Franks v. Town of Essex, Rockingham Area Community Land Trust v. Town of Rockingham

Robinson, J.,

¶ 34. dissenting. I agree with the majority’s express central holding that 32 V.S.A. § 3481 does not compel an automatic reduction in property tax valuation for all parcels subject to a housing-subsidy covenant but instead demands an individualized consideration of the effect a particular covenant has on a property’s fair market value. Ante, ¶ 4. But I believe the majority’s focus on whether the statute mandates an automatic reduction from the unrestricted fair market value of a property versus individualized consideration of the effect of a covenant obscures the pivotai issue in this case.

¶ 35. The real bone of contention here is whether, in conducting the requisite individualized consideration, an assessor is supposed *612to determine the impact of the restriction on the appraised unrestricted market value of the property — which appears as the sale price on the property transfer tax return (PTTR) — or whether the assessor is supposed to figure out what a willing buyer would pay a willing seller for the property subject to all of the covenant restrictions, including the requirement that owner sell the property for what the majority calls “the option price,” such that the assessed value of the property does not encompass the additional quantum of market value that the property would have without the restrictions. Put another way, the key-question is: With a home subject to a statutorily qualifying housing-subsidy covenant, is the portion of the unrestricted market value that is essentially “held” by the participating nonprofit or other agency in the form of a grant and/or unrealized appreciation part of the fair market — and thus taxable — value of the property, or is the fair market value of the property in this context defined solely with reference to the value a buyer would pay for the property given the restrictions, including the limits on the proceeds that can be realized by the owner upon resale? I believe this is the question that actually divides the parties and the respective state appraisers. Although the majority does not squarely resolve this fundamentally legal question, I believe it does so implicitly in the context of its evaluation of the evidence in these two cases.

¶ 36. For the reasons set forth below, I conclude that in enacting 32 V.S.A. § 3481 the Legislature adopted the latter approach — that “fair market value” in the context of residential nonrental property subject to restrictive housing-subsidy covenants is calculated with reference to what a willing individual buyer would pay to purchase the property subject to the applicable restrictions, considering what that buyer could realize from reselling the property, and without regard to any potential value “held” by the participating nonprofit organization or state agency. Because the state appraiser’s analysis in the Franks decision is at odds with this approach, I would reverse. The state appraiser’s reasoning in the Rockingham decision is consistent with the above understanding, but I would remand this case for further explanation of the rationale underlying the state appraiser’s specific valuation.

I.

¶ 37. I begin with my reasons for concluding that the statute calls for a determination of the actual price an individual buyer *613would, pay to acquire the property subject to the various restrictions, rather than the total potential unrestricted value of the property reflected on the PTTR.

¶ 38. The relevant statute equates “listed value” with the “appraisal value” and provides that, with specified exceptions, “appraisal value” is the property’s “fair market value.” 32 V.S.A. § 3481. It, in turn, defines “fair market value” as follows:

The estimated fair market value of a property is the price which the property will bring in the market when offered for sale and purchased by another, taking into consideration all the elements of the availability of the property, its use both potential and prospective, any functional deficiencies, and all other elements such as age and condition which combine to give property a market value. Those elements shall include a consideration of a decrease in value in nonrental residential property due to a housing subsidy covenant as defined in section 610 of Title 27, or the effect of any state or local law or regulation affecting the use of land ....

Id. The point of this directive is to make it clear that fair market value — and thus appraisal value and ultimately listed value — is not based on the amount a buyer would pay for the property unencumbered by restrictions as to its use or resale but, rather, is based on the real-world amount a buyer would pay a seller for the property given the applicable restrictions. The requirement that an assessor consider the effect of the restrictions on value would make no sense if the touchstone of fair market value was the amount a buyer would - pay for a hypothetical identical property not subject to such restrictions. By definition, the restrictions would never affect value understood in that way, and consideration of the effect of the restrictions would be pointless. See In re Jenness, 2008 VT 117, ¶ 24, 185 Vt. 16, 968 A.2d 316 (“When possible we construe statutes to avoid rendering one part mere surplusage, and we strive to read all parts of the statutory scheme in harmony.” (citation omitted)). The Legislature’s indication that an appraisal should include “consideration” of the restrictions thus not only requires that the restrictions be a factor in determining “fair market value,” but also indicates that the “fair market value” the Legislature has in mind is that applicable to the property with the restrictions.

