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Citizens group accuses county of undervaluing commercial property

Friday, July 17, 2009 by Austin Monitor

A few dozen people organized by ChangeAustin.org protested yesterday at the Travis Central Appraisal District’s offices, saying the entity undervalues commercial property appraisals. The group, born out of the Stop Domain Subsides PAC, is drawing attention to what they say are a slew of properties that have sold for amounts significantly higher than their appraisal.

 

Brian Rodgers, a founder of Change Austin, told In Fact Daily that the Appraisal District had been engaged in a “dirty little secret we all know,” that commercial property that was “routinely, systematically undervalued.” He provided a spreadsheet with 30 properties of which two-thirds were allegedly appraised at 75 percent, or less, than their sale price.

 

Chief Appraiser Patrick Brown said any undervalued appraisals were honest mistakes. “I think some of them we didn’t have the sale information on,” he said. “I wasn’t made aware of these sales until May of this year and most of the notices went out in April. Certainly any and all properties that seem to be under-appraised we’re going to take a look at and evaluate those areas next year.”

 

Brown said that each year the Appraisal District values around 380,000 parcels across the county with an appraisal staff of 45 people. He said they determine values based upon sales information. He called the process “accurate but not necessarily precise.” One impediment to more precise valuations is the lack of a state law compelling full or mandatory disclosure for commercial property sales. “We have asked for that several times and have been turned down by the Legislature,” Brown said.

 

Brown told In Fact Daily there were other factors that could contribute to the gap between a property’s sale price and its appraisal. He said the regional building boom and real estate bubble may have inflated some sale costs in prior years, and that appraisals reflect the current economic climate. Of the 30 properties on the Change Austin spreadsheet, four showed a decrease from their initial appraisal amount to the current valuation.

 

In Fact Daily supplied Brown with a parcel number and information about a property on 3944 South Ranch Road appraised at $3.7 million and which Change Austin says was sold for $11.22 million, Brown said he was out of town and unable to get into specifics until Monday.

 

He also took umbrage with Change Austin’s characterization that homeowners have an unfair burden. “Keep in mind also that homeowners enjoy a homestead exemption on their property. They also enjoy a 10 percent homestead cap on their property. Approximately 72 percent of our 250,000 residential properties have homestead exemptions on their property and nearly half of those are below the 10 percent cap.”

 

It looks as though the issue of commercial appraisals is about to get even more attention, especially with the county facing a budget shortfall. Tuesday’s Commissioner’s Court agenda includes an item labeled, “Consider and take appropriate action regarding a request to file a challenge to commercial appraisals performed by Travis Central Appraisal District or request a performance audit of the district.”

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