Dispatches from government reporter Johnny Edwards

Maybe nuances of home appraisal are beyond my grasp

I’ve always been under the impression that a property appraisal is supposed to be an estimation of what it would actually sell for on the open market. Silly me.
It seems there’s more to it, nuances and equations I don’t fully comprehend, as I learned in my misadventures with the Board of Equalization this week.
It all started Wednesday when I attended a hearing, as a reporter, to hear the owner of defunct Regency Mall argue that the Augusta Tax Assessor’s Office shouldn’t have raised the value from $4.2 million to $16 million, which would have raised the taxes from $51,223 last year to $193,543 this year.
Mark Axler, the property manager for New York-based Cardinal Entities, showed up, and there was some back-and-forth about how the appraiser calculated the value. He told the board that a deal to sell the mall fell through in 2008, when the market crashed and financing dried up, but it looks to be back on now.
I kept waiting for someone to address the elephant in the room, or the elephant I thought was in the room.
The question not asked: “Mr. Axler, you’ve said publicly that the mall is worth $50 million, which is why the city couldn’t buy it and demolish it in hopes of revitalizing that corridor. How can you say $16 million is too much?”
In the end, the board saw it his way. Citing a “lack of equity,” they reduced the value back down to $4.2 million. I talked to Mr. Axler in the hallway afterward, and he told me if the sale goes through, the buyer plans to do some type of mixed-use development. The price: $52.5 million.
After that, I felt pretty confident about my own hearing before the Board of Equalization the next day.
Despite the state of the housing market, my value got raised by about $8,400, which is irritating considering that when I tried to refinance earlier this year, the bank said my house had depreciated and cut off my line of credit.
I tried to impart that the notion of a house like mine increasing in value right now is patently absurd.
I showed photos of a hideous eyesore at the top of my street that any potential buyer has to drive past, a boarded-up house where the listed owner is long dead and his stepson keeps paying the taxes and doesn’t keep the yard up to code.
But I was badly outgunned.
Two appraisers told the board in detail how they had merely synchronized my land value with surrounding land values. What that has to do with someone actually buying it is beyond me.
I got the impression a few board members saw my point, but they still sided with the appraisers.
Sitting there dejected at the center of a conference table, I felt like General Zod inside the rotating rings at the beginning of Superman, judged by all those giant holographic heads.
The whole episode got me to thinking. That property up the street is killing my home value, yet I pay nearly twice in taxes. The assessor’s office says that’s because the other house has been deemed “unlivable.”
So the ones dragging the rest of us down – something city appraisers won’t acknowledge – get a discount. Something’s not right about that.

Reach Johnny Edwards at (706) 823-3225 or johnny.edwards@augustachronicle.com.

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HillGuy
7
Points
HillGuy 09/19/09 - 02:44 am
0
0
Johnny.. you are absolutely

Johnny.. you are absolutely right! read Butch Palmer's platform.. he supports changing the property tax code to reward people who fix up their property and keep it up to code instead of rewarding the absentee property owners who create eyesores and drag down everyone elses's market property values. http://www.butchforaugusta.org  Copupled withe the Chronic Nuisance Property Ordinance, he and Lori Davis is advocating, this could truly revitalize Augusta. It is absolutely insane that the owners of Regency mall are having their proerty taxes reduced.. after they have adversely affected the property values of homeowners in South Augusta for years. Augusta needs change badly. This cannot continue.

deekster
24
Points
deekster 09/19/09 - 06:45 am
0
0
Johnny, This needs  to be

Johnny, This needs  to be front page news.   After my expericence with the CC Appeals Process I thought of suggesting a story by the CC NEWS.   I submitting a detailed letter outlining the the tax value, recent sales , sq ft and  bdr/ba stats for my neighborhood.  I pointed out the properties that were Section 8 Rentals, real estate broker rentals, houses used for businesses, and houses with rotten wood and broken windows.   I was told that most of what I had described as reasons why property values had dropped were actually CODE VIOLATIONS, and were handled by another department.  Property sales in the current year or previous year, square footage and number of full baths determine the tax value.   Full baths weigh heavily on the outcome.  Single level vs. multilevel is of little consequence.  Basically, if there is a sale in your vicinity in the year, no matter what its features or conditions, it may  impact your TAX APPRAISAL upward, but not downward.

