County Defends Tool That Leads To Jump In Property Values

HOUSTON -- Tens of thousands of families in the Houston area are being hit with double-digit increases in the property values that decide their tax bills, but Harris County Appraisal District (HCAD) leaders are defending their calculations.

Local 2 Investigates requested records and examined properties from Sky 2 and on the ground to determine what factors are pushing some neighborhoods into uncharted territory. The latest breakdown of neighborhoods released by the Harris County Tax Office shows 18 zip codes with double-digit jumps, meaning higher tax bills for more than 75,000 families in those areas.

HCAD is defending some new tools entering into its "mass appraisal" system, which determines values of homes in entire neighborhoods, sometimes without ever sending an inspector to look at homes in those areas.

"They could come in here and check on every individual house and see," said Willard Harvey, who lives in a southeast Houston neighborhood that is seeing homes average above the $100,000 mark for the first time.

He said his tax bill is hundreds of dollars higher than last year's, which is hurting many of his neighbors who are on fixed incomes. He said, "I just can't make it!"

His zip code, 77021, has 6,839 homes that now average $100,833 in value, which is up 7.8 percent over last year near Cullen and Old Spanish Trail. He blamed the county's mass appraisal system for lumping his modest home with the high-priced, upscale condominiums that are now being sold nearby for people who like the close commute to the Texas Medical Center.

One zip code, 77484, in the far northwest tip of Harris County surged up 25.93 percent over last year, which means taxes are assessed on homes now averaging $174,548 compared with $138,608 the previous year.

The area near the Johnson Space Center is showing the second largest jump in property valuations, up 15.73 percent over last year, while some 11,530 homes are up 14.13 percent in the Bunker Hill, Hedwig Village, and Hunters Creek Village areas of west Houston.

HCAD's leader, Harris County Chief Appraiser Jim Robinson admitted to Local 2 Investigates that some neighborhoods might jump without ever getting a visit from an inspector at his office.

"To the extent that we can, (we) visit as many properties as possible," said Robinson.

He said the county's mass appraisal computer system is constantly being fed with data on the sales prices of homes.

"We're continually updating the models to reflect the trends in the market that we're seeing based on the sales," Robinson said.

The computer then examines square footage of homes and the last known condition of the homes, grouping each home into a valuation neighborhood that is designed to include what Robinson calls "a homogenous group of properties." This causes entire ZIP codes to be raised together.

Robinson said it takes about seven years for his inspectors to cover every single neighborhood in a county with 1.7 million properties on the books. The computer program is designed to give appraisers an accurate view of each neighborhood in between those visits that may provide a more comprehensive view.

"We try to go back through neighborhoods, particularly neighborhoods that we know are in transition, and look at the changes," Robinson said.

Each construction or demolition permit, as well as reports of fires at homes, are reviewed by HCAD staff to enter into the computer program.

But HCAD does not receive all sales of real estate because Texas law does not require the disclosure.

Robinson said, "I think there are only four states that don't have mandatory reporting of sales to the appraisal authorities. Texas is one of those."

Also factoring in this year is a new tool known as Pictometry, which is a picture recorded from an airplane of every single property in Harris County.

"It is so accurate that you can even measure property using the Pictometry," said Robinson.

Sitting behind a desk, an HCAD worker can pull up any address and look at the property from any angle. A few clicks of the computer mouse allow HCAD to measure any wall or structure. The pictures are taken each year, so it could reveal a new addition or other improvements that a property owner has not disclosed.

"The appraisal is only as good as the data that we have," said Robinson.

Appeal hearings have now begun as more homeowners try to lower their appraised value of their homes. In 2007, HCAD reports 350,000 people filed appeals, causing 70 percent of them to have their values lowered. More information on the appeal process is posted online at HCAD at www.hcad.org/pdf/taxpayerremedies.pdf .

But Robinson said a higher number of appeals does not necessarily mean there is something wrong with his mass appraisal system.

He said many people are simply angry at the amount of tax that they are paying each year. Tax rates are set by local governments, such as city councils and school boards, so an appeal does not address that.

Appeals can only lower the valuation placed on a property based on foundation problems or other repairs needed on a home, or if a homeowner can prove his home is valued unfairly based on others in his neighborhood.

Robinson said, "The market value numbers that we generate are pretty accurate. The state controller looks at those each year and on residential property, they found in 2007 that we had appraised on average residential property at 98 percent of its true market value."

That means the state gave his office a 98 percent success rate, based on the state's independent examination of HCAD appraisals.

Robinson offered a few appeal tips. He said hiring a property tax consultant usually does not help a homeowner. He said, "The person that's most likely to succeed in a protest hearing is someone that can document, with repair estimates and so forth, the things that are wrong with their property and the things that need to be fixed. You know, we will always make an adjustment if people properly document that."

Local 2 Investigates found that most people who file appeals would be offered a lower valuation on their homes when they arrive at HCAD on the date of their hearing.

Before going before an Appraisal Review Board (ARB), which is a group of citizen volunteers whose decision is final, property owners first sit down with an HCAD staff member to make their case as to why their property value should be lowered.

Most staff members agree to lower the value, sometimes by just a few thousand dollars, and then the homeowner decides whether to accept that or try for a further reduction before the ARB.

Standing outside a southeast Houston home he bought for $14,500 in the 1970s, Harvey and some of his neighbors said the mass appraisal system does not work in areas like theirs. They said sales prices are artificially inflated by high-end condominiums that are for sale nearby.

"This property here, we pay the same tax and that's wrong," said Harvey.

His neighbor, fellow retiree Robbie Brooks, agreed.

"It's hard because it's just me and I'm on a fixed income," she said.

Robinson said, "With 1.7-million properties, sure we're going to make some mistakes. And that's one of the reasons you have the protest process."

More Information:

How To Protest Property Values For Property Taxes
Average Residential Single Family Home Market Value Change By Zip Code, 2007-2008