Cypress Edition | July 2023

GOVERNMENT

Harris County sees record-high appraisal increases for second year in a row

APPRAISAL JUMPS Over 96% of Harris County residential properties saw appraisal increases this year.

BY JAKE MAGEE When describing the state of Harris County’s property appraisals for this year, Roland Altinger, chief appraiser for the Harris Central Appraisal Dis- trict, used one word: “unbelievable.” In a video released earlier this year addressing residents about the state of the local real estate market, Altinger said 96% of residential prop- erties in the county saw appraisal increases and the increases averaged 17%. These increases come on the heels of last year’s unprecedented numbers where 97% of such proper- ties saw increases. “We have seen two years of absolutely unprecedented increases in values,” HCAD Communications Administrator John Labus told Community Impact . Each year, counties across the state are required by law to appraise res- idential and commercial properties at their fair-market value as of Jan. 1. Altinger said what led to this year’s “crazy-hot market” was a combina- tion of a large inux of population; limited housing supply; and, most of all, changing interest rates. For years, interest rates were near zero, but in March 2022, federal o- cials began to increase interest rates to combat ination. They rose to over 4% in December, and by then, market values had already risen signicantly and remained there, Altinger said. Over 90% of Harris County’s 800,000 homestead accounts have a homestead exemption, which caps property appraisal increases at 10% and withholds some value from being taxed by some entities, Altinger said. No such exemption exists for

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commercial properties. “Chief appraisers, myself included, must follow the market, up or down, wherever supply and demand drives it,” he said. Harris Central Appraisal District has to appraise more properties annually than Los Angeles or New York, so appraisers are not able to appraise one property at a time. The district uses mass appraisal where similar properties are grouped together and appraised using data and statistical testing, Altinger said. If the district did not use such methods, appraisers would not be able to provide taxing entities, such as school districts and cities, the appraisal data necessary to set tax rates in their budgets, he said. Labus said the mass appraisal process doesn’t aect the accuracy of appraisals. The state regularly audits HCAD’s appraisal methods to make sure they’re accurate, he said. “There is state oversight over what we do,” he said. Legislative eorts The state Senate and House took

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session, the House led a bill to cap appraisal increases at 5% annually and reduce school district taxes by 16.2 cents. Meanwhile, the Senate proposed a 10-cent reduction in school district taxes and increasing the homestead exemption for school taxes from $40,000 to $100,000, said Cheryl Johnson, a member of the newly formed Select Study Committee on Sustainable Property Tax Relief that will make legislative recommendations for sustainable property appraisal relief. The House and the Senate had a stalemate. Gov. Greg Abbott charged both bodies in a special session to come up with a plan that includes reducing the school district tax rate, Johnson said. As of press time, no consensus had been reached. Rep. Greg Bonnen, RFriendswood, said the state has $17.6 billion set aside for property tax relief and leg- islators must come to an agreement this summer. “At the end of the day, we have to get this done,” Bonnen said. “It’s a top priority for me.”

‘UNBELIEVABLE’ INCREASES The percentage of Harris County residential properties that saw appraisal increases this year topped 96%, second only to last year at 97%.

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shots at the problem this year. During the state’s legislative

SOURCE: HARRIS CENTRAL APPRAISAL DISTRICT COMMUNITY IMPACT

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