards, has ment of revenue assessing guidelines in all officials to be followed general of Wis- the State assessment of to Manual directs assessors The Assessment consin."18 assessment,"19 at an available to arrive use "the best data specifying income rents when the the use of market approach appropriate of subsidized hous- for valuation ing, "regardless are above the contract rents of whether the decision to The rationale for market rent.”20 or below rentals, from market, derives than contract utilize rather property, including all inter- "[t]he entire the view that property. . . . it, of the is assessed to the owner ests empowered Legislature to assess assessors has not up prop- against and so divide interests lessees leasehold erty purposes of taxation."21 THE ASSESSMENT OF
CONSTITUTIONALITY MANUAL argues found the method of assessment Metro pursuant agency promulgating rules manual 73.03(2a), Stats. 17 Sec. (first unnumbered Manual at Introduction 18 1Assessment 12/85). (revised page) Manual at 9-25.
19 1Assessment appendix provided in the of this section is 20 Id.The full text to this decision. Legal Opinion, March Department (citing Id. a Revenue 12, 1982). *9 authority,
statutory instructions to asses- in the form of uniformity of the state clause sors, in conflict with is requires federally sub- manual because that constitution differently housing from all other be assessed to sidized estate. real is an Assessment Manual first note that the
We assessing rely authority must when which assessors provisions property; of the manual to follow the failure grounds from removal of an assessor constitutes defers to the This court the circuit court.22 office legislature's depart-
"expression in the of] its confidence expertise" Assessment set forth ment's Manual.23 argument succeed, an must overcome
To Metro's admittedly heavy presumption of constitu- burden: the tionality legislative enactments. Tax stat- accorded to agency regulations, government such as this utes and federally housing, formulation for party challeng- presumed to be constitutional.24 The are constitutionality, prevail, ing must do so order Review, 220, Lomira, Village 2d v. Bd. 149 Wis. 22 Flood of of (Ct. 1989) (hereinafter I) 227, 575, App. Flood 440 N.W.2d 578 Stats.), 428, 451 aff'd, 17.14(1)(g), 2d N.W.2d (citing sec. 153 Wis. (1990) (hereinafter II). Flood 422 Madison, City Corp. Investment v. 151 23 TDS Realestate 1989). 540, 53, (Ct. 530, App. 445 N.W.2d 57 Wis. 2d Madison, City Hospital v. 92 24 SeeMadison Gen. Ass'n ("The 125, 130, 603, (1979) 605 burden Wis. 2d N.W.2d the same as the burden showing statute unconstitutional a tax constitutionality challenging must be assumed when which 935, Cullen, enactment."); any legislative Richards v. 1989) (Ct. (presumed App. constitu N.W.2d applies tionality legislative enactments to administrative rulings). beyond
proof "Only if a reasonable doubt.25 the chal- lenger arbitrary [tax] that the shows classification is purpose legislative has no reasonable will a classification *10 Merely establishing an element of doubt is insuf- fall."26 "beyond ficient to meet the the reasonable doubt" stan- "indulged every presumption dard because courts if will sustain the law at all We find Metro's possible."27 argument unpersuasive following for the reasons. uniformity standing First, clause, the text of the interpretation specifi alone, belies Metro's because it cally governments allows local to assess different kinds separately long property spe of real estate as as all of a uniformly. way, cific class is assessed Said another "all property within a class 'must be taxed on a basis of equality far as practicable.'" [28] A tax classification legitimate govern has a which reasonable relation to a purpose mental is permissible.29 Supreme
Second, the Wisconsin
Court has held that
uniformity
statutes,
tax
to meet the constitutional
requirement,
general governed by
following
are
principles relevant to this decision:
25 Quinn
Dodgeville,
570, 577,
v. Town
122 Wis. 2d
364
of
149, 154 (1985).
N.W.2d
26
Communications,
DOR,
512,
Woodward
Inc. v.
143 Wis. 2d
(citing Department
523,
137,
(Ct.
1988)
App.
422 N.W.2d
141
of
Co.,
Printing
610,
v.
625,
Revenue Moebius
89 Wis. 2d
279
(1979)).