Taylor B
5
Points
Taylor B 09/19/09 - 07:49 am
0
0
They jacked the taxes up on

They jacked the taxes up on the mall to get the owners to sell. That's called behavior modification by taxation. Alvin Mason admitted to it. No matter how you feel about the mall, the owners, or the eyesore quality of the area, remember, reassessments are like tax hikes, and can happen to the best of us. The mall is private property, like the home you live in. Watch closely, because whatever happens, can happen to you.

Junket831
0
Points
Junket831 09/19/09 - 08:48 am
0
0
Excellent post Johnny! All

Excellent post Johnny! All properties should be taxed at the prevailing rate, no exceptions. If a home or business owner doesn't want to keep up their property or for some unplanned reason is unable to do so that is not the problem of the general public. These individuals need to sell the property. No point in hanging onto something they are not able to care for.

My preferance would be to have a flat rate property tax that is based on the size of the lot and current sales information. The size of the house or number of bathrooms just creates a bureaucratic mess that no one quite understands.  

Johnny Edwards
0
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Johnny Edwards 09/19/09 - 09:33 am
0
0
atctaylorb, I'm not

atctaylorb, I'm not convinced the assessor's office raised the value to get the owners to sell. If that had been the case, the value would have been raised to $50 million. What the appraiser did was apply Cardinal's $2.3 million purchase of the Montgomery Ward building in 2007 to the entire site. In other words, she took the rate of that 10-acre parcel and applied it to the entire 72 acres. Mr. Axler told the board they only bought that last piece so they could own the entire mall and hopefully get it redeveloped all at once. He said the value of a non-operating mall can't be increasing. The board didn't buy what the appraiser did and called it "lack of equity."

My point is that when one property owner lets their house or building go to pot, it affects the properties around it. No one's going to pay top dollar for a house if one or two doors up there's a rotting piece of junk with an overgrown yard, or a duplex with unemployed tenants who sit on the porch drinking all day while cars with Burke, Screven, Jenkins and Jefferson county plates come and go.

But I don't get the feeling the tax assessor's office gets this. They just look at nearby sales, which might be a street or two away, and apply that to your house. It's not fair that people doing their best to keep their properties "livable" have to pay more than those who don't live up to their moral responsibilities. I don't know what the solution is. You can't raise their property taxes because those are based on home value, and an eyesore isn't worth much. The solution might be to jack up the cost of a mothball permit, which is $21. Maybe add some zeroes to that. But I don't know how effective a higher rate would be because houses boarded up before the ordinance passed are exempted by grandfather status.

You're right, atctaylorb, behavior modification through taxation is something we should avoid. It's quite a dilemma, and as neighborhoods get ruined, fed up people will go on splitting for Columbia County, and taxes will go on increasing while services decline.

Discussionstarter
467
Points
Discussionstarter 09/19/09 - 09:35 am
0
0
The appraisal process in

The appraisal process in Columbia County is not correct.  Actual sale prices are lower and do not reflect current appraisal values by the tax office.  Everyone should file an appeal.

Johnny Edwards
0
Points
Johnny Edwards 09/19/09 - 09:56 am
0
0
Junket831, you might be onto

Junket831, you might be onto something there. Take the "unlivable" stuff out of the equation and tax the dilapidated houses at the same rate as their neighbors. Something else I tried to argue to the Board of Equalization was that I have an issue with a leaking roof in an attached shed, and until I get it fixed, a potential buyer would have to address that as well. The board wouldn't take this into account either. And yet the assessor's office will take "unlivable" into account.

