Jan 25, 2019 - News

Charlotte gets sticker shock as new property values go online

neighborhood-in-charlotte

neighborhood-in-charlotte

Charlotte homeowners have been bracing for big increases in the tax value of their properties. But as the actual figures trickle out this week, a lot of folks are still feeling sticker shock.

Tens of thousands of people visited Mecklenburg County’s property website on Thursday to check in on their valuations, slowing the system down to a crawl. And hundreds are already lining up to appeal the county’s valuation decision.

“My phone hasn’t stopped ringing,” said Lawrence Shaheen, an attorney with Carolina Revaluation Services, a firm recently established to help people appeal their property valuations.

Why this is happening now

For the first time in eight years, Mecklenburg County has systematically put a price tag on every property within its borders. This value is used to calculate property tax paid to the city and county government.

Homeowners in the city of Charlotte pay $1.31 for every $100 of assessed value — or about $5,240 for a $400,000 home.

[Get a full breakdown of the property tax revaluation in this Agenda story]

State law requires counties to reassess their properties at least every eight years. The last revaluation in Mecklenburg County was in 2011.

A lot has happened since then. Charlotte’s real estate market has boomed out of its Great Recession slump, and some 70 new people are moving in every day.

Over the past 18 months, tax assessors have scoured neighborhoods countywide, evaluating properties and comparing recent sales while taking into account square footage, the number of bedrooms, and improvements.

The county tax assessor’s office warned the Board of Commissioners that residential property increases would average more than 40%. But that’s an average, not an across-the-board rule.

“They’re prepared for folks to be somewhat shocked,” said Scott Pridemore, founder and broker at Pridemore Properties.

How to check your property’s value

If you haven’t looked up the value of your property yet, it’s pretty easy to do so. Just go to the Mecklenburg County’s property records website and enter your address.

With the volume of people checking the site this week, the system can be slow and throw up error messages. Just keep trying — it will work soon enough.

Alternately, you could wait for your paper notification to come in the mail. Those letters went in the mail Wednesday, so they should start showing up over the weekend.

Who got hit the hardest?

As you might have predicted, neighborhoods in and around the Center City saw dramatic increases.

Property values in Fourth Ward were up as much as 150% or more. The Alexander Michael’s restaurant building, for example, went from $219,000 to $550,000.

On NoDa’s Alexander Street, home values were regularly up 115%. On Wesley Heights Way, property values were up 110% or more. Cherry, Dilworth, Belmont and other neighborhoods were a similar story.

But other, more surprising, areas of Mecklenburg County were hit with sizable jumps as well. “Starter homes” in suburban areas like Matthews, Mint Hill, Huntersville and Cornelius that were previously valued at $100,000 to $250,000 are now valued at $200,000 to $500,000.

Property value increases applied to apartment buildings as well, and will ultimately trickle down to renters in the form of increased rents. The tax value of the Spectrum South End apartments on Hawkins Street went from $35 million to $56 million.

Businesses were even more affected.

The average commercial property value was up 78%. But many businesses, particularly in industrial areas, were much, much higher.

The Siemens headquarters on Westinghouse Boulevard, for example, went from $28.5 million to a whopping $164.6 million. That’s a nearly six-fold increase.

These companies have teams of attorneys ready to appeal. Their new values will touch of a lengthy process that will ultimately wind up in the government center.

The businesses that are perhaps most affected are the small ones.

Brawley’s Beverage in Montford Park’s building valuation was up 40%. The building that’s home to the new Pasta and Provisions on South Mint Street was up 174% to $625,700.

And the building that holds Owen’s Bagels on South Boulevard was up 113% to more than $7 million.

“The new tax valuations are going to wreak havoc on small business owners throughout the city,” said commercial real estate broker and former City Councilman Kenny Smith, on Twitter. That’s because most commercial leases pass through the cost of property tax to the tenants. So even if the businesses don’t own the property, they’ll be paying on it. “Mom and pop retail tenants are about to be put at a further disadvantage.”

So was the revaluation unfair?

Not necessarily. In many cases, the massive valuation increases are warranted by the state of the real estate market.

“I’m seeing a lot of values that are right where they should be,” Shaheen said. “It depends on where you live and your particular house.”

Pridemore said that the county tax assessor’s office brought in a consultant and refined their process to do a better job than they did in 2011.

“Generally speaking, they’re coming in at fairly accurate rates,” Pridemore said.

How to tell if your value is too high

While many values might be right or close to right, that doesn’t mean they’re all correct.

The county did not look at every single property in the county. In many cases, they used formulas to extrapolate real estate data and create a valuation. And the most recent sales might not be the best comparisons to your property’s value.

“These appraisers are not going around and looking in people’s windows, so there is room for error,” Pridemore said. “If there’s sticker shock, maybe they didn’t get it right.”

The easiest way to get an idea is available right on the Mecklenburg County real estate website. When you pull up your property, you can click a button called “Comper” to see the comparable sales the county used to determine your value.

Yes, that’s the Duke Mansion.

What can you do if you feel your value is too high?

If you believe your valuation is still too high, you can appeal.

You can submit your property for an informal review within 30 days. The form is available online when you view your property on the county website, under the link that reads “Notice of 2019 Real Estate Assessed Value.” Here’s what the county will ask for.

The informal appeals process is easy enough for a homeowner to navigate themselves.

But when it comes to the formal appeal at the Board of Equalization and Review, it might be worth it to hire an attorney. The board is officially a trial court, and follows trial procedures and rules of evidence.

Real estate industry experts said the process is a good one, and usually yields the correct result. But homeowners have to take the initiative to challenge their valuation.

“Trust the process, and work the process,” Shaheen said.

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