213,
N.W.2d
219
27
Communications,
523,
Woodward
kee, (1967)). 408, 424, 147 N.W.2d 129-30, Hospital, 29 MadisonGen. 92 Wis. 2d at N.W.2d (classification non-profit hospital). at 605 property, under
1. For direct taxation one constitutional can be but uniformity rule there class. basis must be taxed on a All that class
2. within property taxed practicable and all equality so far as ad valorem basis. equally on an must bear its burden prop- no classification can be 5. While there taxation, rates of erty rules or for different property that classify as between legislature can wholly exempt, which is to be be taxed and that is to is reasonableness. classification the test of such mechanics of variations There can be 6. imposition long as the so or tax nearly as with as resulting shall be borne taxation with equality ad valorem basis practicable on an property.30 taxable other *11 criteria, appellate the Wisconsin respect to these
With
arrangements
financing
recognized
courts have
property31 or of
subject
price
sales
of either
affect the
instances,
the courts
In such
properties.32
comparable
to
for valuation
of review that
the boards
have advised
comparison,
the sales
or
used
either assessment
be
the effect of
to reflect
adjusted
must be
price
in this
Our decision
financing arrangements.33
particular
i.e.,
principle,
consid-
merely applies the same
case thus
financing, to valuation when
of the effects of
eration
of income.
capitalization
used is
method
424,
Milwaukee,
408,
147
City
30 Gottliebv.
(1967).
633, 641-42
N.W.2d
31
431,
II,
ACTUAL METHOD COMPORTS TO ASSESS-
MENT MANUAL uphold We now review the Board's decision to Appellate assessment. review on certiorari is limited to kept juris- consideration of whether the Board within its according arbitrarily diction, law, acted or acted or in faith, bad and whether the evidence before the Board might reasonably was such that it sustain the assess- only ment.34Metro asserts that the Board's decision to arbitrary; affirm the assessment was we thus address only applied this element of the test to certiorari review. case,
In this the Board considered the classification Layton buildings. of the Garden It noted there was no development. recent sale of this It also noted that there comparable federally were no sales of subsidized units. parties properly The Board further noted that both employed approach the income with some variations concerning vacancy expenses capitalization rates, Thus, rates. the Board articulated its consideration of depart- the various assessment methods set forth ment of revenue the Assessment Manual. Further- correctly significant more, the Board identified the most *12 parties' approaches: difference between the two the use by appraiser, compared of contract rents Metro's to the city comparable assessor's use of fair market rents. II,
34 SeeFlood
We therefore affirm the trial court's upholding of 1,1988, January Board's assessment of this by denying certiorari because this decision of the Board comported with the methods of assessment formulated manual, statutes,37 the tax and the uniformity clause of the Wisconsin constitution and was not arbitrary.
By the Court. —Order affirmed.
APPENDIX Excerpt from the Findings Decision, of Fact and Review,
Board of City of Milwaukee 14,
July
However, the taxpayer's contention that the actual con-
tract rents should
be used
calculating an income based
supported
valuation is not
70.32(1)
law. Sec.
Wis.
Stats., provides
that "real
shall
be valued
35 In re
Appeals,
Court
369,
263 N.W.2d
149, 149-50 (1978).
Stats.,
Section 17.14(1)(g),
provides
for the removal of
assessors who fail to follow the mandates of the Assessment Man
ual required
70.32(1)
73.03(2a), Stats.;
see also
under secs.
I,
Realestate,
Flood
578;
TDS
37 I.e., 70.32(1), sec. Stats. Prop- specified in in the manner the Wisconsin
assessor erty added). (emphasis Manual..." Assessment *14 Property Pages Assessment Man- 9-24 of the and 9-25 federally Assessors cover valuation of ual Wisconsin for explicitly housing. This section of the manual subsidized requires property though as assessors to value subsidized pro- The federal restrictions. section it were free from part: excerpted vides, in housing according the be valued to
Subsidized must it it were clear value would command free of if is, sub- simple, That it were encumbrances. if fee taxation, only police power, ject to limitations the of escheat, and eminent domain. using approach When income the valuation the for used, housing, rents be subsidized market must regardless rents are above whether contract [sic] determining or rent. When market below market rents, a the seeks to establish the rent that assessor tenant, utilizing highest its best property the to use, paying. is warranted
(at 9-25) p. pp. at 9-24 and 9-25 The contents the Manual entire recognition part on of the demonstrate a clear the requires Department of what it of assessors Revenue They valuing federally housing. faced with property must rights, including the based all its inherent assess rights have been trans- those which HUD for the duration of the contract. Absent ferred contrary, City regulation legislation or a assessor duty to value subsidized as the Manual has currently directs.
