Some Fort Worth homeowners shocked by soaring land appraisals
05/13/2014 5:13 PM
05/13/2014 9:22 PM
When Kent Worley received his appraisal notice this year, he wondered if there had been a mistake.
The overall value of his property in Foster Park went up but the value of the land more than doubled — from $70,000 to $190,000 — while the worth of his home dropped from $224,600 to $161,500. That led to an overall increase in his appraised value from $294,600 last year to $324,060 this year.
After he searched the Tarrant Appraisal District website and talked to some of his neighbors, Worley realized he wasn’t alone —the same thing was happening to most of his neighbors.
“I live on a short street,” Worley said. “It didn’t take me that long to check it out and then I started talking to my neighbors and asking them if they had looked at their TAD appraisal and they would go ‘Yeah, what’s going on?’ ”
One neighbor down the street saw their appraised land value jump from $137,250 last year to $332,500 this year while the home value dropped from $332,500 to $156,400.
Worley couldn’t believe how the land and home values were flipped in his neighborhood.
“It is kind of mind-boggling when you don’t understand what is going on,” Worley said
Jeff Law, executive director and chief appraiser of the Tarrant Appraisal District, said there is a methodology to the adjustments.
“When a buyer sets out to purchase a property they usually do not look into the individual component value such as land and buildings,” Law said. “However, the Property Tax Code requires the district to enter a separate land value and building value in our computer system. This adds an element of confusion for the taxpayer. I wish we were only required to maintain the total overall property value.”
In some close-in older neighborhoods, the tear-down phenomenon is changing the way properties are valued.
TAD made similar adjustments last year in the Arlington Heights neighborhood. And this year, adjustments have been made in Overton Woods, Overton West, Overton Park, Willow Lake North and Overton Crest.
“In an attempt to ensure the total property value is correct and to safeguard the correct allocation of value (between building and land) we may increase the land value while lowering the building value,” Law said.
“We are seeing on a regular basis new owners coming into a neighborhood, buying an existing home, and tearing down the existing building with plans to build a more modern home with better functionality than the previous building on the site,” Law said. “The price they are paying does have a direct correlation to the value of the land.”
Fort Worth appraiser Randy McKechnie of RLM Consulting said he has spoken to some neighborhood associations in recent years and fielded calls this year about TAD’s adjustments in land and improvements.
McKechnie, who served on the Fort Worth Appraisal Review Board, said it is sometimes difficult for homeowners to understand how their property is appraised.
But when someone buys a property and tears down the house, it shifts the value of the property to the lot.
“If someone pays that much for the land and razes the house, then that building really has no value,” McKechnie said.
One tear-down shouldn’t be enough in a neighborhood to adjust values but if they start becoming more commonplace, it will have an impact, McKechnie said.
One other appraiser, who didn’t want to be identified, said the same issue has gone on for some time in high-end neighborhoods like Rivercrest and Westover Hills.
A failure to communicate
Before getting an explanation, Worley said he and some his neighbors were suspicious of the appraisal district’s motive.
“It seemed like something was being set up down the line,” Worley said.
But Law said the appraisal district is simply reflecting market value by collection sales data.
“Buyers and sellers establish what properties are worth,” Law said. “TAD simply collects and analyzes this information to appraises property. We do not have any long- or short-term intentions of systematically raising values. “
Worley said he was satisfied with TAD’s explanation. But the retired spokesman for the Fort Worth Fire Department has a piece of advice.
“There was a lack of communication from TAD to the affected neighborhoods regarding such a dramatic change in the appraisal values for the lots as well as the homes,” Worley said. “If you’re going to make such a dramatic change, why not communicate with the affected neighborhoods?”
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