Perhaps the solution is to add some kind of "dragging down other propery values" calculation into the tax value. Maybe the itemized explanation should say something like, "Value: $10,000; Total depreciating effect on surrounding neighbors: $100,000; Total tax value: $110,000." Of course, I should mention that the assessors office's calculations are based on state law, so any change in how these things are figured would have to come through the legislature.

oldetownbroad
0
Points
oldetownbroad 09/19/09 - 10:02 am
0
0
Olde Town has the same

Olde Town has the same problem.: boarded up houses, overgrown lots, delapidated dwellings, and we get little response when we try to get the city to help us keep our property values up. ( up as for resale value. As you say,  the city keeps the value going up no matter what the other houses in your block look like.)  We need to push for more code enforcement, especially with absentee landlords.  I recently had to pay last years taxes on my property or face my house being sold at the court house.  Yes, I had a rough year and needed some extra time.  I questioned why some homeowners in my neighborhood were over 7 years behind in paying their property taxes and still had their homes.  I was told that most absentee landowners use a post office box and therefore cannot be served official papers.  THIS IS WRONG. It is time for the rules to be changed so the hard working honest people can stop paying for the slugs.

Taylor B
5
Points
Taylor B 09/19/09 - 10:08 am
0
0
Johnny, there was an article

Johnny, there was an article about this, I want to say Feb 24th, you may have written it, I don't know. I wrote a LTE about it that was printed a few days later. There was a quote by Mason that backs my point.

disssman
6
Points
disssman 09/19/09 - 10:20 am
0
0
Johnny what I find

Johnny what I find absolutely amazing is that there is not listing on the city web site naming who is on any boards.  I can find the authorization for the board but no mention of who is sitting on a board.  Why is that a secret?  My reason for looking was to see the qualifications of board members and to see whether they were political hacks or actual experts in the field.

lvtfan
2
Points
lvtfan 09/19/09 - 10:14 pm
0
0
Assessments are supposed to

Assessments are supposed to reflect the market valuations of every property within the community as of a certain date.  They ought to be based first on how much the land itself is worth, and then what the depreciated value of the existing improvements are.  A good assessment gets within about 5% of the real market value of all properties, and it is a fair and just way to determine how the burden of the costs of providing government services which serve to maintain property values ought to be allocated among all the landholders.

Someday, we will shift away from taxing building values, and simply place our taxes on the land value.  We're not there yet, though some cities in PA have figured out that things work better under that sort of set up.

Appraisals are for a different purpose, and are to reflect the current market value of the property, in order to determine how much a lender should lend, and how much they could get back -- quickly -- if they needed to sell the property in the open market today.

Assessments ought to be readily available online, for all to see and all to compare.  Land values ought to be mapped, and ought to make sense to the knowledgeable local person.

Should the locality need to acquire a piece of land currently owned by an individual or corporate entity, it ought to be paying an amount that relates closely to the assessed value.  The amount on which one's taxes are based ought to be quite close to the value involved in cases of eminent domain.

In most places, the existing buildings are mostly depreciated, and the vast majority of the value is in the site, the land.  So "synchronizing" with neighboring properties isn't too far off, in general, unless your home is brand new and the neighboring ones are tumble-down.  

We're dumb to penalize those who put their well-located land to good use, and to reward those who underuse their land or maintain their improvements badly.

 

dickworth1
954
Points
dickworth1 09/20/09 - 12:47 am
0
0
The bottom line is fred
Unpublished

The bottom line is fred russell and the current commissioners and mayor are on the Obama platform, tax and spend, the hell with the economy, unemployment, or your life savings going down the tube, they do not care! Vote them out of office or just sit on your behind and do nothing ! The local officials are probably nervous with the FBI doing investigations against bribes and spending money on an employee with money obtain by voting on a building to change to section 8 housing... those involved don't see anything wrong with what was done with the bribe, oh excuse me, the donation to the city for charitible organizations. Get real, get them thugs out of office.

 

 

Harrisburg Homeowner
0
Points
Harrisburg Homeowner 09/20/09 - 06:59 am
0
0
Honest question here:  How

Honest question here:  How does one person post the same thing five times?  Is it a hiccup in the system or what?

Harrisburg Homeowner
0
Points
Harrisburg Homeowner 09/20/09 - 07:22 am
0
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Now, back to the question at

Now, back to the question at hand: 

Johnny, I am assuming that you wanted to investigate for yourself to see if property was truly being being taxed unfairly.  Now you know.  It is a quagmire of legalities and of who does the interpretation of them. 

The city was having a lot of break-ins of vacant (practically abandoned) houses so they tried to make it lucrative for property owners to board them up.  The problem is, there is supposed to be a limit on how long properties are kept boarded up (I believe a year) before the property owners do something with them. 

