Reassessment Shocker

Steep increases in regional property valuations, especially in Baltimore City, have upset homeowners and led to calls for tax relief

February 04, 2007|By Jamie Smith Hopkins and Larry Carson | Jamie Smith Hopkins and Larry Carson,SUN REPORTERS

Baltimore City homeowners saw some of the region's steepest increases in the recent round of property reassessments, a stark change after years of lagging home values - and added ammunition for groups calling for tax relief.

In the city, which has the highest property tax rate in the state, nearly one in five reassessed homes saw values at least double since they were last evaluated three years ago. No other jurisdiction in the Baltimore region had such a high share, according to a Sun analysis of state records for owner-occupied homes.

The city also claims the ZIP codes with the fastest-escalating residential assessments. The average market value doubled for reassessed homes in the neighborhoods of Medfield and Hoes Heights - north of Hampden - and nearly doubled in the western half of Cross Country and Fallstaff, neighborhoods in the city's northwest corner. Some home assessments went up even more.

"I just have a plain little stone rancher, nothing fancy or anything," said Mary Conaway, a Cross Country resident who bought her home 11 years ago and couldn't believe her new assessment: nearly $550,000, up from about $200,000 three years earlier.

But increases were substantial in the suburbs, too. Average assessments rose at least 40 percent in every reassessed ZIP code, even ones heavy with million-dollar homes. Across the region, the gain in assessed values outpaced the rise in sale prices over the same period.

Many homeowners won't feel the full impact for years because increases are capped for all except the newest owner-occupants. But some are enraged by the new values all the same, convinced that the assessments are higher than the amounts they could possibly sell their homes for. This assessment cycle, which takes in about a third of each jurisdiction, is the first to straddle both the housing boom and the more recent slump.

"It'll be a cold day in hell the day someone gets $900,000 for a home in this neighborhood," said Perry Huntley, a homebuilder who judges that his waterfront house in Pasadena is overassessed at about $923,000. He said it was appraised for $100,000 less when he built it last year. He added that he believes local values have dropped since. "Everybody, everybody I've talked to, has complained about the property taxes. ... I think [state officials] are going to be inundated with appeals," he said.

They haven't been yet, though they note that people tend to wait until the last minute. The deadline to appeal is Feb. 12. Owners were notified of their new assessments in letters mailed Dec. 29.

More affordable homes tended to see the biggest increases. Baltimore County's west side, the section reassessed this time, has the lowest average home price among the reassessed suburbs - and saw the biggest jump by far, at an average of 76 percent.

"I appealed it - I was furious," said Owings Mills resident Dianne L. Stern, a real estate agent whose assessment more than doubled, to about $600,000 from roughly $275,000.

She added: "If someone wants to come and pay me $600,000 right now, they can have this house."

Baltimore County's overall increase edged out the city's, which was 73 percent. That's because the city has extremes at both ends - homes with declining values as well as the fastest-appreciating properties.

Even so, it seems a watershed moment for the city. In the past three reassessments, when home prices were still bounding rapidly upward, Baltimore's increase ranked last in the region.

City residents are gulping at this change of fortunes and taxes. Realtors and others are pressing the city to change its tax rate, lest it derail efforts to add population after years of decline.

"If you talk to people that have recently moved to Baltimore ... there's a high concern about what they're paying, because they haven't received a break," said Federal Hill resident Keith Losoya, community liaison with the Baltimore TEA Party, a nonprofit whose acronym stands for Tax Education and Action.

Strong feelings aside, the region isn't facing the tax revolts hitting some states. And the number of appeals in recent years hasn't surged the way assessments have. That's likely because tax bills aren't rising as quickly as assessments, either. Owner-occupants who have had their homes at least one full fiscal year see their annual increases capped by the Homestead Property Tax Credit - which, within the region, ranges from 2 percent to 10 percent.

New homeowners aren't so lucky. But many of them aren't paying taxes on the full assessment, because the increase is phased in over three years. Once they mark their second July 1 in the home, they're entitled to the cap.

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