
{"id":5003,"date":"2009-02-26T09:46:10","date_gmt":"2009-02-26T17:46:10","guid":{"rendered":"http:\/\/www.carrborocitizen.com\/main\/?p=5003"},"modified":"2009-02-26T09:46:10","modified_gmt":"2009-02-26T17:46:10","slug":"revaluations-squeeze-home-business-owners","status":"publish","type":"post","link":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/2009\/02\/26\/revaluations-squeeze-home-business-owners\/","title":{"rendered":"Revaluations squeeze home, business owners"},"content":{"rendered":"<p><em>By Rich Fowler and<br \/>\nMargot C. Lester<br \/>\nStaff Writers<\/em><\/p>\n<p>It wasn\u00e2\u20ac\u2122t that long ago that seeing a rise in your property value indicated a good return on investment. But the challenging economy has turned that mentality on its head. <\/p>\n<p>\u00e2\u20ac\u0153In our normal circumstances, people would be happy to see the value of their house go up,\u00e2\u20ac\u009d said Mark Zimmerman, owner of Re\/Max Winning Edge in Chapel Hill. But almost as soon as Orange County\u00e2\u20ac\u2122s quadrennial property tax revaluations began arriving in the mail, there\u00e2\u20ac\u2122s been an ironic hue and cry from property owners who\u00e2\u20ac\u2122ve seen their values rise dramatically.<!--more--><\/p>\n<p>\u00e2\u20ac\u0153It\u00e2\u20ac\u2122s an odd situation for people to say, \u00e2\u20ac\u02dcPlease say that my wealth hasn\u00e2\u20ac\u2122t increased as much as you say it has,\u00e2\u20ac\u2122 and that\u00e2\u20ac\u2122s because there\u00e2\u20ac\u2122s out-of-pocket consequences to it,\u00e2\u20ac\u009d he said.<\/p>\n<p>Those consequences arose primarily from two aspects of the revaluation process that produced some questionable results. <\/p>\n<p>First, sufficient market data was lacking for some areas that saw few or no sales during the revaluation period. In these cases, the assessment team uses a set of tables and formulas to make the valuation. The bulk of this year\u00e2\u20ac\u2122s issues occurred because the revaluations began two years ago, when the real estate market was up and property of all types was selling at high prices. Last August, before the local housing market really tanked, the average Orange County home sale price was $344,000. By January of this year, it had plunged to $291,000. Commercial property values also dropped over that period. <\/p>\n<p>And there\u00e2\u20ac\u2122s the rub: Many properties are now valued far higher than the market \u00e2\u20ac\u201c and owners\u00e2\u20ac\u2122 stretched wallets \u00e2\u20ac\u201c will bear. That leaves many owners wondering if their revaluations are accurate.<\/p>\n<p>\u00e2\u20ac\u0153My concern is that they\u00e2\u20ac\u2122re hitting the valuations at the peak of the market,\u00e2\u20ac\u009d says Marc Pons, owner of Chapel Hill Tire. The value of all three of his service locations increased, some dramatically. \u00e2\u20ac\u0153At this point, nobody knows what\u00e2\u20ac\u2122s going to happen. Everybody\u00e2\u20ac\u2122s suffering right now. It just doesn\u00e2\u20ac\u2122t seem like this is the right time to be doing it. \u00e2\u20ac\u0153<\/p>\n<p><strong>Mostly accurate<\/strong><\/p>\n<p>The Orange County Tax Assessor\u00e2\u20ac\u2122s office reviewed values on 53,000 properties countywide; 19,591 were residential parcels in 290 neighborhoods. One-hundred-forty-three neighborhoods consisting of 10,517 properties saw revaluations in excess of the 22 percent county average. Another 147 neighborhoods consisting of 8,782 properties were revalued below the county average.<\/p>\n<p>Zimmerman and some of his colleagues have been doing comparative market analyses for homeowners who think their reassessments were inaccurate. <\/p>\n<p>\u00e2\u20ac\u0153For people in established neighborhoods, we\u00e2\u20ac\u2122re not seeing that the reassessment numbers are off an awful lot,\u00e2\u20ac\u009d he said. But there are some exceptions. \u00e2\u20ac\u0153Where there\u00e2\u20ac\u2122s better information, they\u00e2\u20ac\u2122re getting closer; and where there\u00e2\u20ac\u2122s less information, there can be some pretty wide swings,\u00e2\u20ac\u009d he said.<\/p>\n<p>Orange County property owners have until March 31 to appeal their revaluations. So far, the assessor\u00e2\u20ac\u2122s office has received more than 1,500 requests for review.<\/p>\n<p><strong>\u00e2\u20ac\u02dcGet ready to move\u00e2\u20ac\u2122<\/strong><\/p>\n<p>Thirty years ago, Tom Rose and his wife built a house on Lakeshore Drive in Chapel Hill for less than $300,000. In January, the retired couple discovered the tax value on their home had gone up from just under $698,000 in 2005 to $1,107,000 in 2009 \u00e2\u20ac\u201d a 58 percent increase. Rose says that the value of the house only went up 20 percent, but the value of the land it sits on \u00e2\u20ac\u201c two-thirds of an acre on Eastwood Lake \u00e2\u20ac\u201c doubled from $300,000 to $600,000.