*614¶ 39. Moreover, the Legislature’s instruction that determination of fair market value should include consideration of the housing-subsidy covenants does not stand in isolation; the same provision requires consideration of “the effect of any state or local law or regulation affecting the use of land, including but not limited to chapter 151 of Title 10 or any land capability plan established in furtherance or implementation thereof.” 32 V.S.A. § 3481. The way one considers the effect of state land use regulation on the fair market value of the property is to determine what a willing buyer would pay to purchase the property subject to the applicable regulations — not what a willing buyer would pay to purchase the property in the absence of any such regulations. It would be odd to acknowledge that the “consideration” requirement in § 3481 requires that property subject to development restrictions be valued at the price a buyer would pay to take the property subject to those restrictions, but then to suggest that the same “consideration” requirement has a different meaning with respect to the housing-subsidy covenant restrictions. Vermont Golf Ass’n v. Dep’t of Taxes, 2012 VT 68, ¶ 30, 192 Vt. 224, 57 A.3d 707 (Robinson, J., concurring) (“In order to determine the intent of the Legislature, we must examine and consider fairly, not just isolated sentences or phrases, but the whole and every part of the statute, . . . together with other statutes standing ... as parts of a unified statutory system.” (quotation omitted)).

¶ 40. I do not contend that the words of the statute on their face mandate that the fair market value of covenant-restricted property “automatically” be pegged at a level lower than the fair market value of otherwise identical property not subject to the covenants (i.e., the amount listed on the PTTR). The impact of the covenant on the actual fair market value of the property as compared to the fair market value of a hypothetical identical unrestricted property will depend on the specific requirements of the covenant in question as well as the prevailing market conditions. I can imagine' a scenario in which the impact of a covenant on the actual fair market value of the property might be modest — such as a falling housing market in which the inability of a prospective purchaser to capture all of the future appreciation in a property does not substantially suppress the price that a buyer would be willing to pay for property subject to minor resale restrictions. But the statute does reflect a recognition that in the vast majority of cases a buyer would pay less for a property that *615is subject to legal restrictions — whether they be on use, development, or resale — than for an identical property without such restrictions. The statute does not require an “automatic” reduction in the value of property subject to the covenants relative to the unrestricted value reflected on the PTTR, but the individualized consideration required by the statute will necessarily lead to some reduction in value in the overwhelming majority of cases.

¶ 41. This interpretation not only best matches the language and structure of § 3481, it also best promotes the goals of Vermont’s statutory scheme. Am. Museum of Fly Fishing, Inc. v. Town of Manchester, 151 Vt. 103, 108, 557 A.2d 900, 903 (1989) (“In interpreting a statute, legislative intent should be gathered from a consideration of the whole and every part of the statute, the subject matter, the effects and consequences, and the reason and spirit of the law.” (quotation omitted)). The Legislature created the Vermont Housing and Conservation Trust Fund, administered by the Vermont Housing and Conservation Board (VHCB) for the express purpose, among others, of encouraging and assisting in creating affordable housing. 10 V.S.A. § 302(b). In fulfilling its statutory mandate, the VHCB makes grants to entities dedicated to creating or retaining affordable housing for lower income Vermonters, provided the bylaws of those entities require that such housing be maintained as affordable housing on a perpetual basis. 10 V.S.A. §§ 303(3)(A), 303(4), 321(a)(1). Also in furtherance of its policy promoting affordable housing, the Legislature passed a statute allowing for “housing subsidy covenants” to encourage the development and continued availability of affordable rental and owner-occupied housing for low- and moderate-income people. 27 V.S.A. § 610. The statute allows for the creation of a housing-subsidy covenant as a condition of, among other things, a grant, loan or contract made by a nonprofit corporation or state agency. Id. The restrictions built into the covenant may include without limitation restrictions on use, resale price, tenant income and rents, and restrictions on the income of a purchaser of a housing unit for his or her own residence. Id. This statute, designed to promote affordable housing, is, in turn, incorporated by reference into the statute governing property taxes that directs that fair market value be determined with consideration of the impact of such restrictions on the amount a buyer would pay. 32 V.S.A. § 3481. We must understand the instruction in § 3481 to “consider” the effect of restrictive covenants with reference to the Legislature’s expressed goal of promoting affordable housing.