Therefore, the use of Board of Review finds assessing appropriate. market rents in this specific The market City rents which the used income valuation of the property were adequately sup- ported by comparables the rent presented and were not contradicted taxpayer.
The Board also finds that the other calculations used City its approach income to valuation support- are able and were made according to the Wisconsin Property Assessment Manual. testimony and other evidence provided by the owner did not overcome presump- tion that the Board of Assessors' valuation is correct.
Excerpt from 1 Property Assessment Manual Wisconsin Asses- (1980)
sors pages (revised 9-24 12/87) to 9-25 *15 FEDERALLY SUBSIDIZED HOUSING purpose The of subsidized housing, by as defined Department of Housing (HUD) and Development Urban is to assist low decent, safe, income families in renting sanitary and housing of design modest with suitable amenities. In a subsidized housing project, the tenant pays rent that is less than market rent. This lower rent is available either because the mortgage on the project is by Department subsidized Housing and Urban Development or because monthly HUD makes payments to the on landlord behalf of the tenant. Subsidized hous- ing regulated by government the federal with limita- rents, tions on replacement costs, the contract and amenities of such housing. These limitations are permit production intended to housing of suitable with- costs, factors, out design excessive or amenities. Some of imposed by the controls HUD on housing subsidized projects include: projects in all
1. least 30% of the families must At by very income families as defined HUD. be low 2. must the subsidized units The owner maintain sanitary, safe, HUD and decent condition. inspections
performs to ensure that routine are maintained. these standards approve and 3. HUD the terms conditions must project. financing for the comply project minimum 4. must with HUD building plans must All be standards. approved by HUD. approve any the site for
5. HUD must adequate housing project. The site must be exposure, utilities, size, contour, terms type of streets to accommodate the number and proposed. The must free from units site also be (i.e., flooding, conditions adverse environmental etc.) pollution, vermin, social, and accessible to educational, commercial, recreational, facilities. health compare reasonably
6. must to the Contract rents comparable may Rents rents of unassisted units. comparison determined market exceed those only by no more than 20% and when warranted expense cost and data. *16 Marketing HUD 7. of units must meet
approved Marketing Housing Affirmative Fair plan. property finan-
8. The owner must submit audited reports year any to HUD fiscal cial each may require. that other statements HUD In addition to all of these requirements, HUD also regu- selection, lates areas such as tenant requirements, lease security deposits, management, maintenance, eviction, adjustments. and rent
The regulations limitations and for subsidized housing spelled are in out more in detail the Code of Federal Regulations, the Housing Payment Contract, Assistance and the Annual Contributions Contract between HUD property and the owner. grant HUD can exceptions to these limitations requirements.
When property owner enters into a contract with HUD, the contractual limitations become encumbrances on the title for the duration of the contract. prop- The erty owner unable to property sell the ifas it were free and clear of encumbrances. Such a project has to be sold as a project federally with all imposed restric- tions adhered to purchaser. addition, In the owner sell, of a project may transfer, not or any make assign- ment of the contract without prior consent of the Housing Authority. result, As a there are few arm's- length sales of subsidized housing projects.
