The rebounding housing market is leading to double digit estimated market value increases in most Anoka County communities.
According to data shared by the Anoka County Assessor’s Office, the county’s estimated market value when accounting for all types of property is expected to increase from $23.13 billion to $26.08 billion between 2013 and 2014, a 12.72 percent jump.
2014 valuations impact property taxes in 2015, but how large valuation changes affect property owners is not a simple answer.
“Just because valuations go up doesn’t mean taxes will go up,” said Anoka City Manager Tim Cruikshank, who added that the Anoka City Council focuses on the levy because valuations are out of its control.
Property taxes paid depends on how much the city, county, school district and other taxing jurisdictions levy. Upcoming budgets for the cities, school districts and the and county will not be finalized until this spring.
Taxes also depend on what your market value change is relative to others in comparable properties in the community you live or do business in.
The struggling housing market causedtax bases to decline from during the recession and the improving housing market is why tax bases are increasing now, according to Anoka County Assessor Mike Sutherland.
“Single family residential has come back. The townhomes have come back. They have not come back to anything like they were pre-fall, but they have significantly come back the last couple of years,” Sutherland said.
He has heard rumor of a seven-figure house soon to be listed in Blaine.
“We haven’t had one of those in a long time,” he said.
Commercial and industrial market values are improving, but not nearly as much as housing. Although Sutherland noted that the values of these properties did not drop at as drastically as residential did during the recession. When residential valuations countywide were dropping by double digits between 2009 and 2010, commercial and industrial properties not counting for new construction dropped by 7.8 percent.
Property owners can formerly appeal their property valuations at either Local Board of Appeal and Equalization meetings comprised of a city council-appointed group ,or they will meet with a county assessors office staff member at what is called an Open Book meeting. Bethel, Blaine and East Bethel have already held meetings, but most are coming in late April.
The date, time and location of the meeting is included on property tax statements, or property owners can call the assessor’s office with questions.
In the case of a disagreement, an assessment can be appealed to the Anoka County Board of Review June 16, or an appeal can be filed with the state’s tax court by April 30, 2015.
Market values for 2014 were calculated by looking at comparable market sales between Oct. 1, 2012 to Sept, 30, 2013, Sutherland said. This needs to happen so far in advance so the county assessor’s office has time to compile the data and notify residents of the upcoming valuation appeal hearings.
Sutherland believes people care the most about their estimated market value change from year to year, but noted that many residential properties are actually taxed at a lower value. The state legislature in 2011 repealed the Homestead Market Value Credit in favor of a new Homestead Market Value Exclusion program.
This change did shift more tax burden to higher value homes and non-residential properties, the Minnesota Department of Revenue reported. It also resulted in tax increases for some residential properties whose values had been lowered because the reduction in a community’s taxable value increased the tax rates.
Reaction to valuations
Jeff Anderson was one of two people who came to a 7 p.m. presentation Monday night, April 14, by the Coon Rapids assessing department at Coon Rapids City Hall. Anderson was not for or against his estimated market value, which went from $201,900 to $224,200. He moved to Coon Rapids in September and just wanted to better understand how assessors do their job.
Developers Jim Deal and Matt Kuker own the Ramsey Professional Center that their PSD, LLC office is located in as well as several other tenants including the Fountains of Ramsey.
This building’s value is slated to increase from approximately $2.87 million to $3.95 million. Deal and Kuker understand that this valuation increased because of improvements such as The Falls Cafe being completed. They know that the taxes on this building may not necessarily increase.
The estimated market value of the Northwest Metro VA Clinic property they own in Ramsey is increasing from $3.68 million to $3.74 million.
Deal and Kuker said they will evaluate all their properties to see how they come up against comparable properties and what changes there have been before raising any concerns about the assessments. For instance, they made sure to quickly notify the county assessor’s office when the Diamonds Sports Bar was demolished on property they own off Highway 10 and Traprock Street in Ramsey.
“From a real-estate standpoint, you don’t like to see low valuations,” Deal said. “When I go to buy a property, the first thing I look at is the tax rolls.”
Blaine accounts for about 20 percent of the county’s tax base. It is eclipsing the $5 billion mark in 2014 for the first time since 2011, but is still well below its peak of $5.9 billion in 2008 after which it stated to see annual decreases as much as 10 percent in 2010 and 9 percent in 2012.
“I’m looking forward to doing the budget this year,” Blaine Councilmember Russ Herbst said. “The budgets the last three to four years during the recession have been hell to do.”
Blaine will benefit the most of any Anoka County community in terms of new construction increasing the tax base, although it is still a very small factor in why its market value is increasing. Blaine will add about $108 million to its tax base that can assist with paying the city’s 2015 expenditures. The next highest increases in new construction value for 2014 are being seen in Ramsey ($43.44 million) and Andover ($40.21 million).
Herbst said Blaine has one of the lowest tax rates in Anoka County and what he feels is some of the best service, so his ideal scenario would be to maintain or even lower the tax rate.
On the other hand, Andover City Administrator Jim Dickinson said the Andover City Council has historically focused on the gross property tax levy rather than the tax rate because this is the money the city collects to operate the city on a day-to-day business and pay off its debt. He also is skeptical of what values will do beyond 2014.
“Values were dropping over the last three to four years. Now there’s a big increase in one year. I’m apprehensive to immediately capture the entire gain. We want to see some staying power,” Dickinson said.
Eric Hagen is at firstname.lastname@example.org