On a clear day, sculptor Jennifer Walker can look out her back windows and watch sunbeams dance along the Kauffman Center’s gleaming steel curves. At night she gazes out at a downtown skyline twinkling with colored lights.
“I got a million dollar view,” she said.
Still, after nearly two decades there, she’s grown tired of city living and put her three-bedroom house in the 1600 block of Jefferson Street up for sale.
Current list price: $445,000. Not bad for a property that was valued for tax purposes at less than one fourth that only a year ago.
Until this year’s countywide reassessment, nearly all the houses on her block were grossly undervalued on Jackson County’s tax rolls, and had been for many years.
One house a couple of doors down sold for more than $300,000 in 2017, yet the county had it on the books as being worth one sixth of that.
A couple bought a house across the street for $245,000 a decade ago, but until this year it was valued by the county at $65,000, saving the owners a sizable amount of money in property taxes.
Big or small, rehabbed or in need of an update, homes on the West Side are far more expensive than back in the 1990s, when a fixer-upper might set you back $20,000 or less.
“It’s a really booming neighborhood,” says Karen Lee, the Reece Nichols real estate agent trying to sell Walker’s house. “It’s a nice community, safe, close to everything. That’s why it’s so desirable.”
Yet now suddenly, the West Side could become slightly less desirable for anyone on a tight budget. By updating the real estate values on its tax rolls, the county has ensured that homeowners there will be paying more taxes, which could price some out of their homes. For people who live on Jefferson Street, their property taxes could go up by thousands of dollars simply because for so many years their taxes were artificially low, despite decades of gentrification.
Homeowners and owners of commercial property throughout the county are complaining about this year’s reassessment, but a close look at the West Side neighborhood shows that, in many cases, the adjustments may have been long overdue.
It wasn’t uncommon to pay less than $1,000 a year in property taxes on a Jefferson Street house that would sell for a quarter million dollars today.
“Our house has been undervalued for years,” said one of Walker’s neighbors, who asked that her name not be published.
Drawn by the area’s charm, cheap real estate and proximity to downtown, newcomers began settling in the historically Hispanic area west of Interstate 35 in the late 1980s and early 1990s.
Baby boomer artists at first, then professionals with jobs downtown and now millennials. Predominantly white, the earliest newcomers bought and renovated many of the mostly century-old brick and clapboard homes that sit on narrow lots and hug the bluffs rising above the West Bottoms and the Crossroads to the east.
“People have worked very hard to restore houses from the brink of collapse,” Walker says.
New homes and condos were built where decaying buildings once stood. And yet only this year did County Executive Frank White’s assessment department try to match those market realities with the market values on which taxes are based.
And for many West Side residents who have knowingly or unknowingly been benefiting from low taxes for many years, the county’s decision to drastically bump up market values in one year rather than gradually simply seems unfair.
Not their fault
Walker and her neighbors weren’t the ones who had the values all wrong for all those years.
That was the theme when members of the West Side Neighborhood Association appeared before the county legislature recently.
“We are not at fault for that,” long-time resident Paul Rojas scolded White and the nine legislators. “If this thing has been brewing in the pot for so many years, why was it not addressed? And why in one day a notice goes out that we’re going to correct this problem by adjusting people’s taxes from an outrageous amount of increase. In my case it’s 450 percent. Tell me if that’s fair.”
Many legislators agree and are calling on White to freeze values at last year’s levels and come up with a plan that would increase assessments gradually. Short of that they urge taxpayers who’ve seen big increases countywide to file appeals and hope that local taxing districts roll back their levies enough to lessen the tax burden some.
“For years our properties have been undervalued,” legislative chairwoman Theresa Galvin said. “Unfortunately, it was sticker shock for all of us, and it’s not fair for the burden to be on the taxpayers.”
Not all taxpayers experienced steep increases. A little more than half of the county’s homeowners saw their values go up by 15 percent or less since the last reassessment in 2017.
A third got bigger bumps. Some of them much bigger in neighborhoods like the West Side and Beacon Hill, where gentrification has taken place and was not reflected in the county property records for years.
Nearly 22,000 taxpayers, accounting for more than 7 percent of all properties in the county, filed requests for informal reviews of their assessment notices as of last Monday’s cutoff. Taxpayers also have until July 8 to ask the Board of Equalization to consider lowering their market values because the assessment department made a mistake or was not privy to information that would have led the department to set a lower value.
Meantime, the assessment department is trying to correct systemic mistakes. For instance, assessment director Gail McCann Beatty believes the values were likely set too high on vacant lots where homes once stood and were later bought by a neighbor who wanted a bigger yard or set up a community garden.
“We’re looking at all vacant lots to see if we need to make some changes,” she said.
Beatty is also taking another look at certain older neighborhoods with diverse housing stock to see if values need to be adjusted downward.
The West Side is one of those.
“Give us an opportunity to review it,” she asked members of the West Side Neighborhood Association during last week’s meeting in Independence, which ended with Galvin ejecting an unidentified man because he cursed at her under his breath.
Beatty was careful to make no promises that her review of housing values on the West Side would produce a substantial decrease. She is compelled by state law, she says, to set values that reflect what houses actually sell for these days, not what they were worth in the past.
And the West Side housing market has been on the rise.
While Beatty’s staff worked on its review last week, The Star performed its own analysis of the block where Walker’s house is up for sale.
The county’s failure to reflect increases in market value for those two dozen homes in the 1600 block of Jefferson Street over the years was striking.
Houses that were listed on the tax rolls at $50,000 or less in 2018 are now worth four times that much, according to the county.
Some residents have their doubts, but the county was not all that far off from what those houses are actually worth in today’s real estate market. Loan documents and sales prices recorded by the homeowners or their lenders in the county recorder’s data base largely substantiate that.
In some cases, the county is still low-balling certain properties.
One house on Jefferson saw its market value for tax purposes rise from $154,000 last year to $227,000. It sold this month for $300,000.
In 2018, another homeowner borrowed $382,500 on a house that was then on the rolls at less than half that and is now valued for tax purposes at $324,000.
Carla Manthei lives two doors away from that house and was shocked when she got her assessment notice recently. It included an estimate of how much her taxes could conceivably increase all at once, if the current tax levies stayed the same.
“It went from $809 to $3,300,” she said. “It’s absurd!”
The assessor upped her house’s market value from $51,000 last cycle to the current $212,000. And yes, she knows she’s been getting a sweet deal tax wise for a lot of years, as she bought her four-bedroom house for $165,000 in 2005.
“Still to raise it in one fell swoop, that’s not right,” she said. “That’s not cool.”
For awhile she considered filing an appeal with the Board of Equalization, but then thought better of it, because she’s bought another house farther south and wants to sell this one for more than twice what she paid for it and far more than what the assessor says it’s worth now.
“I can’t very well fight ($212,000) and then list it at $368,000,” she said. “They might have trouble with that.”
Walker did appeal her assessment, saying the increased taxes will be tough to come up with should she be unable to sell her house.
“I haven’t gotten an offer yet,” she said.
Having lived in that house for nearly two decades, she understands the financial strain that higher tax bills will put on her neighbors, many of whom have lived their entire lives there.
“We have a lot of elderly on fixed incomes and they are being squeezed hard out of the blue,” she said. “They kept this neighborhood vital and stable for a long time.”
When you add the county’s assessment increase on top of what she considers the city’s inferior services, she said, “it seems like a slap in the face.”