Plans for More Equitable Revaluations - TribPapers

Plans for More Equitable Revaluations

Without consulting MLS data, sales ratios in the county would run around 80% and favor wealthy homeowners. Screenshot.

Asheville – Buncombe County Tax Assessor Keith Miller reminded the commissioners and members of the public that, after the 2021 reappraisal, the county formed an ad hoc committee to generate ideas for improving the process. A few weeks ago, the recommendations of the committee were presented to the commissioners, where dissenting opinions from Urban3 were only allowed during public comment. The Tribune followed up with those speakers for elaboration on their side of the story, but when the county was approached for its rebuttal, the Tribune was told the official response would be forthcoming at a later commissioners’ meeting. This was the long-awaited meeting.

Using MLS data, the sales ratios are nearly 99% for everyone. Screenshot.
Using MLS data, the sales ratios are nearly 99% for everyone. Screenshot.

Miller said the committee had recommended increasing education and outreach, expanding the assessment department, developing policies for collecting more of what is fairly due, and improving compliance with permitting. Staff, by way of comparison, only recommended increasing education and outreach and improving the quality of data used in the revaluations. Miller added that a lot of concerns had been raised about equity in tax valuations. Equity, he said, would not show up as a specific recommendation, but it is now permeating every single thing his office does. A single approach to equity, he said, would be inadequate.

Ideas for education and outreach included holding community meetings, sending out newsletters, conducting a print and social media campaign, and reaching out to people on the street. The total estimated cost would be $100,000. Other ideas included having the Land of Sky Realtors Association conduct clinics to teach people how to appeal their assessments. Depending on the response to the clinics, the county might also decide to have one or more staff members act as community tax ambassadors.

To improve the data used in tax assessments, the ad hoc committee recommended reviewing all multiple listing service (MLS) listings instead of only those for closed transactions. Real estate agents would be trained to update a property’s attributes with the tax office before listing it. Also, in December, the county will send a letter to all residents asking them to report any home improvements not yet filed. The estimated cost of these actions would be, with escalators, $50,000 annually plus $90,000 for salaries and benefits for an additional fulltime employee.

Asked for clarification by the commissioners, Miller said each person is required to report to the assessor any substantial improvements made to their property. If they don’t, staff has the power to impose penalties. Staff will find out about unreported improvements when the home goes on the market, at which time they will be included in the assessment. What’s more, general statutes require the county to collect taxes owed retroactively on unreported improvements for either up to six years with penalties as high as 60%, or up to ten years with no penalties and interest.

Miller added the owner will find out when the county issues a notice. Often, the owner is not the person who failed to report the improvements, as they were made by a previous owner. Taxes, however, are a lien on the property, not the owner. So, if real estate agents report improvements to the tax office, the back taxes can be paid at closing instead of surprising the new owner.

Commissioner Al Whitesides asked how frequently the tax office discovers unreported improvements, and Miller replied, “Often.” The tax office handles them at least every week. The discrepancies are found not only by reviewing MLSs; sometimes, neighbors or prior owners report them. Chair Brownie Newman said he recalled reading somewhere that about half of properties listed in MLSs have improvements not recorded with the tax office. Miller said, in Buncombe County, assessments are changed with about 60% of sales. Assessments miss so many improvements because assessors don’t walk through peoples’ homes. They are dependent on updates from the owners.

Miller then said if residents were concerned that their assessments may not be up-to-date, they can go to, pull their property cards, and click a button to report any discrepancies. Newman added this could go both ways. For example, they could find and report clerical errors resulting in overvaluations.

A long discussion then ensued about short-term rentals (STRs). Here, the bottom line was that the county did not have the authority to tax STRs differentially. STRs legitimately set up as businesses in business districts are to be taxed as businesses, and it was suggested that proceeds from those taxes could be used to support families struggling to pay taxes. The county will work harder to shut down STRs that are not in compliance with zoning and permitting requirements.

Another change underway to make assessments more accurate would be overhauling the assessor’s office’s website. Another under review is the redrawing of the boundaries of the 2,500 assessment areas in order to improve compatibility among comparables. A third strategy would be to use more artificial intelligence to reduce subjectivity.

Miller said staff did not support the recommendation to do revaluations more frequently; that is, every two to three years instead of every four years. Currently, the county only adds temporary labor to help with administration during revaluation years. Conducting more frequent reappraisals would cost $1.2 million for contracted services and photography plus $180,000 for two fulltime employees.

More out of concern for equity than revenue, the county is lobbying the state to change the qualifications for property tax exemptions. Currently, elderly persons earning no more than $31,000 may qualify, but staff has heard that the threshold is too low. Other factors might be considered as well, such as household size and number of dependents. Doing this would have no additional upfront costs for the county.

Following the presentation, Newman asked for more information about a concern shared by a lot of his constituents. That is, it had been claimed that the methods used by the county tended to over-assess modest homes and underassess expensive ones. “I don’t think that question was ever directly answered,” he said and asked, “Is it correct or not?

Miller then displayed graphs of sales ratios (a home’s assessed value divided by its selling value) vs. selling values, and they were pretty much flat. Sales ratios across the spectrum ran around 0.99. For reference, Miller showed the same graph prepared with data before assessed values were corrected for findings from MLS searches. Here, sales ratios averaged around 0.8, sloping somewhat downward for mid-range home prices. For million-dollar homes, the average sales ratio was 0.783; for $250,000 homes, it was slightly over 0.8; and for the least expensive homes in the county, which sold for about $180,000, it was around 0.845. Miller said a 3% variance was good for the industry, where numbers are always in flux. Staff will, however, always work toward improving equity.