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Runaway property tax valuations: What about imposing an annual cap?

Robyn Halvorsen

Robyn Halvorsen

I was shocked when I received my city property tax bills the year after Katrina. The assessments had suddenly jumped by approximately 800 percent.

The good news was that my properties, all of them in the Marigny/Bywater area, were certainly worth more than when I bought them decades ago — just not 800 percent more!

The bad news was that they all needed work and many stood empty. Tenants had yet to return, and with no rent coming in, I could not budget for a sudden 800-percent increase.

At the time, there were still multiple assessors, so appealing the valuations meant standing in line over several days at City Hall to see someone from the office of the assessor who handled your district — in my case, Erroll Williams, now the chief assessor since the city did away with the old district-assessor system as part of post-Katrina reforms.

In several instances, when satisfactory agreements could not be worked out at the assessor’s office, I had to appeal the valuations to the City Council or the state-level Louisiana Tax Commission. Eventually the sudden post-Katrina hike was cut in half.

Under the law, the city assessor is required to reassess properties every four years, but I have found myself getting reassessed — and having to do appeals — every single year since then. That said, I congratulate Williams on streamlining the process and making it easier to work with his office.

Since Katrina, property values in my neighborhood have nearly doubled. I’ve already lost my two favorite neighbors to soaring taxes. Like most New Orleanians, they weren’t sophisticated enough to navigate the city bureaucracy to contest valuations; now they have had to leave Orleans Parish.

Economists and urban planners are already complaining about the lack of affordable rents in New Orleans — an issue of concern to the elderly, of course, but also to  younger “hipsters” as historic neighborhoods like mine gentrify massively.

Many states have imposed an annual cap on how much your taxes can be hiked in a year. It’s sorely needed here.

If the city wants to cash in on the real estate boom, I could see exempting freshly sold properties from the cap, then re-imposing it going forward.

The cap in some states has been set at two-to-three percent, or the rate of inflation, whichever is lower — and in some localities that has turned out to be too low, choking off the flow of necessary revenues.

All right then, let’s consider a five-percent cap (more than double the current rate of inflation) or even 10 percent.

But it’s totally unfair to hit a longtime property owner with a sudden increase that doubles, triples or quadruples their property valuation — or worse. It’s also bad for the city. The Homestead Exemption is no longer much of a shield given sky-high valuations, though elderly residents get relief in the form of frozen assessments after they turn 65.

I have spoken with City Council members about a cap, but they say it’s a state issue. Williams expresses sympathy and tells me he thinks a cap would be fair but, like the Council members, says imposing one falls outside his authority.

I am not sure what the next step should be.  If changing the law can only happen at the state level, tailoring the reform to apply only to Orleans Parish will be a challenge. My hunch, though, is that taxpayers in many other parishes could be experiencing the same problem.

Government officials may not be our most aggressive allies in this fight. They can generally be counted on to find ways to spend as much tax revenue as can be raised.

So maybe imposing a cap is an idea that needs to take root at the grassroots level. Is there enough support out there to carry this fight all the way to Baton Rouge?

Robyn Halvorsen is a real estate investor and a longtime resident of the Bywater. 

 

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