*616¶ 42. If the hypothetical unrestricted value of a property were the benchmark for assessing property taxes, rather than the property’s actual value to a prospective purchaser given the restrictions on the property, a low-income person who qualifies for and purchases a covenant-restricted home pursuant to a housing subsidy could nonetheless be required to pay property taxes as if that person had purchased an otherwise identical unrestricted property on the open market. That taxpayer would be required to pay taxes at a level commensurate with a property that the low-income, housing-subsidy-eligible taxpayer presumably could not have afforded in the first place. That does not make sense. If a person can be subsidized into an affordable home, but taxed out of it when the first property tax bill comes, then the promise of the housing subsidy programs authorized by the Legislature is chimeric. See Shlansky v. City of Burlington, 2010 VT 90, ¶ 8, 188 Vt. 470, 13 A.3d 1075 (“In looking to the statutory language as an expression of legislative intent, we presume the Legislature intended an interpretation that furthers fair, rational consequences, and not one that would lead to absurd or irrational consequences.” (quotation and alterations omitted)).

¶ 43. I realize that this means that a quantum of the otherwise-taxable value of a property disappears from the tax rolls when an unrestricted property is subjected to a statutorily compliant affordable housing covenant, and that fellow taxpayers in a town with covenant-restricted affordable housing thus shoulder a higher share of the cost of local government. Ante, ¶ 12. That is true, but unremarkable. The Legislature makes policy judgments all the time that affect the way a town can tax property, and thus impact the tax liability of other local taxpayers. For instance, the Legislature exempts from property taxation most property owned by the state and federal governments, chartered veterans organizations, YMCAs and YWCAs, and animal welfare organizations. 32 V.S.A. § 3802(1), (2), (6), (15). It exempts from property taxation real estate used for public, pious or charitable uses, college fraternity houses, cemeteries, the grounds of annual agricultural fairs, qualifying property dedicated to water pollution abatement, qualifying health centers and certain solar power plants. Id. § 3802(4), (5), (7), (9), (12), (16), (17). And it has expressly exempted certain disabled veterans and their families from paying property tax on $10,000 of the appraisal value of their homes. Id. § 3802(11).

*617¶ 44. In all of these cases, the Legislature has concluded that the public interest warrants limiting the property taxes a town can collect from certain property owners, thereby forcing municipalities to socialize more of the costs of local government among other property tax payers. The Appellate Division of the New Jersey Superior Court likewise recognized the public benefit of affordable housing legislation in concluding that the taxable fair market value of affordable housing subject to resale restrictions should be determined on the basis of the value of the property subject to the deed restriction. Prowitz v. Ridgefield Park Vill., 568 A.2d 114 (N.J. Super. Ct. App. Div. 1989). The court in that case explained:

The deed restriction limiting resale price constitutes a patent burden on the value of the property, not on the character, quality or extent of title. It is, moreover, a restriction whose burden on the owner is clearly designed to secure a public benefit of overriding social and economic importance, namely, the maintenance of this State’s woefully inadequate inventory of affordable housing.

Id. at 118. In short, the notion that home-ownership by low-income Vermonters is at least as worthy a public good as college fraternities and county field day celebrations is not jarring.

¶ 45. Moreover, the Legislature has enacted restrictions on development throughout the state that affect the value of property subject to those restrictions while promoting a perceived public good. A regulated property is appraised at its fair market value subject to whatever restrictions apply, rather than the amount a seller would pay on the open market for otherwise identical property not subject to such restrictions, 32 V.S.A. § 3481(1), so a town realizes less tax revenue from that property than it would have in the absence of the regulations, and other taxpayers in the town pay more than they otherwise would have. Diminution in the taxable value of property resulting from state regulation is by no means unique to the affordable housing setting.

¶ 46. My understanding of the statute is also consistent with the way it applies to subsidized rental housing. Prior to 2005, the statutory section that requires consideration of qualifying housing-subsidy covenants on residential property lumped together restrictions applicable to rental and nonrental properties, requiring *618“consideration” of those restrictions in valuing either kind of property. 32 V.S.A. § 3481(1) (2004) (amended 2005). In an unpublished and nonprecedential 2002 entry order, a three-Justice panel of this Court reversed an appraisal based on an income-capitalization approach that assumed market rents were unobtainable in light of the applicable statutory restrictions. The panel concluded that the statutory requirement that the appraisal include a consideration of a decrease in value due to a housing-subsidy covenant precluded the appraiser from relying on actual market rents and required, instead, consideration of rents actually obtainable in light of the covenants. Laterre House Ltd. P’ship v. Town of Wilmington, No. 2001-341, 2002 WL 34423628, at *3 (Vt. Mar. 27, 2002) (unpub. mem.), https://www.vermontjudiciary.org/ LC/unpublishedeo.aspx. The panel was right in 2002, and the logic of its decision applies with just as much force in the context of nonrental residential property. As with rental property, the valuation of nonrental residential property subject to housing-subsidy covenants must be determined with reference to the proceeds a prospective buyer could actually receive upon resale of the property in light of the covenants, not based on the fair market value of a hypothetical, otherwise identical piece of unrestricted property.7