<\/p>\n<p>Rose has already appealed his revaluation. \u00e2\u20ac\u0153We\u00e2\u20ac\u2122re not contesting so much the increase of the value of the house so much, but we\u00e2\u20ac\u2122re going to the mat over the land. I am planning right now on going to the next step. And if that doesn\u00e2\u20ac\u2122t work out, I\u00e2\u20ac\u2122m going to take it to Raleigh.\u00e2\u20ac\u009d <\/p>\n<p>And if he loses his appeal?<br \/>\n\u00e2\u20ac\u0153My realtor said, \u00e2\u20ac\u02dcGet ready, Tom, for something around $25,000 in taxes.\u00e2\u20ac\u2122 I\u00e2\u20ac\u2122m paying $13,500 now. So I said to my wife, \u00e2\u20ac\u02dcGet ready to move.\u00e2\u20ac\u2122 We can\u00e2\u20ac\u2122t live under those circumstances,\u00e2\u20ac\u009d Rose said. \u00e2\u20ac\u0153I\u00e2\u20ac\u2122m not saying the house didn\u00e2\u20ac\u2122t increase [in value], and that\u00e2\u20ac\u2122s wonderful. But I don\u00e2\u20ac\u2122t have the income. I\u00e2\u20ac\u2122m serious when I say I\u00e2\u20ac\u2122ll have to see what my tax bill looks like; and if it\u00e2\u20ac\u2122s more than I can handle, which is what I suspect it might be, I will have to move, and I will move out of this county.\u00e2\u20ac\u009d<\/p>\n<p><strong>Business impact<\/strong><\/p>\n<p>Pons was surprised by the increased valuations at his two Chapel Hill locations on West Franklin Street and University Mall (a third location is in Carrboro).<\/p>\n<p>\u00e2\u20ac\u0153The Franklin Street service center, which is an unimproved property, went up 84 percent. That\u00e2\u20ac\u2122s like $70 per square foot of land,\u00e2\u20ac\u009d Pons said. \u00e2\u20ac\u0153The East Franklin location went up 49 percent.\u00e2\u20ac\u009d He\u00e2\u20ac\u2122s appealing the revaluations. <\/p>\n<p>He guesses the West Franklin increase was based on one high-profile transaction. <\/p>\n<p>\u00e2\u20ac\u0153There was one sale for $70 per square foot in the area \u00e2\u20ac\u201c it was Spencer Young [owner of the Courtyard] when he was trying to find a parking lot. It was a desperate buy and now they\u00e2\u20ac\u2122re in foreclosure,\u00e2\u20ac\u009d Pons noted. \u00e2\u20ac\u0153We\u00e2\u20ac\u2122re not going to go out of business, but it certainly hurts.\u00e2\u20ac\u009d<\/p>\n<p>Julie Jennings owns Uniquities, a women\u00e2\u20ac\u2122s clothing store also on West Franklin Street, and the building it\u00e2\u20ac\u2122s located in. Its tax value was $263,700 in 2004. When reassessed in 2005, the value shot up to $480,000, an 82 percent increase. This year, the new tax value is $708,800, a 47 percent increase. Making matters worse, the assessed value of Jennings\u00e2\u20ac\u2122 home went up around 50 percent too. She plans to challenge both.<br \/>\nLike Pons, she said the increased value won\u00e2\u20ac\u2122t put her out of business, but it does put her in a squeeze. <\/p>\n<p>\u00e2\u20ac\u0153People are spending less money locally. It\u00e2\u20ac\u2122s going to be challenging,\u00e2\u20ac\u009d she said.<br \/>\nTo soothe the sting of higher valuations in a down economy, County Commissioner Mike Nelson advocates a reduction in the property tax rate.<br \/>\n\u00e2\u20ac\u0153Lowering the tax rate to be \u00e2\u20ac\u02dcrevenue neutral\u00e2\u20ac\u2122 is standard operating procedure for local governments,\u00e2\u20ac\u009d said Nelson. \u00e2\u20ac\u0153Local elected officials need to stick to our promise to adopt a lower, revenue-neutral tax rate. <\/p>\n<p>\u00e2\u20ac\u0153It\u00e2\u20ac\u2122s\u00c2\u00a0a little early to say for sure exactly what the new tax rate will be, but the county\u00e2\u20ac\u2122s current tax rate is just over 99 cents. A revenue-neutral rate might be, say, 87 cents.\u00c2\u00a0Lowering the tax rate will be good for our citizens.\u00e2\u20ac\u009d<\/p>\n<p><strong><br \/>\nEditor\u00e2\u20ac\u2122s note: <em>The Citizen<\/em> will follow the property owners in this article to see how their appeals come out.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Rich Fowler and Margot C. Lester Staff Writers It wasn\u00e2\u20ac\u2122t that long ago that seeing a rise in your property value indicated a good return on investment. But the challenging economy has turned that mentality on its head. \u00e2\u20ac\u0153In our normal circumstances, people would be happy to see the value of their house go&#8230;<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,30],"tags":[],"class_list":["post-5003","post","type-post","status-publish","format-standard","hentry","category-news","category-top-story"],"_links":{"self":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/5003","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/comments?post=5003"}],"version-history":[{"count":1,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/5003\/revisions"}],"predecessor-version":[{"id":5004,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/5003\/revisions\/5004"}],"wp:attachment":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/media?parent=5003"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/categories?post=5003"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/tags?post=5003"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}