(Sage Smiley / KSTK)
Up until last year, some properties in Wrangell hadn’t had their value reassessed in decades. The borough paid for every parcel in town to be reassessed, and when the results came back earlier this spring, some property-owners got a shock when they opened the mail and found their property values increased by tens or hundreds of thousands of dollars. Just over 7% of property assessments are being appealed.
First-time homeowners Nicole Hammer and her partner Trevor Grant bought their house in September, and paid the appraised value of $205,000. So when their assessment came in the mail at more than $270,000, they were confused. Could the house really have appreciated almost 30% in less than six months?
“I took pictures and sent them to Dad. I was like, ‘What the heck does this mean?’” Nicole Hammer relates with a laugh, continuing: “He’s like, ‘This is not right.’”
“Dad” is Clay Hammer. He’s been getting Wrangell property assessments for decades, and also was floored by the assessment for his own house.
“It’s typically 25% or so less than what might be the fair market value, you know, a little bit more on the conservative side,” says Clay Hammer, “And so when the assessment showed up, I was a little bit surprised – a whole lot of surprise, because it was quite a bit more than what we had originally paid for our house.”
He’s also a cosigner on Nicole’s house. And while he didn’t appeal his own property assessment, he and Nicole appealed hers.
“Thankfully, our house was recently bought, which also meant that it was recently appraised,” says Nicole Hammer. “Because we had recently bought it, we were able to talk to the assessor and tell him, ‘Hey,’ basically, ‘You’re wrong.’”
Wrangell re-assessed 2,527 parcels last year, according to Borough Finance Director Mason Villarma. The borough had been assessing about a third of town each year, but Villarma says based on his review of previous assessments, he doesn’t believe they were done properly. For the most part, property values in Wrangell have been stagnant for – in some cases – decades.
“You can look back 30 years at a lot of properties,” Villarma says, “And they might have changed a couple of percent over time, but certainly not commensurate to inflation and the actual real estate market at the time. So the people – Wrangell citizens – haven’t been really exposed to what I would consider a mass appraisal for decades.”
It’s not the borough that assesses properties. That’s done by an outside firm contracted to complete the assessments – the Appraisal Company of Alaska.
The new assessments were mailed out to property owners in late March, which started a 30-day period for them to contest the valuations.
Appeals were submitted for 179 properties before the April 20 deadline. Villarma says now, the town is in a waiting period when the assessor is reviewing appeals and contacting property owners.
“They will look at the facts and circumstances presented, and they’ll contact the owner of the property and kind of hash out the details that were submitted,” Villarma explains, “And if there’s any merit to their appeal, based on the criteria for appeals, they will either recommend a revised property and improvement value or they will continue to disagree with the property owner.”
If there’s still a disagreement, the appeal will go before the Board of Equalization, which is tasked with finalizing assessed property values. The board meets starting May 8, and will continue meeting until all appeals are heard and resolved.
Although 179 is a much higher number of appeals than average, the borough was expecting an increase because of the upward shift in property valuations this year.
Last year there were 53 appeals.
“Most were resolved, or they withheld their appeal before the BOE actually happened where we only had single digits,” Villarma says. Only four of last year’s appeals actually went before the Board of Equalization.
“I think, inherently, there’s a lot of apathy towards the process, because there just hasn’t been a whole lot of experience from a citizen’s side or really the administration, from what I understand,” Villarma says. “We haven’t had the hard conversations of: ‘Why is my property valued this way, and my neighbors being valued in a different way?’ People have kind of just been in the status quo mode for so long. And we haven’t had to consider: is this valuation unequal, is it excessive, is it improper, is it undervalued?”
Those standards – that an assessment is either unequal, excessive, improper or undervalued – are what property owners must prove to have their assessed value changed.
Villarma says he hopes the borough can get on a schedule of reassessing property values once a year – he says that’s the most fair and accurate way to go about it. As part of that shift, he’s also working to make detailed property data more easily available online so property owners can do research and compare their property to similar ones in town.
“That way, for one, we don’t have to print off a million things down here at City Hall when people come in,” Villarma says, “But you know, they can do it at their own convenience, too.”
New homeowner Nicole Hammer says appealing her property assessment was a fairly simple process and the assessor was receptive to her claims. She’s hoping that means the assessed value will drop.
“Definitely would hope it wouldn’t be more than what I paid for it, that’s for sure,” she says with a laugh. “Either that or stay the same, or I’d be happy with either.”
Her dad, Clay Hammer, says based on Nicole’s jump just six months after purchasing her house, he’s not surprised that there are a lot of appeals.
“[It’s] kind of a learning process for all of us, really the whole darn community,” Clay Hammer says, “Because the assessor was was pretty clear on it when he showed up with those results that that he told the folks at the borough that they could expect to be a whole lot of people looking to potentially contest it because the numbers were really, really high”
Finance director Villarma encourages others who submitted appeals to really think about which of the standard appeals their petition falls under in the run-up to the Board of Equalization, “And make sure you can justify one of them, which is either your assessment is unequal, excessive, improper or undervalued. I would venture to guess most people aren’t going to argue they’re undervalued. So really, it’s unequal, excessive or improper,” Villarma says.
There’s a presentation posted on the borough website to help people develop an argument for the Board of Equalization hearing. And Villarma says the borough wants to help how they can.
“We’re happy to help here at the finance department,” he concludes. “Don’t really have any skin in the game, just to help people who want things to be assessed right. And this is the best way, even though it can add a little heartburn to people, this is the best way we know how to do that.”
Once property assessments are finalized by the Board of Equalization, Wrangell’s Borough Assembly will discuss setting property taxes. Property taxes are determined by the local mill rate, which is multiplied by the assessed value to get the tax amount. Wrangell assembly members have repeatedly discussed dropping the mill rate this year to lower the tax burden on local property owners. Currently, property taxes make up just over 27% of Wrangell’s revenues.
Get in touch with KSTK at news@kstk.org or (907) 874-2345.