Recognizing that the federal government does have an interest the property for contract, the duration of the questions have been raised as to whether subsidy projects qualify would partial for a exemption based on Legal interest. Department counsel of the of Reve- nue has held that authority there is no treating part as exempt ownership by based on (Revenue government federal Department Legal Opin- 12, 1982). ion —March opinion states: "The entire property, including it, all interests is assessed to the property. owner of the The rights any person claiming an interest fee, subordinate to the lease, whether under otherwise, contract or would be *17 Legislature extinguished has not The a tax sale. against empowered interests to leasehold assessors assess purposes up property and so divide lessees taxation." according housing be valued to must
Subsidized if it free clear of command were and value it would simple, subject is, if it That were fee encumbrances. police power, only escheat, taxation, to the limitations and eminent domain. projects if be valued as available to
Such must also be put highest This and best use. will necessitate to the investigation highest thorough use of the of the and best property as of the assessment date. probable, highest is use is and best use which support highest pre- legal
reasonable, and will property. present use, In addition to the sent value may adaptable must uses to which the be other may an uses have effect be considered. These alternate legally if the uses are market value of the on the financially permissible and feasible. projects as if are to be valued unencum-
Given that such put highest use, to best to be bered and available proceed then to use the best data the assessor would This would include to arrive at an assessment. available cost, market, and income consideration approaches to value. housing projects, the sales of subsidized
Where there are analyzed they if determine meet sales must be may sales be of a dis- criteria of market value. Such As on the fee. nature and will include restrictions tressed estimating they such, mar- when cannot be relied only to the use ket The assessor not restricted value. housing value. to arrive at market sales of subsidized comparable apartment projects conventional Sales of *18 adjustments used, be with made for differences in can physical If attributes and amenities. a subsidized hous- ing project unencumbered, were it would be conventional housing. using approach,
When the cost the assessor must be regulations aware that as a result of the and restrictions per housing, projects higher on subsidized the will have a projects. than unit cost conventional This is due to by higher required pay regulations labor costs federal higher resulting construction costs from federal building regulations reg- which are more strict them local necessarily equal ulations. is not CAUTION: Cost to expense meeting building value. The added regulations the federal generally will not cause the market value of project such a to increase the same amount. The any, value, assessor must determine if what additional expenditure results from the of additional funds to meet building regulations. federal approach using
When the income for the valuation of housing, regard- used, market rents must be less of whether the contract rents are above or below determining rents, market rent. When market tenant, assessor seeks establish the rent that a utiliz- ing highest use, to its and best is warranted paying. in analyzing approach,
When data for the income subsidy operating expenses assessor will find that apart- projects higher on are than those conventional requirements projects reporting services ment due to required typical project. beyond in the rental The those operating expenses approach used the income must be experi- reflects the actual based on market data which competitive apartment projects. ence of conventional (dissenting).
FINE, prop- of real assessment J. by statute: erty governed property shall be valued assessor
Real specified in the Wisconsin the manner 73.03(2a) provided s. from manual under best that or from the information actual view at value obtain, practicably assessor can full pri- ordinarily at obtained could be which therefor vate sale. Stats, added). 70.32(1), (emphasis we As
Section recently recognized: value," 70.32(1),
"Full term is used section value," parcel which is "the amount is "fair market [a *19 arms-length negotia- for property] will sell of market, willing open an tion in the between owner sell, obliged buyer willing a but not but not to Aero, State ex rel. Mitchell Inc. buy." See obliged to Review, 277, 268, Board N.W.2d v. 246 of Property Manual 521, Assessment (1976); 1 526 for (Rev. 12/87). Assessors 7-3 Wisconsin Review, v. ex rel. Associates Board Wis. State 164 N/S 1991). 554, (Ct. 31, 42-43, App. N.W.2d 558 2d Thus, example, country-club for the assessment property "could facility to into account that had take rather, but, farm land. golf as a course" not be sold Petrick, Country v. ex rel. Oshkosh Club State Wis. token, 84, 251, (1920). 