Tax assessors across Atlanta’s five core urban counties say homes and businesses lost almost $5 billion in real estate value last year due to the continuing recession.
That’s right, billion.
Still, property owners in Clayton, Cobb, DeKalb, Fulton and Gwinnett counties are complaining that assessors haven’t gone nearly far enough to account for a real estate slump that has houses in some communities for sale at less than the price of a decent used car.
R.J. Morris, an investor in rental real estate, said assessors dropped the tax value on a rental home he bought last year in East Point from $137,800 to $107,000 — a 22 percent decline. However, he paid just $5,000 for the house in late 2008.
“It’s obvious all they did was say they are going to take [some random percentage] off,” Morris said. “In 2008, that’s when we really drove off the cliff. It was definitive. There is no way you can say values didn’t go down. Anything south of I-20, values have just been destroyed.”
The losses are being recorded now as assessors prepare their tax digests and submit values to the state and local governments that will use them to collect 2009 taxes. Assessors in the five urban counties have or will send about 350,000 notices lowering taxable values for 2009.
And when values fall, governments struggle unless they raise tax rates to compensate. Numerous school systems, cities and counties across metro Atlanta have been debating tax increases and service cuts over the past several months. Tax digests also give a glimpse into the state of the economy, real estate markets and development.
They catalog changes in value, new construction, expansion and property divisions.
For example, in 2008 the same five counties counted a nearly $23 billion increase in real estate values even thought it was a down year. So, for assessors, any kind of drop in value is a dramatic change.
“In my 30 years assessing in Georgia, this is the first time I’ve seen anybody’s digest go down,” said Steve Pruitt, chief appraiser for Gwinnett. “The market has always been flat or increasing. We’ve not ever seen an appreciable devaluation. This is the first really mass effect I’ve seen.”
The greatest drop by percentage is in Clayton, where assessors reported real estate values fell by $1.2 billion, or 6 percent. The greatest dollar drop came in DeKalb, where assessors cut $2 billion in taxable value from the county’s digest.
And, even though Clayton cut properties by the greatest proportional amount by far, the county still got slammed with nearly 6,000 appeals from property owners who say it should have done more.
Rodney McDaniel, Clayton’s chief appraiser, said the appeals are the greatest number he can remember getting, even with his county’s aggressive efforts to lower values.
“We got hammered,” McDaniel said. “I’m not going to lie. I thought we were pretty fair. Naturally, not everyone’s going to agree with us.”
Cobb and Fulton both reported drops of about 1 percent in real estate values. However, chief appraisers in both counties said large drops in residential values were offset by increases in commercial values, new construction, additions and property divisions.
Burt Manning, Fulton’s chief appraiser, said Fulton has sent or will send about 130,000 notices to residential property owners that will lower values by a total of $2.75 billion, an average of about 12 percent.
The digest, he said, also had about $600 million in losses among some commercial properties.
However, he said, there was about $3 billion in growth from other parcels, netting Fulton a $300 million loss.
“I’m surprised by how much new parcels and new growth we added,” Manning said.
The biggest controversies over assessments so far have been in Cobb and DeKalb.
In Cobb, legislators sent a letter of protest to the Department of Revenue complaining that thousands of taxpayers will pay more than they should in property taxes because assessors there are lowering only about 20,000 or 30,000 parcels, the fewest in metro Atlanta.
DeKalb actually sent two rounds of notices after admitting the first lowered only a handful of values because assessors failed to count foreclosures and distressed sales even though state law required them to do that.
The new round of notices, sent in May, lowered five times as many properties but still didn’t stop the county from being sued.
And the county racked up more than 8,300 appeals for an appeal period that ended Friday.
John Woodham, the lawyer who filed the lawsuit, said he suspects DeKalb’s 3 percent drop would be much greater but assessors were reluctant to cut appraised values as low as bank-owned sales dictate.
He said there are dozens of neighborhoods where houses are priced in the range of $20,000 to $30,000, but tax appraisals average three times as much even after being lowered this year.
“You can’t just take last year’s overly inflated number and hack off 20 percent,” he said. “That’s not statutory. They are required to get to fair market value.”
Labels: Atlanta, clayton county, dekalb county, Fulton, Gwinnett, property values, take a hit
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Brian Vanderhoff @ 9:22 AM