¶ 47. The position of the Division of Property Valuation and Review (PVR) of the Department of Taxes reinforces my conclusion. The Legislature has assigned PVR responsibility for providing technical assistance and instruction to the listers in a uniform appraisal system, and assisting municipalities in the administration of property taxes, including the appraisal of classes of property difficult to appraise. 32 V.S.A. § 3411(5), (10). Pursuant to this authority, the director of PVR issued a memorandum to boards of *619listers in November 2008 providing guidance concerning valuation of owner-occupied homes subject to resale restrictions as defined in 27 V.S.A. § 610. While this appeal was pending, on January 3, 2012, the- Commissioner of the Department of Taxes issued a technical bulletin signed by the director of PVR and the Commissioner that incorporates the analysis of the November 2008 memorandum. Far from contradicting the requirements of the statute, the memorandum and bulletin reinforce that the statute here requires town listers to determine the value of property subject to housing-subsidy covenants with reference to what a purchaser would actually pay for the property with the restrictions.

¶ 48. I am not taking issue with the majority’s conclusion that the PVR memorandum does not compel the use of PVR’s recommended methodology for valuing the property here to the exclusion of any other approach. Ante, ¶¶ 18-19. But the memorandum and the Commissioner’s position have broader significance. The PVR memorandum offers a specific mechanism for valuing properties subject to housing-subsidy covenants, but the core message of the memorandum is more general: Listers should value properties subject to resale restrictions based on their restricted value and not their fair market value without regard to the restrictions. In the end, this Court is the arbiter of questions of law. However, PVR’s interpretation of the requirements of the tax statute is entitled to the same deference we afford other agency interpretations of statutes within their purview. See Mollica v. Div. of Prop. Valuation & Review, 2008 VT 60, ¶¶ 9, 11, 184 Vt. 83, 955 A.2d 1171 (we generally defer to administrative agencies interpreting statutes within their legislatively delegated expertise, though our “paramount concern” is construing a statute consistent with its express purpose).

¶ 49. This understanding of the proper application of 32 V.S.A. § 3481 is consistent with our application of the statute in other contexts. In the case of Townsend v. Town of Middlebury, 134 Vt. 438, 365 A.2d 515 (1976), this Court considered the impact of a renewable lease and a preemptive purchase option on a property’s fair market value for property tax purposes. Noting that § 3481 requires consideration of laws affecting the use of a property in determining the property’s value, this Court concluded that “the Legislature intended that bona fide restraints affecting property, at least those governmental in origin, should be a factor in determining fair market value.” Id. at 440, 365 A.2d at 516. The *620Court extended the principle to include restraints in favor of a nongovernmental entity arising from private dealings — a renewable lease and a preemptive purchase option — on the ground that all of the elements affecting the availability of the property and its use combine to give property a market value. Id. The Court concluded that it was “obvious” that the lease/option affected the market value of the property because:

[a] buyer, confronted with the presence of a lease/option involving a parcel of property which [the buyer] was interested in purchasing, would certainly take such agreement into account in determining what price [the buyer] would find acceptable for the parcel desired since any such agreement would affect both the use and future alienability of the property.

Id. Accordingly, we concluded that the property should be valued at the price a willing buyer would pay to purchase it subject to the relevant restrictions. Id.

¶ 50. For all of these reasons, I believe the statute requires that the touchstone for valuing property subject to a housing-subsidy covenant is the amount an individual buyer would pay to purchase the property subject to the various restrictions that apply, and is not the total unrestricted value the property would have in the absence of the covenant.

II.

¶ 51. The majority does not expressly hold otherwise,8 and does not squarely address what I believe to be the central legal issue in this case. Instead, it weighs the competing arguments on the question of fair market value as if they were evidence about a question of fact, without isolating and independently addressing the threshold legal question that should drive the factual analysis. Lurking silently within the “evidence” and findings the majority relies upon as supporting the state appraiser’s conclusion in the Franks case, as well as in the failings the Court points to in the state appraiser’s analysis in the Rockingham case, is an unspoken *621conclusion that the unrestricted market value is the guiding star in valuating the property at issue in these cases.

