Once upon a time a property had three values. The lowest was the municipal valuation, then the bank valuation, for the purposes of a bond and then the market price which was usually higher than both. Today the municipal valuations are often higher than market value.
Once upon a time the value of a property was calculated by a municipality by adding the value of the unimproved property and the value of the improvements. Now for commercial properties they effectively value the business of the property.
This punishes the people who run their properties well and rewards those who run them down.
Many municipalities are in a death spiral, the higher they drive the municipal rates and taxes, the lower the values of the properties in their jurisdiction. But they don’t stop.
Eventually, and we see this in small towns, you can’t sell your property because no buyer is willing to assume the cost of the municipal rates and taxes. Then the owners abandon them because the cost of owning a property becomes more than the property is worth.
The towns become derelict, no one pays their rates and taxes and services collapse, accelerating the downward spiral. The only way to fix it is to cut municipal rates and taxes and the quality of services, then the properties become valuable again and owners start paying.