Surge in appeals expected as assessments climb in Cedar Rapids

CEDAR RAPIDS - Larry Lang has lived in his northeast Cedar Rapids home for three decades and says he's never seen his assessed value increase as much as this year.

The assessment jumped from $117,800 to $123,000, which surprised him because he hadn't made any changes to the home. The assessment is concerning because he recently sold a comparable home for $10,000 less than its assessed value, dropping the price after it sat on the market for more than a year, he said.

An assessed value, which is supposed to reflect cash value, is the dollar value given to a property for the purpose of determining property taxes. As assessed value increases, generally, so do taxes.

Lang, a 72-year-old retiree living on a fixed income, said the increased tax will be a challenge to pay and he is planning to appeal.

Values on the rise

Hundreds of property owners are expected to file appeals this year as assessments rose across Cedar Rapids. It could be a record year for appeals, said Beth Weeks, the city assessor.

The assessor's office mailed 53,038 notices last month to note changes in assessments as of Jan. 1, 2017, for the different categories of properties - residential, commercial, rental, agricultural and industrial. Cedar Rapids property values increased 8 percent overall, topping $10.2 billion. Value went up in all categories but agriculture.

'The first question a property owner needs to ask is, ‘Could I sell my house for this?'” Weeks said. 'If they think it is excessive they want to have us review it.”

Statewide, residential and multi-residential property values increased, but it's difficult to know if the wave of appeals expected in Cedar Rapids will be mirrored elsewhere, said Victoria Daniels, the public information officer for the Iowa Department of Revenue.

'In general, pressure in the market has caused values of residential and multi-residential properties to increase,” Daniels said. 'That's not going to be the case in every area of the state, but there is a lot of demand for those property classifications.”

Brad Comer, the Iowa City Assessor, said in Iowa City, not including new construction, commercial values increased nearly 7 percent, residential went up around 4 percent and apartments went up 13 percent. Increases are similar to 2015, and he expects a similar number of appeals - about 250.

New construction driving increases

In Cedar Rapids, new construction in residential and commercial sectors drove the overall increase in value, while a surge in sale prices fueled increases for existing properties, particularly in the commercial sector, Weeks said.

The city saw $103.7 million in added value from new residential construction and $85.3 million in added value from new commercial construction, according to figures from the assessor's office. Excluding new construction, residential property owners on average saw a 2 percent increase in value while commercial property owners saw a 20 percent increase in value on average.

'We have to look at what happened,” said Scott Olson, a commercial broker and Cedar Rapids City Council member. 'The market has improved, but it hasn't jumped 50 percent, 30 percent or 20 percent.”

Olson plans to appeal three of six assessments on his commercial properties, including the eight story Higley Building, 118 Third Ave. SE in downtown Cedar Rapids, which increased in value from $1.38 million in 2016 to $2.2 million in 2017.

In Cedar Rapids, success of appeals varies from year-to-year. Last year, the Board of Review sided with the property owner 38 percent of the time, which was down from 80 percent in 2015, officials said.

Assessments & Reviews

The Iowa Department of Revenue requires assessors to revalue all properties every odd numbered year using sales of comparable properties from the previous year. Residential properties in Cedar Rapids are reviewed annually, Weeks said.

Property values are required to fall in the range of 95 percent to 105 percent of the comparable sale prices. If they don't, assessors must adjust the assessment up or down to land within the window.

The valuation process is done en mass based on statistics, which is why people should appeal if they believe the assessment is wrong, Weeks said.

Commercial properties hadn't been revalued since 2013, and the assessment this year determined they were at 81 percent of sale prices, triggering the increase, Weeks said.

Property owners can research comparable sales to help make their case and request an appraiser to examine the condition of a property. The review could lead to a change in assessment, or the assessor's office could decide the value is fair.

'We've had several calls,” Weeks said. 'We are finding once we explain and answer questions, show sales, several people have thought about it and said, ‘Nevermind, I'm OK where I am.' Of course, that's not everyone.”

Steve Hennessy, 56, has lived in his home in southeast Cedar Rapids since 2000, and he's never seen an increase like this year. His assessed value climbed $13,200 from $229,100 in 2016 to $242,300.

'I called 20 minutes after I got the assessment,” Hennessy said. 'I had to pick my jaw up off the floor. ... There's no way my house would sell for $13,200 more. There's no way the value would go up that much in one year. I didn't do anything to it.”

Hennessy said an appraiser visited his house the next day for a review, and he is awaiting a verdict.

Statewide, the informal review period runs until April 25. If a property owner is not satisfied, a petition can be filed with the Board of Review postmarked by May 1. Further appeals may be made to district court, which Weeks said is expected for some commercial property owners.

Weeks said her office has a pool going with staff trying to guess the number of appeals that will come in. Typically, 500 to 1,000 appeals are filed a year. Weeks is predicting 2,500 this year, which would be the most since 2010 when 3,484 appeals were filed.

'But, I'm OK if I lose and much fewer come in,” she said.

l Comments: (319) 339-3177; brian.morelli@thegazette.com

How to Appeal

The informal review period ends April 25. Petitions for formal reviews must be sent to the local Board of Review and postmarked by Monday, May 1.

In Cedar Rapids:

Informal appeal - Contact the Cedar Rapids Assessor's Office at (319) 286-5888 to set up an appointment.

Formal appeal - Board of Review petition forms may be obtained at the Assessor's Office at the Cedar Rapids City Services Center, 500 15th Ave. SW, by sending email to crassessor@cedar-rapids.org, calling (319) 286-5888 to receive a petition form by mail, or downloading a form at cedarrapids.iowaassessors.com. Once there, click on 'further information,” 'forms” and 'Petition to Local Board of Review.”

In Linn County:

Informal appeal - Contact the Linn County Assessor's Office at (319) 892-5220 to request a review.

Formal appeal - Board of Review petition forms are available at the Linn County Assessor's office, 935 Second St. SW and online at linn.iowaassessors.com - click on 'appeal assessment.”

In Iowa City:

Informal appeal - Contact the Iowa City Assessor's Office at (319) 356-6066 to set up an appointment.

Formal appeal - Board of Review petition forms are available at the Assessor's Office, 913 S. Dubuque St., Suite 206, or can be requested by mail by calling (319) 356-6066. They are also online at johnson-county.com. Once there, click on 'departments” and scroll down to the city assessor's link.

In Johnson County:

Informal appeal - Contact the Johnson County Assessor's Office at (319) 356-6078.

Formal appeal - Board of Review petition forms are available online at johnson-county.com. Once there, click on 'departments” and scroll down to the county assessor's link. Once there, click on 'Board of Review.” The Johnson County Assessor's Office is located at 913 S. Dubuque St., Suite 205.