A. Franks

¶ 52. In the Franks case, the majority recounts the testimony supporting the state appraiser’s decision. The majority notes that the Essex town assessor found no evidence that the covenant reduced “the value of the property.” Ante, ¶ 24. But the majority also rightly acknowledges that the same witness took the position that the covenant dictates the option price at which the owner must sell the property back to Champlain Housing Trust (CHT), and the amount of equity the owner may realize upon sale, but did not affect the “value” of the property. Id. The town assessor’s conclusion that the covenant does not impact value rests entirely on his position that the total, hypothetical, unrestricted value of the property is what is legally relevant in the determination of “value,” as opposed to the amount of equity a particular owner (and thus a prospective buyer) might realize on resale. Likewise, the same town assessor used “comparable sales” to establish that the covenants did not impact the value of the property. But the “comparable sales” data he used relied on the prices reflected on the PTTR — the figure reflecting the hypothetical, unrestricted value of the property to a willing buyer. Again, the weight of this “evidence” depends entirely on the validity of the legal assumption on which the town assessor based his conclusion.

¶ 58. The majority cites a real estate appraiser who similarly testified that the covenants do not decrease the value of the property. Ante, ¶ 25. As the majority says, this expert testified that the restricted price is not arrived at by way of an arms-length transaction because it is the result of a contractual arrangement between the owner and housing trust, and although the covenants affect the net amount sellers receive when they sell the property, the subsidy provided by the housing trust does not actually reduce the property’s value. Id. Again, this expert clearly views the operative value as the unrestricted fair market value, not the value that an individual would pay to purchase the property subject to the resale restrictions and limitations on equity realized. The relevance of his testimony depends on the soundness of his legal assertion.

¶ 54. The majority describes the testimony of a different town assessor who likened the covenants in the Franks case to “back *622end loaded mortgages,” and testified that his town does not adjust the value of property based on the amount of outstanding liabilities, presumably including mortgages, on the property. This testimony similarly rests on a legal conclusion that the relevant value is the whole value of the unrestricted property — not simply the owner’s “equity.”9

¶ 55. Finally, the majority notes that taxpayer failed to present comparable-sales market evidence to show that the covenant reduced fair market value. If my understanding of the law is right, the concept of relying on comparable-sales data makes no sense — especially if the “sales price” of the comparable sales is the unrestricted value reflected on the PTTR. By definition, as noted by the majority, the property purchases in these cases are not arms-length, market transactions. The actual price an individual pays to buy a home — and the return the individual can potentially receive on resale — are largely a function of the CHT grant associated with the property. The larger the grant, the lower a buyer’s cost to purchase the property and the lower a buyer’s potential proceeds upon resale. It is difficult to imagine how one could construct a meaningful “comparables” analysis in this context. That is no doubt why the methodology suggested by PVR focuses on the buyer’s actual net purchase price, or net purchase price plus twenty-five percent of the appreciation, as the marker of fair market value.

¶ 56. That the state appraiser equated fair market value with the property’s hypothetical unrestricted value is clear from the numbers. Franks paid $81,250 to purchase her property in 2003. At the time, the unrestricted value of the property was $130,000. The unrestricted value of the property had risen to $173,900 in 2010 — representing an increase in the hypothetical, unrestricted value by $43,900. If Franks sought to sell the property, she would be required to sell to CHT for an option price, which, assuming she had not made any significant capital improvements, would be *623$92,225 (($130,000 less $48,750 in grants) plus ,25($43,900)). The state appraiser has concluded that a willing buyer would pay $173,900 for property that taxpayer could not sell for more than $92,225. He was obviously considering the unrestricted value of the property in ascertaining fair market value. That a buyer would not pay anything close to $173,900 to purchase property that could be resold for no more than $92,225 seems self-evident. See Townsend, 134 Vt. at 440, 365 A.2d at 517 (buyer considering parcel subject to lease/option “would certainly take such agreement into account” in determining an acceptable price for the parcel desired “since any such agreement would affect both the use and future alienability of the property.”).

¶ 57. In sum, the state appraiser’s conclusion in Franks does not represent a weighing of the evidence warranting the deference this Court affords to the state appraiser’s findings of fact; rather, it reflects a legal determination about the definition of fair market value in the context of resale restrictions incident to affordable housing programs. Because I conclude that the legal standard applied by the state appraiser was wrong, I would reverse the state appraiser’s decision and remand for a determination of what a willing buyer would pay to buy the property subject to the various resale restrictions, including the restriction on the equity a buyer could recover from the property upon resale.