Since the city has no system in place to maintain the current addresses of property owners, when the time comes to make the owners follow code, they can't find them to issue papers. 

I have two suggestions that the commission may want to consider:   

1)  Hike the property taxes of these nuisance houses up so high that the owners feel compelled to contact city officials.  Make them appear in person to address the issue.  Once the owners come down to complain, have someone there to give them the code enforcement paperwork and obtain a current address. 

2)  Have the city advertise that the property is in danger of being razed at the property owner's expense due to failure to comply with city codes (or pay taxes for that matter).  If anyone disagrees with it, they are to appear at such-and-such a place at such-and-such a time to address it.  I'll bet property owners will show up in droves!  If not, we'll have some nice green space that can be sold to adjoining property owners, so they can expand their houses to meet their current needs instead of moving to larger homes in Columbia County.

Tell it like it is
35
Points
Tell it like it is 09/20/09 - 10:12 am
0
0
The old saying " You can't

The old saying " You can't fight city hall" prevails. Especially since city hall is proving to be run by a bunch of crooks. My house in National Hills was valued at a price way above its selling price in 2008.  I complained that the whole country was devaluing homes yet mine was increased, why? I was told the value of the homes in Augusta was based on the surrounding sales of 2006. That is insane the bottom of housing fell out after that. You can bet the homeowners of Richmond County will be taxed so much they will give up and sell for what ever they can and move away. Fred can turn off the lights after everybody has left.

Taylor B
5
Points
Taylor B 09/20/09 - 10:31 am
0
0
Themctier, so because the

Themctier, so because the city cannot keep up with the adresses of homeowners, you want to raise taxes until they beg for mercy in person? Sounds constitutional to me. My taxes have doubled since 2006, and I am not happy about it. The city, due to liberal tax spending policies, is causing this, and thinking raising taxes my rate increase and reassesment will help. They cannot raise the rate too much more by law. That's why your trash service is a fee, not an increase. Sneaky, huh?

tag3574
0
Points
tag3574 09/20/09 - 03:38 pm
0
0
The tax assessment process

The tax assessment process is nothing more than a way for politicians to raise our taxes and then come back to us with a straight during the next election and "claim" that they didn't raise our taxes.   Purchase of a house used to be a way to lower taxes and participate in the Great American Dream.  Now, houses are treated like a paper investment and speculators are being rewarded for flipping houses in a manner similar to buying and selling stocks.  The end result is people are being pushed from their houses by high property taxes.  Rather than pump money into keeping our property landscaped, mowed, repaired, and beautiful, we're paying this money, instead, to the tax man, who then - in an era of high unemployment, loss of high paying construction/manufacturing jobs, and two people working as hard as they can to keep their heads above water and provide for their family - has the moxie to complain that our property is being maintained according to their standard. 

When I was a kid, being a property owner meant you had prestige and considerable lattitude to do with your property what you wished, now we have to go hat in hand to boards, both elected and non-elected, to get permission to cut down a tree dying from fire blight.  With ownership being such a hassle, maybe we'd be better off all live in government housing.  Of course, where would the tax money come from to build all of those government units? 

Taylor B
5
Points
Taylor B 09/20/09 - 04:21 pm
0
0
Tag, that's what's up.

Tag, that's what's up. Finally, someone that gets it. High five!

omnomnom
3964
Points
omnomnom 09/21/09 - 06:02 am
0
0
This is bizarre.. taxes on

This is bizarre.. taxes on my house went down $200 this year, even after cleaning up the junk left on the property by previous homeowners, remodeling the entire inside, and replacing rotting vinyl siding with hardiboard... my neighbor, who has made no improvements, had his taxes go up $400, was already higher than mine to begin with.. has a smaller house AND lot.

