Tarrant County property values see ‘healthy’ increase
05/31/2013 6:55 AM
05/31/2013 8:37 AM
After two years of modest gains, Tarrant County property values are up 4.3 percent, or about $5.4 billion, from a year ago, according to preliminary data.
About $1.9 billion of the county’s growth in taxable value came from construction. Nearly 8,000 new homes added about $1.1 billion to the net taxable value, and 613 new commercial properties added $852 million, according to a report prepared by the Tarrant Appraisal District.
“I’d call it a healthy rate” of increase, Chief Appraiser Jeff Law said. “The markets are improving in Tarrant County. We saw increases in both our residential sectors and our commercial sectors.”
The rest of the increase came from higher taxable values assessed on existing properties.
“When I talk to real estate agents, I am starting to hear that people are buying homes again. We are seeing values go up a little bit there,” Law said. “Retail is starting to rebound. We are starting to see shopping centers lease up. Some of our warehouse sector has done well.”
Tyler Trahant, managing director of CASE Commercial Real Estate Partners and president of the Fort Worth Society of Commercial Realtors, said the commercial market is active right now.
Some properties are priced high, though, because interest rates are low and some sellers want to recoup the high prices they paid in a market peak a few years ago, Trahant said.
Buyers are waiting for more realistic asking prices, he said.
“A lot of brokers seem to be busy right now,” Trahant said. “The economy is improving here, but they’re still cautious about where things are headed. We’re not out of it yet.”
Most Tarrant County cities and school districts saw gains.
The largest cities, including Fort Worth, Arlington, North Richland Hills and Mansfield, saw increases of 4.4 to 6 percent. A few of the smaller entities, including Haslet and Everman, lost taxable value, according to the preliminary report.
Because of a reduction in natural gas prices and gas well production, Law said, mineral values declined by about 30 percent.
Net taxable values for each taxing entity are likely to be adjusted in coming months after property owners appeal their valuations.
In July, the appraisal district will release the certified tax rolls, which entities use to set their budgets for the upcoming fiscal year.
‘Nice steady slow growth’
Tarrant County values fell for the first time in more than a decade in 2010 and have been slowly recovering.
The county saw modest 1 percent growth in the 2011 preliminary data, followed by a 2.5 percent increase last year — a gain of about $3 billion.
This year, the county’s taxable property value rose from $125.7 billion to $131 billion, according to the preliminary report.
“I think if you have nice steady slow growth, you have a tendency to maintain that nice steady growth,” Law said.
Fort Worth’s net taxable value is up 4.4 percent, but the city expects that number to shrink to about 3 percent once the final roll comes out in July, figuring in exemptions, protests and other adjustments, said Jay Chapa, the city’s acting financial management services director.
“There’s usually some kind of shrinkage,” he said.
A 3 percent increase in net taxable value would equate to an $11.4 million increase in tax revenue, Chapa said.
The city’s budget office has projected a shortfall of up to $50 million going into the 2013-14 budget review this summer, so the extra tax revenue won’t fill the gap, Chapa said.
“It clearly helps, but it’s not going to be enough,” he said.
Though up 5.3 percent now, Arlington’s net taxable value is expected to be only about 3.5 percent higher when the certified tax rolls are released, Budget Manager Mike Finley said.
“It’s slightly better than what we expected,” Finley said.
He said the city had forecast a 3 percent increase in property tax revenue for the upcoming fiscal year.
“It doesn’t alter any of our projections,” he said. “It’s a good, solid number.”
Arlington’s residential values are up 1.5 percent while the commercial tax base is up 5.2 percent, Finley said. The city is not projecting a revenue shortfall as it begins work on its $200 million general fund budget for the next fiscal year.
Mansfield enjoyed a 5.1 percent boost, increasing by $220.4 million to $4.53 billion.
More than half of Mansfield’s increase — $132.7 million — resulted from new construction, with $88 million from commercial development, Finance Directer Peter Phillis said.
“It’s a significant increase from what we were anticipating,” Phillis said.
He expects the bump to be trimmed to about 4.5 percent, meaning a net gain in real budget dollars of up to $1.3 million for next year. The current general operating budget is $38.4 million.
“It’s too early to count our blessings now,” City Manager Clayton Chandler said. “There’s no problem finding something to do with” the extra revenue.
Westworth Village property values jumped 14.2 percent this year.
City Administrator Roger Unger said the primary reason is construction, particularly a subdivision with 20 homes that was almost completed in 2012, as well as new homes in Westworth Park. Also, property that was tax-exempt was put back on the tax rolls after it was sold, he said.
Property values are up in Keller, increasing to $4.29 billion, a gain of 4.2 percent.
City Manager Steve Polasek attributes the increase to construction and a rebound in home values.
“We expected there would be some increase, but we are cautiously optimistic, like everybody else,” Polasek said. “Trends are not easy to predict at this point.”
Unlike last year, when Roanoke was down by 8.3 percent and Westlake by 2.1 percent, both saw gains this year.
Westlake values are up from $880 million to $906 million, a gain of 2.9 percent. Roanoke, which is mostly in Denton County, saw its Tarrant County values rise by 2.3 percent.
In contrast, Haslet experienced a 15 percent drop in property value.
Mayor Bob Golden said much of the decrease is due to a loss of mineral lease value.
“But we are already starting to see a renewed activity in gas well permitting,” Golden said. “We are confident these particular values will make a comeback and probably before the end of the year when the final tax rolls are out.”
Local school districts, which had fretted about state funding, were happy to see property values rise.
Cindy Powell, the Arlington school district’s chief financial officer said property tax income is “better” than last year and, coupled with an increase in state funding courtesy of the Legislature, it’s “much better.”
The May preliminary values show a 7.2 percent increase from last year’s certified July values. While Powell expects that figure to decline once the values are certified, the district should still see a 4 percent gain over last year. The district now projects an overall $5 million budget surplus.
The Fort Worth school district’s property values went up 4.2 percent to $28.81 billion. School officials were not available to comment on the increase.
The Mansfield school district saw its tax base grow to $9.31 billion, an increase of $332.23 million, or 3.7 percent.
The Keller school district showed a 6.6 percent increase in preliminary net tax values, from about $11.4 billion to $12.16 billion.
Deputy Superintendent Mark Youngs said the increase will likely be offset by a slight reduction in state revenue for daily operations, but “it absolutely does help on the debt side.” An increase in property values can help retire bonds sooner.
The Northwest school district’s figures — down 4.3 percent from $4.6 billion to $4.4 billion — may look worrisome on the surface.
But Jon Graswich, the chief financial officer, doesn’t look at it that way. The expansive district spreads into Denton and Wise counties, and its total value when factoring in all three counties is up by 1.54 percent.
“ “When you look at the total picture, we’re actually up at this point,” he said.
Until recent years, Northwest’s tax roll was showing huge gains each year.
The growth flattened out and even declined slightly last year as the district’s property income moved from a heavy reliance on oil and gas to an increased emphasis on commercial property and homes.
“We anticipate growth resuming overall in 2013-14 and for sure by 2014-15,” Graswich said.
Staff writers Sandra Baker, Elizabeth Campbell, Robert Cadwallader, Sandra Engelland, Shirley Jinkins, Alice Murray, Susan McFarland and Scott Nishimura contributed to this report, which includes material from the Star-Telegram archives.
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