Designer Urban3's Finding Still Being Disputed - TribPapers

Designer Urban3’s Finding Still Being Disputed

This visual from Urban3 uses "building height" to show how much taxes increased. The urban planners told the county the last assessment affected poor neighborhoods more than the wealthy ones. Screenshot from Urban3's blog.

Asheville – Over a year ago, Joe Minicozzi, an Asheville-based urban planner and principal of the national firm Urban3, presented the Buncombe County Commissioners with a data analysis showing the latest property assessments were raising taxes exorbitantly in low-income neighborhoods, like Shiloh, while holding them down in wealthy neighborhoods, like Biltmore Forest. Subsequently, the county set up an ad hoc committee to search out avoidable inequities in its methods of assessing property values, presumably in response to Minicozzi’s findings, and the committee ended up dismissing Minicozzi’s analysis.

Minicozzi came before the commissioners during public comment at their regularly-scheduled meeting on July 19 to defend the integrity of his organization and its professionals, who work in accordance with industry standards and best practices, and whom he felt had been slighted by the county. Following in the same vein were dissenting remarks made by Urban3’s Dr. Ori Baber, who served on the ad hoc committee.

Baber was self-described as a data scientist, performing an 18-county study of property tax fairness in Western North Carolina. He called the commissioners’ attention to two data points from the county’s 2021 reassessment. The first was that, of almost 2,000 properties sold, $106 million in discrepancies were identified between market values and assessed values. Secondly, of almost 4,000 assessment values appealed, another $173 million in discrepancies were identified.

Baber asked, if, in just one year, $279 million in discrepancies could be found in assessments covering just under 6% of Buncombe County properties, how reasonable would the assessments of the rest of the county’s properties be? He said the reappraisal committee didn’t know because, instead of providing the reappraisal committee with the numbers, staff supplied a report prepared by Tom Tveidt of Syneva Economics entitled, “Inquiry into Residential Property Assessment Equity: Buncombe County, NC.” Baber said, “Representatives from the International Association of Assessing Officers, the University of North Carolina School of Government, and the North Carolina Department of Revenue all agree that the report can be taken as evidence of nothing, let alone equity, in our property assessment system.”

Baber’s expressions of perplexity read more like incriminations. He thought the county should address the inequity rather than cover it up, as everybody knew who the demographics suffering the most harm were. He had two requests for the commissioners. The first was to either amend or retract in full the Syneva report, and the second was to not use the reappraisal committee as a template for future equity analyses.

Jonathan Hunter, who was also a committee member, handled the bulk of the formal presentation. Most notably, the committee wanted the county to lobby for changes to state legislation to require or allow owners of properties used as “short-term rentals, investments, and/or secondary homes” to be taxed at different rates than other residential property owners. For example, it could be argued that running an Airbnb is a commercial activity, and so the property should be taxed accordingly. Hunter did not think it would be difficult to develop language persuasive enough to get these policies enacted. Then, revenues from short-term rental taxes could be used to fund the Homeowner Grant Program, which would be modified to accept applicants with much higher incomes. 

Other recommendations included: performing revaluations every two or three years instead of every four; reducing the number of errors in assessments; leveraging social media and faith-based organizations to provide education and outreach on how assessments work; and getting real estate agents and builders to help with permitting enforcement. For its part, the county was going to develop a one-stop, online hub to connect citizens with answers to their assessment questions. Artificial intelligence was going to be deployed to make assessments less subjective. And, thirdly, all 2,500 market area groupings used for mass appraisals were going to be redrawn, rather than attacking a few at a time, as has been the practice.

Commissioner Al Whitesides reminded the presenters why they had been convened in the first place and asked if he had missed something. Hunter replied that the committee did look at inequity, and all groups who had addressed the commissioners that evening, formally or informally, had presented their findings to the committee. He explained the situation, but his words were not passing the communication barrier, so the conversation devolved into a sparring match over who had the most experience, personal years, and ancestral roots in the county until Hunter deferred to another committee member, Bobette Mays.

Mays explained that the phenomenon documented by Urban3 was due to renovations. She told a story of a house in Shiloh that had been uninhabitable until it was purchased by “Ugly Houses,” fixed up, and then flipped for $375,000. That single act raised property values for all the neighbors, and it was just part of a popular trend in real estate. By way of contrast, old-wealth homeowners in Biltmore Forest aren’t interested in overhauling their estates. The fact that renovations are disproportionately occurring in low-wealth neighborhoods is due to market forces, not a manifestation of systemic racism. And it was not anything the tax assessor was authorized to change.

Tax Assessor Keith Miller explained that the Syneva report only evaluated the county’s appraisal system. After long hours of debate, county staff and representatives from Urban3 did agree that the existing assessment model worked, so long as correct data was provided. He said some of the data Urban3 had used had been generated in 2013, and the mismatched data had led to the “unusual” results. Miller said he could provide a technical explanation of what was going on, but it would take more than the time allotted.

Chair Brownie Newman shared that it was his wish that the county not exacerbate the hardships of the county’s most vulnerable. Beyond that, he was interested in taking care of problems that could be solved immediately. For example, he knew that after the next revaluation, HCA would send in a high-powered team to negotiate the conglomerate’s tax assessment down to the absolute minimum. Meanwhile, normal people would be too busy “working” — living their lives and juggling their stuff “— to invest in rent-seeking. He was therefore in favor of simplifying interactions with the tax office and providing “more proactive support, whatever that means.”

The presentation was informational only. No vote was taken.