FallingLeaves
27
Points
FallingLeaves 09/21/09 - 05:52 pm
0
0
I posted on this topic quite

I posted on this topic quite some time ago.  My mother went to a neighborhood meeting and stated that she would be willing to pay hire taxes to get better police protection.  A woman looked up at her and asked, "You will?"  and took her name and address.  You guessed it, her next tax appraisal was so high that anyone would have noticed the disparity.  She had to fight it and did the same as you, comparing nearby homes values and appraisals, for instance, but also, telling their office how they had had to battle rats that were coming from several properties away that whose backyard was completely filled with bamboo.  She was also watching the neighborhood decline because of noise,, litter and crime issues.  She said she didn't mind paying more taxes, but she shouldn't have to be paying everyone else's taxes! She said if she could get the appraised value for the house, she'd sell it and build somewhere else.  She was able to get a reasonable reduction, which was a blessing and a relief at this time in her life.  I hope this isn't happening regularly!

Taylor B
5
Points
Taylor B 09/21/09 - 08:32 pm
0
0
This is the problem

This is the problem baroness. When you surrender your will to the government in exchange for protection they cannot promise you get this result every time. The money your mother promised to pay was hers,earned fair and square right? Now the government, through force took that away. Was their any gain in police protection? I doubt it at all. So, if I pay someone to paint my car, and they paint half of it. They have taken my money by fraud. If they then pull a gun out and take my money, that is force. Either way, I have recourse from both, if the government does its intended duty. The problem is, government is not going to work everytime. Personal responsibility is key to your own livelyhood. Learning from mistakes and making good decisions can do far more for the individual than the government. As a gun owner, I do not rely on the police department to stop a home invasion. The police will most likely catch the person involved, which is great, and a credit to Mr. Strength. Meanwhile, my extended family is busy paying for plots and caskets. I choose not to be a victim. What will you choose, great people of Augusta?

ECDanes
1
Points
ECDanes 09/22/09 - 08:29 pm
0
0
the entire property tax code

the entire property tax code needs to be reformed

Taylor B
5
Points
Taylor B 09/22/09 - 08:49 pm
0
0
ecdanes, how would you do

ecdanes, how would you do it? I agree the system needs an overhaul, but personally, I wouldn't know what would help. Any suggestions?

Brad Owens
4119
Points
Brad Owens 09/23/09 - 01:17 pm
0
0
Why doesn't the County tax

Why doesn't the County tax the Mall owners on the list price? Or will they just continue to get a free ride while dragging down what is one of the most busy cross roads in the city? Again, big shot dvelopers looking out for their own, can't blame them but yet we do nothing.

ECDanes
1
Points
ECDanes 09/23/09 - 03:34 pm
0
0
Didn't the mall owners say

Didn't the mall owners say their property was worth $50 million? Seems to me they were getting a big break on their property taxes if they were only assessed at $16 million

Taylor B
5
Points
Taylor B 09/23/09 - 05:11 pm
0
0
City wanted to buy it at

City wanted to buy it at eight mil. Tha(s what they felt it was worth. The owners said 50 to get the city off their back. The city raised tax assessment to get them to sell or develop. If you think that's proper use of government power, your the problem, not the solution. I can't put it any simpler than that.

ECDanes
1
Points
ECDanes 09/24/09 - 01:35 am
0
0
you've given a great example

you've given a great example of why most ppl don't vote libertarian. The thing is.. my property assesment went up..yet theirs went down.. pls explain to all of us how that makes any sense. They have done NOTHING to minimally maintain that property and it adversely affects everyone else who owns property in that area. So if thy\ey say it is worth $50 million then tax it at what they say it is worth. They want to have their cake and eat it too... not fair.

Taylor B
5
Points
Taylor B 09/24/09 - 06:53 am
0
0
You just don't get it.

You just don't get it.

Taylor B
5
Points
Taylor B 09/24/09 - 07:09 am
0
0
The point I am making is

The point I am making is that I agree with you that your taxes should not have gone up. I also agree the taxes at the mall should not have gone up. Assessments are the only way to raise your taxes right now. Columbia county does the same thing. They assessed at the peak of the market, now they refuse to drop values, even though the market has obviously fallen. The fact is, the Gordon hwy area has been dying for the past ten years. who in their right mind would take a gamble on developing that large property right now? My employer moved their entire operation from Gordon hwy to washington Road over five years ago at the cost of millions because he saw the growth of Columbia county. It saddens me to see what Gordon hwy has become. I believe if government worked with businesses and heavy industry, it could be turned around.

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