January 31, 2015 Tax Assessor Meeting Report

On Saturday, January 31, 2015, about 20 Pine Lake residents came to hear Calvin Hicks, DeKalb County’s Chief Appraiser, accompanied by Deputy Appraiser Donna Rosser and Alberta Lumpkin who supervises this area. Mr. Hicks was given the questions that were submitted in advance, as well as taking questions from the audience. In the interests of clarity and length, the various answers have been incorporated throughout this report, prepared by Mayor Kathie deNobriga.

 

Mr. Hicks distributed two packets of information, both available at City Hall for perusal. One is a “Property Appraisal 101” packet, with general information about the appraiser’s office and how it operates. The other packet is more specific to Pine Lake, with a parcel map, summaries of tax data from 2010-2014, and copies of web pages from http://taxcommissioner.dekalbcountyga.gov.

 

The Basics

The Board of Assessors is an independent body whose sole task is to insure that property assessments are fair. The assessed value is driven by sales values —what someone would reasonably expect to pay for a property. If you feel that “I can’t sell my property for that (the assessment),” you can appeal. This can be done on-line.

 

The assessed value of property is influenced by physical aspects, improvements, age, design: what you would be looking for if you were buying property (location, amenities, condition, etc). The Assessors attempt to mimic the decisions that the typical purchaser would make. “Sales are the life-blood, the best replication of market value.”

 

Taxes are figured on 40% of the assessed fair market value, minus exemptions (City homestead of $4,000, plus possible other state, county or school exemptions). This net assessment equals your tax liability. Pine Lake has a 80% residential tax base, with only 35 commercial assets. That puts the burden disproportionately on residents.

 

Tools

The county’s web site has an interactive map. You can access data about property value by owner’s name, address or parcel ID. The site has aerial photographs (from two angles: 45° and straight down), dimensions, zoning layers and more. Information comes from various realtor sites (MLS and others) that capture market data. Zillow.com also has lots easy-to-access 3rd-party data, and it’s free. Tip: Pine Lake is reported as part of Stone Mountain, because our sales aren’t numerous enough.

 

The Market

Values in Pine Lake declined from $21.8 million in 2010 to $15.3 million in 2014. Pine Lake was not unique: DeKalb County lost $6 billion between 2009 and 2013. 40% of Stone Mountain property values are under water. The impact has been felt state-wide, but values are starting to come back. Declining values in PL were worse than some other areas: from Decatur south, there was more impact due to foreclosures.

 

Banks view foreclosures as a drain on their bottom line; the amount of money they can borrow from the Feds is negatively impacted by the number of foreclosures on their books. Thus there is an incentive on the banks’ part to get rid of properties as soon as they can – they’re not necessarily interested in fair market value and can sell for pennies on the dollar. Legislation requires the appraiser’s office to include short, distressed, and/or foreclosed sales as evidence of market value. This has pulled assessments down, because the assessors are required to pin their assessment to the median of the range. (There is an active effort to repeal this legislation.)

 

Do empty, abandoned homes affect the surrounding houses’ value? Hicks reported that they can definitely impact your value, because you also buy for a house’s amenities: location, school district, city services, etc. People also buy property where others are like-minded, with stable, well-maintained, owner-occupied homes. This all has an impact on value. You can build a $2M house in a blighted area, and it won’t sell for #2M. Cost does not necessarily equal value.”

 A potential home owner generally gets an independent appraisal (costing about $500), based on three comparables. The County’s tax appraisal process does NOT compare three houses. Their budget is only $20 per parcel, so they use a mass appraisal approach. DeKalb is In the process of developing a market module which will yield assessments even closer to market value. Some sales will be above, and some below the market value, so DeKalb County looks for the median. By law, the fair market value cannot exceed a sale price for the year following a sale.

 

The “Two-Tier” System

Many questions were received about the purported “two-tier” system. Hicks said that there really isn’t such a thing – what there is, is an effort to segregate houses into two clusters of a similar nature, based on age. There are 2 LEAs (Land Economic Area) in Pine Lake so that the assessor can look at property characteristics and physical conditions, including level of depreciation. Many residents feel having two LEAs is unfair, because older homes are in the majority, driving up the millage rate. Hicks offered to review the practice of using two LEAs in Pine Lake in an effort to arrive at a higher level of uniformity of values within the city.

 

Recent Activity in Pine Lake

The Appraiser’s office is finishing a review of Pine Lake: every property in Pine Lake has been physically visited. (The assessors have the legal right to be on a property to examine the exterior, but not the interior.) Hicks said “we want to make sure conditions that we were basing our valuations on are accurate.” Have there been renovations, additions, modernizing? All these can yield a higher value. Some properties will increase in value, others will decrease. Properties have life-cycles (as families have life-cycles) that might result in deferred maintenance. The updated property characteristics are now being keyed into the county’s data base. Assessments, based on this new information, will go out in May. This process will have no impact on current appeals, where the value will hold for 3 years, provided no changes are made to the property in 2014 or after.

 

This comprehensive review of Pine Lake homes was initiated at Hicks’ direction, as it is his responsibility to make sure assessments are accurate. For the past two years, there was a communication lapse between Pine Lake and DeKalb County: DeKalb didn’t realize that permits were now being issued by the City, and thus didn’t get updated data. This has been addressed with the recent visits and with new administrative protocols.

 

A question about rental properties received this clarification: Most owner-occupied homes receive a homestead exemption (but when someone moves out of the county and starts to rent out their home, it can be hard to catch). A change of address triggers change of Homestead status, but there are exceptions if you work elsewhere (i.e., if you still vote in the area, have a registered vehicle), etc. Rental properties are usually assessed using an income method, so it’s important to inform the tax office when owner-occupied houses become rentals.

 

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