82, By the same 178 N.W. to min- private property subject "retained any rights, rights timber or an easement or similar eral gov- in such real estate" held "a Wisconsin interest unit," 70.32(1), or use sec. restrictions on land ernmental ordinance," ease- imposed by "zoning "conservation ment," agreement restriction under an "conservation or under ch. Stats. government," the federal with (farmland preservation), 70.32(lg), sec. must exclude the of the restrictions value or retained interests.1 undisputed artificially It is low rents that Metropolitan Holding Company charge sig- must have nificantly depressed price for which property open would sell on the in arm's-length market an trans- 70.32(1), Stats., amended, January 1Section was effective 1992, as follows: property Real shall be valued the assessor in the manner specified provided in the Wisconsin assessment manual 73.03(2a) under s. from actual from view or the best information that obtain, practicably the assessor can at the full value which could ordinarily private determining be obtained therefor at sale. In value, consider, piece, its'advantage the assessor shall as lu each or location, soil,
disadvantage quality timber; quantity standing uf uf mines, privileges, minerals, quarries, deposits water or other valuable therein, knuwn to be available and their but the "fact that the value: deposits ill'any parcel e&teut and value uf minerals or other valuable preclude of land are unascertained shall not the assessor frum affix- ing' parcel cunlthiidinarily to such the value which be obtained there- private occurring If at sale. on the assessment date in 1957 or any year any person governmental thereafter other than a unit of governmental Wisconsin owns real estate which a1Wisconsin unit rights, rights any faas-retained mineral timber or an easement ~or estate,"the any similar interest such real value of such retained right determining shall be eliminated in the assessable value uf such property, be-excepted and such retained interest shall in the assess- notice, description auy ment of such laud and in tax certificate oirtax following any arm's-length deed from such assessment recent sales of according professionally acceptable if to be assessed appraisal practices arm's-length those sales conform to recent sales reasonably comparable property; arm's-length recent sales of rea- *20 sonably comparable property; that, according pro- and all factors fessionally acceptable appraisal practices, affect the value of the property to be assessed. 1722, 9449(30).
1991 Wis. Act 39 secs. The amendment codifies accepted practice recognizes assessment and that "full value" is sale," would, arm's-length per best established a "recent which force, any account for enhancement or diminution of value as the statutory language. result of the factors deleted from the 157 disregarded Yet, of this the Board Review has action. depressed has "fair market value" and assessed actual hypothetical property value: what the the at a Metropoli- bring arm's-length transaction an would if charge prevailing Holding able to free-market tan were justification, of the As the Board Review and rates. majority
rely Property Manual on Assessment the for Wisconsin Assessors. Property Assessment Manual Wisconsin published by Department of Revenue
Assessors 73.03(2a), pur- pursuant Stats. The to section manual's pose accepted and illustrate assessment is to "discuss techniques practices methods, nearly with a view to more uniform and more consistent assessments property at local Ibid. The manual is to level." assessment, in the court "reflect advances science practices, concerning costs, and decisions information deemed valuable to statistical other department." "[n]o Ibid. local assessors agency Since may promulgate a which state rule conflicts with 227.10(2), Department law," Stats.; also Reve sec. see Howick, 274, 280-281, nue v. N.W.2d (1981), department nor the manual neither the 70.32(1), may modify or of section amend command Stats., real be at its that Wisconsin assessed Accordingly, value. the manual's actual fair market " housing that must [subsidized directive be valued according it if it free to the value would command were " using [w]hen and clear of encumbrances" so approach housing, for the income valuation regardless used, rents be market must whether rent," or 1Assess contract rents are above below market 9-25, See ment Manual at withers face of the statute. Equipment Commissioner, Co. Manhattan General v. (1936) (A regulation 297 U.S. that creates "a *21 statute, harmony nullity.") is a mere rule out of with Harder, 507, in Plain v. approval 268 Wis. (quoted with (1955) (rule 511, 68 statutory interpreting N.W.2d or business" phrase manufacturing "mercantile void)). "construction" contracts Since it encompassing buy undisputed buyer obliged that no who was not to $4,483 million purchase would for its assessment, prop that assessment does not reflect the By Assessment erty's permitting fair market value. 70.32(1), the Board of " Manual to override section " State ex 'according Review failed to act to law.' See Milwaukee, 726, 731, City v. Geipel rel. (1975) (citation omitted). Accordingly, N.W.2d I respectfully we must reverse. See ibid.2 dissent. need not therefore consider whether a statute
2We grants property subject relief to some but not all tax-assessment (see 70.32(1) (lg), government-imposed encumbrances sec. & Stats.) "uniformity Consti violates the clause" of the Wisconsin VIII, tution, 1. art. sec.