Wednesday, January 4, 2012

City’s overall assessments fall for the first time ever

Shawver and Merchant discuss impact on FY2013 budget.

Director of finance Ann Shawver said it could have been worse. “Unfortunately we have one of the more disappointing reports this year.“ It was still much better then she had feared earlier.

Existing residential property decreased 2.7%. Including some positive reassessment of commercial properties the decline was 1.6%. New construction added slightly more to revenue at .41% further lessening the overall impact but still a negative 1.19%. The effect on revenue loss comes to over $1 million.

The Code of Virginia requires that all real property be assessed for taxation at 100% of market value. Keeping valuations just under 100% allows for leeway. In 2011 Roanoke City’s assessments pushed 100%. In 2010 it was at a safe 92%. “It tells me we will need to do something,” said director of real estate valuation Susan Lower.

Real estate assessments peaked in fiscal years 2006-2007 and have dropped each year since.

Lower said 46,000 properties are assessed every year and 11,000 are visited “door to door.” No notices are sent out to properties whose assessment did not change. On Tuesday 18,400 notices were mailed equating to about half the city this year. The last mass mailing occurred in 2008 when home prices were at their peak. 

Property owners receiving notices will see a change in their real estate taxes after July 1. The areas where assessments remained unchanged included Grandin Court, Raleigh Court, Wasena, South Roanoke, Windsor Hills, Old Southwest, and Jefferson Hills.

Low sales and listing prices in other areas contributed to lower assessments. Volume data was scarce – sales were down 29% for 2011. However, the median sale price has remained unchanged at $133,000 showing stability.

Twenty homes that sold for over $300,000 and one that sold for $1.2 million helped increase the average selling price by 20% this year.

Commercial sales volume was down 7.1% with only 26 valid sales. Commercial ssessments increased slightly at .7%. The lack of data made assessments difficult.

On the positive side new construction added to the tax base: Kohls, American Tire Warehouse, Health Department relocation to Williamson Rd., Longhorn Steakhouse at Valley View, Popeye’s Chicken on Melrose, Trane/Newbern Warehouse, Dollar General, United Heath Care Renovations, and CVS on Plantation.

Rehabilitation of River House, Lofts at West Station, Lofts at Sixteen West and Fitness Center, Community High School, and the Chemsolve renovations also boosted the tax base.

Multi-family properties remained unchanged.

Hardest hit areas were those with the most foreclosures. These areas included Northwest and a stretch from Southeast up to Hershberger Road.

Council member Anita Price remarked that there was a need to “evaluate what’s going on in those areas” and what assistance might be needed. Lower said the most popular assistance was going to the large number of elderly in the city through tax freezes. Veteran assistance is also available.

Shawver explained to council that foreclosures put downward pressure on adjacent property values. “It makes a buyers market and depresses other home values near the foreclosures – it’s a supply and demand issue too,” she said.

Property owner appeals can be submitted now through January 31. Appeals last year were 74 compared to 2008 that produced 230 appeals during the housing boom. Lower’s office is bracing for a possible influx of appeals considering the shear volume of notices being mailed.

Forms are available online and at the Municipal Building in Lowers office on the second floor by the elevators.

Shawver advised citizens to “hang on” through these rocky real estate times. She said she realizes it is a double-edged sword – reduced real estate tax versus loss of home value.

Increase in sales tax, meals tax and occupancy tax make up the difference in the real estate revenue shortfall. Though it is a little early to predict the fiscal year 2013 budget it should come in even with FY 2012.

Posted By Valerie Garner

Categories: Finance, Politics, Roanoke City Politics

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