B. Rockingham Area Community Land Trust

¶ 58. In the Rockingham case, the majority is not so deferential to the state appraiser’s determination of fair market value, rejecting the state appraiser’s determination because the taxpayer had failed to produce evidence of comparable sales. Ante, ¶ 33. For the reasons noted above, the concept of “comparable sales” is not that helpful in the unique circumstance of property subject to restrictive housing-subsidy covenants.

¶ 59. The state appraiser in the Rockingham case thoroughly reviewed the testimony of the various parties and commonsensically concluded that the housing-subsidy covenant “removes one of the bundle[s] of rights an owner has or prospective buyer should consider before purchasing a property.” Given the Legislature’s express instruction that fair market value be ascertained with consideration of the impact of the housing-subsidy covenant restrictions, 32 V.S.A. § 3481, he reasonably concluded that the Town’s assessed value did not comply with the statute. He *624rejected the Town’s legal analysis, explaining that “while the full value of the property may well continue to be represented by the buyer’s investment plus the grant ... the legislation evinces a clear intent to remove a portion of the value that would otherwise be taxable from the appraisal value in order to advance a separate legislative goal favoring affordability of housing.” I find the state appraiser’s legal analysis in the Rockingham case spot-on.

¶ 60. As in the Franks case, the numbers clearly make this point. If Margaret wanted to sell her property, assuming she made no capital improvements, she could not sell in the first instance for more than $108,350, calculated as follows:

$121,200 (unrestricted value when she bought it)
- $18,500 (grant from the land trust and appreciation during the prior owner’s tenure)
+$5,650 (twenty-five percent of appreciation of unrestricted value based on Board of Civil Authority’s valuation)

Given these figures, no reasonable buyer would pay $143,800 to step into her shoes. The state appraiser’s conclusion that the actual fair market value of the property was accordingly substantially lower than the unrestricted value asserted by the Town of Rockingham jibes with the evidence.

¶ 61. I agree with the majority that the state appraiser’s rationale for designating $118,000 as the value of the property is not entirely clear. That the state appraiser’s 2010 appraisal is identical to the 2009 appraised value is clear. The reason the state appraiser adopted the 2009 appraisal values for the property is not clear. I would remand to the state appraiser to explain the basis for adopting the 2009 appraised value for 2010, or for further proceedings.

III.

¶ 62. This is a straightforward case of statutory interpretation. The majority has taken its best shot at' discerning the proper application of Vermont’s statutory scheme regarding taxation of property subject to restrictive housing-subsidy covenants. For the reasons noted above, I disagree with its conclusions. The good news is that the ultimate power to determine how properties like the ones in this case are appraised remains with the Legislature. *625If the majority got it right, the Legislature can be satisfied with this decision. If the majority’s understanding of the statutory scheme does not jibe with the Legislature’s intent, the Legislature can amend the statute to make its intentions more clear.

The majority points to specific language in the statute added in 2005 that sets forth a methodology for valuing residential rental property subject to housing subsidy covenants. Ante, ¶ 12 n.2. The majority points to this language as evidence that the Legislature could have, but did not, adopt a specific required methodology for valuing nonrental residential property. Id. I do not disagree with that general conclusion. By providing a methodology for valuing rental residential property subject to housing-subsidy covenants that takes into account the rents realizable pursuant to those covenants •— incorporating by reference the U.S. Department of Housing and Urban Development’s market value figures — the language, as revised, also reinforces the understanding that the statute calls for valuation of property with reference to the value a prospective purchaser could actually realize from the property rather than the hypothetical value of otherwise identical unrestricted property.

The majority’s discussion distinguishing the New Jersey Superior. Court Appellate Division’s opinion in Prowitz and suggesting that taxpayers here seek to shift a disproportionate tax burden to fellow taxpayers suggests that the majority believes that the unrestricted value of the properties at issue in these cases determines fair market value, but the majority does not expressly say so. Ante, ¶¶ 11-12.

The analogy also fails to acknowledge the critical distinction between a mortgage encumbering property and the arrangement at issue here: The Vermont Legislature has not passed a statute requiring that an appraisal for property tax purposes take into account the indebtedness encumbering real property through a mortgage securing a debt, but has specifically required consideration of the housing subsidy covenants. 32 V.S.A. § 3481. Though the subsidy in the Franks case may function financially in a way that is analogous to a mortgage, the distinct arrangements are apples and oranges with respect to the laws governing property valuation.