City Assessor Labus has better analytical tools than a year ago; Corbett wants his help to get flood victims more in buyouts

A year or so ago, the City Council settled on a plan to buy out flood-damaged properties for 100 percent of pre-flood assessed value.

New Mayor Ron Corbett, at the urging of some flood victims awaiting buyouts, now has come along and wants to up the percentage, and he's working behind the scenes to see if he can accomplish that.

Corbett on Tuesday said he thinks the city might now be able to make a case to pay flood victims 105 to 107 to 110 percent of pre-flood value for their properties.

Ultimately, Corbett and City Hall will have to convince the state of Iowa and the Federal Emergency Management Agency and the U.S. Department of Housing and Urban Development to pay buyout owners more than 100-percent of pre-flood value because it is federal and state money footing the bill.

Right now, Corbett is seeing what City Assessor Scott Labus can do to help him make a case.

In an interview this week at his office in the city's Public Works facility, 1201 Sixth St. SW, Labus said he now has access to better analytical tools to evaluate pre-flood values of properties damaged in the June 2008 flood than he did a year or more ago.

His office's fresh reassessment of the data indicates that median pre-flood values in the city's flood-impacted neighborhoods were about 6 percent lower than the market value of those properties, he said.

In an earlier report about a year ago, he put that figure at about 3 percent.

Both the 3-percent and 6-percent figures are ones that the city could use if it wanted to make a case for paying more than 100 percent of pre-flood assessed values in buyouts of flood-damaged properties.

(Of note, too, though, is the city has an ordinance in place, put there prior to the June 2008 flood, in which the city says it will pay 100 percent of pre-flood value in instances in which it buys out flood-damaged property. Any attempt to adjust the 100-percent figure would require a change in the city ordinance, which Corbett said was a simple matter.)

The extra 3 percent in Labus' new analysis comes from a couple of directions.

Firstly, he concludes that buyers pay more for homes they intend to use as rental property than they do for homes they intend to live in. And in the flood-impacted neighborhoods, he has found there are more rental properties there than elsewhere in the city – 47 to 48 percent versus 31 to 32 percent – and so assessed values arguably might tend to be lower in the flood-impacted neighborhoods that he otherwise would suggest.

Thus, he says the median assessed value for homes in the flood-impacted neighborhoods is an additional 1 percent below market value “to account for the higher probability that a property will sell for rental versus owner-occupancy.”

In his re-examination, Labus also has a tool that computes how likely an assessed value deviates from the median value, and he concludes that his analysis of “standard deviation” shows that assessed values in flood-impacted neighborhoods are more likely to be “incorrect” than in those in the city as a whole.

With that conclusion, Labus said “it is reasonable to estimate” that the median pre-flood value of homes in the city's flood-impacted neighborhoods is 93.88 percent of market value.

The city's intent in advocating that owners get 100 percent of pre-flood value was premised in large part on the City Council's belief that pre-flood assessed value was very close to market value.

Now, Labus' new analysis suggests that the assessed and market values now are wider apart than the analysis showed a year or so ago. He said his analysis would help make a case to pay 106.5 percent of pre-flood assessed value for Cedar Rapids' flood-damaged properties.

Mayor Corbett on Tuesday said this new work by Labus is something that the city can use to build a case for getting owners more than 100-percent of pre-flood value.

He said council member Monica Vernon, who owns a market research firm, also has had a statistician at her firm look at the numbers. With a margin of error factored in, Corbett thinks the case can be made for 109 or 110 percent of pre-flood value.

“But I don't know yet what else the state of Iowa needs to advocate for us,” Corbett said.

Fascinatingly, Labus' office divides the city into 173 micro-neighborhoods to better analyze if current assessed values are staying consistent with sales prices or property. And in the five of those neighborhoods hit hardest by the June 2008 flood, Labus' statistics show that assessed values were at 98.69 percent, 96.89 percent, 105.96 percent, 94.77 percent and 95.91 percent of market value.

Those numbers remain the foundation from which Labus now has brought additional analysis to bear.