Travis tax appraisers tout new techniques for assessing property values
The Travis Central Appraisal District is figuring out the values of properties faster and more accurately, all while fighting off a record number of protests and lawsuits from taxpayers challenging their appraisals, agency leaders told the Travis County Commissioners Court on Tuesday.
Lonnie Hendry, who heads the district’s commercial property division, described how the agency is now mining through immense amounts of disparate online data – found everywhere from company websites to social networks – to get a better sense of how much a property is worth.
“We’ve really changed the focus of our efforts from looking simply for sales prices to use as a method of validation for market value, and we’ve gone to what the market participants look at, which is underwriting criteria, loan-to-value ratios, appraisals done for financing, re-financing,” he said.
As a result, the agency contends that it is able to more accurately assess the values of commercial properties, which city and county leaders have long complained are taxed at a value far lower than they are actually worth on the market, partly because Texas is one of a number of states that does not require the public disclosure of sales prices for properties.
Last week, the district reported that the appraised value of county properties has increased 16 percent this year over last. Commercial values shot up 23 percent, while home values climbed 8 percent.
The increased precision the agency is touting certainly has not done away with disgruntled property owners, however. The number of people protesting their appraisals has steadily increased in recent years, hitting a record of 116,000 in 2016. The number of lawsuits has also risen dramatically, from 195 in 2012 to 703 last year.
And yet, agency leaders told the court, after boosting staff and investing in new data analysis tools, they are now able to much more quickly resolve challenges to appraisals. The agency completed all of its protests by Aug. 31 last year, earlier than ever.
More important still, the agency’s appraised values held up well against lawsuits. On average, lawsuits from commercial property owners succeeded in reducing their appraised value by 6.4 percent.
Commissioner Brigid Shea was happy to see a rise in the appraised values of commercial properties, saying that for too long homeowners “were forced to subsidize” business owners whose properties were being underappraised. More accurate appraisals of commercial properties will help reduce the substantial tax burden on residents, she said.
Similarly, Shea was pleased to learn that the district is beginning to “segment” neighborhoods based on whether the homes had been recently remodeled. Shea, who lives in Allandale, said that there was “growing resentment” among longtime residents who feel the value of their homes is being unfairly inflated due to newcomers who are spending big to remodel.
County Judge Sarah Eckhardt applauded the district’s efforts to “scrounge for data” in the absence of mandatory sales price disclosure. That the state does not require disclosure is “absurd,” she said, adding that the county will continue to press for a state law change.
In 2015, the city of Austin brought a lawsuit against the appraisal district and thousands of commercial property owners, arguing that commercial properties were being systematically undervalued, in part due to the absence of sales price disclosure. The district’s chief appraiser, Marya Crigler, supported the city on the matter. A judge threw the case out, ruling that the city lacked standing to sue on the matter.
Opponents of the sales price disclosure, notably those in the real estate business, have long argued that such information should be private and that forcing disclosure would open the door to taxes on real estate transactions. The latter argument was largely rendered moot by a state constitutional amendment approved by voters in 2015 that both raised the homestead tax exemption and prohibited real estate transaction taxes.
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Key Players & Topics In This Article
Travis Central Appraisal District: The tax appraisal district for Travis County.
Travis County Commissioners Court: The legislative body for Travis County. It includes representatives from the four Travis County Precincts, as well as the County Judge. The County Judge serves as the chair of the Court.