Post in 2008 assessments

Mar 11 13:45 UTC

For a long time, it was a given throughout the metro that tax values bore no
relation to market values.  I bought my first house in 1998 in St Paul, well
before the biggest part of our recent run up took hold, and the taxable
value was 29% less than the price I paid for the house.  Two years later I
sold the house for 70% more than I paid for it, and the taxable value had
only risen less than 10%, plus it was capped annually in the increase amount
through the same process Eli referenced whereby his property is still not
fully assessed for taxes at its determined market value.

It seems just within the last 3-4 years that cities, including Minneapolis,
have really agressively tried to bring assessed values up closer to where
the market has been.  Now, when the market starts to stall and in some areas
even seemingly free fall, these cities face the dilemna of how to handle
assessments.  I was very interested to see how this would be handled by
Minneapolis, and it appears that they are trying to react, which is good.
If the assessed values in at least some neighborhoods did not go down at
least some, it would be anticipated that the city would then have to deal
with a large number of formal objections and create a lot more work and
people hours.  I give them credit for trying to get ahead of the curve to at
least some degree.  Also, I noticed there was a meeting time of some sort on
the notice for residents to attend and hear an explanation of the valuations
in general, as well as to speak individually with assessor's staff about
their values if desired.  Hopefully that can answer some questions and
streamline the process of questioning values for both residents and city
staff.

I would expect that different neighborhoods would receive different
valuation changes.  My home in Hawthorne, less than 5 years old, has always
been fully taxed at its assessed market value, not being subject to the
limited market value that residents of older housing stock throughout the
city have enjoyed to at least somewhat cushion their increases.  Now, my
home has dramatically fallen in value.  There is an identical GMHC built
home of roughly the same age as mine in the next block now on the market for
$95,000, or roughly half the market value of mine.  It needs seome serious
cosmetics, but it still has its copper and mechanical systems intact.
Hawthorne has the highest concentration of boarded homes of any city
neighborhood, and boarded homes draw down neighborhood value faster than
just about anything else.  My friends in Linden Hills, and also Bancroft,
 don't face the same level of challenges to their values, and I would
frankly be outraged if they saw the same level of decreases to their
property values as my neighbors and I.  It may also be the case with some
properties that their full market values (which as an aside may not yet be
fully reached for taxable amounts either) had not yet risen to where the
market truly was, and thus they aren't starting from the same peak level.
For this year my  home was fully taxed at its assessed value which
represented a price almost $10,000 more than was paid for it previously at
the peak of the market, while similar homes are listed (and not selling) at
a fraction of that value, including the one mentioned at less than 50% of my
current year market value.

Regardless of individual assessed values, the city still needs the same or
more revenue.  If the tax base is smaller, it seems to figure that taxes
will probably have to go up to compensate.  Thus, any decrease in value
doesn't hold any promise of a decrease in taxes.

Anissa Hollingshead
Hawthorne