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As home prices in the counties around Denver shot up over the last decade, tens of thousands of residents argued that officials incorrectly estimated the values of homes and other properties. They demanded their taxes be reduced. But that trend, practically a rite in some regions, reversed in recent years. Challenges filed with county assessors declined as homeowners apparently acknowledged the rising cost of real estate.
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Assessors’ offices use what are called “mass appraisals” because there are so many properties in a county and limited numbers of workers to analyze them.
That means the assessor’s office looks at properties built around the same time with a similar construction style, location, size, age and amenities. It uses an algorithm to help value them.
For example, the assessor’s office determines the value of residential properties based on data from the sale of the property, said PK Kaiser, Arapahoe County’s assessor.
If a three-bed, two-bath, two-car-garage home is valued at $390,000 and the property is in OK condition, all things similar, “the data tells us that the next house is also $390,000,” Kaiser said.
With an owner’s permission, the assessor’s office staff may go inside a house if there is any dispute about the property, such as square footage or bed and bath count, for example.
“We inspect, physically going to the properties, 100% of new constructions,” Kaiser added.
As home prices in the counties around Denver shot up over the last decade, tens of thousands of residents argued officials incorrectly estimated the values of homes and other properties. They demanded their taxes be reduced.
But that trend, practically a rite in some regions, reversed in recent years. Challenges filed with county assessors declined as homeowners apparently acknowledged the rising cost of real estate.
“People today understand that values have been going up dramatically,” said Scot Kersgaard, the Jefferson County assessor. “Day after day, week after week, it’s been in the newspaper constantly.”
The news is also on websites, like Zillow, Redfin and Trulia, which track the value of homes.
But the last word on the value of those homes, as far as the government is concerned, belongs to Kersgaard’s office. His office determines how much homeowners will owe government entities in taxes.
For years, rises in those taxes have led to lines at county offices and stacks of filings as property owners submit protests against assessors’ valuations.
In 2013, Jefferson County saw about 5,700 protests. That number reached about 11,200 in 2017, but fell to 7,200 in 2021.
Acceptance of the realities of rising prices is a theory as to why protests are declining. Kersgaard said local policies to make more information accessible could have played a role.
“In Jeffco, we’ve done things that have been designed frankly to reduce (protests),” Kersgaard said.
But the trend seen in Jefferson County is mirrored in the other counties surrounding Denver, according to annual reports from the state Division of Property Taxation.
In Adams County, there were about 2,600 protests in 2013, 11,200 in 2017 and 6,000 in 2021.
In Arapahoe County, there were about 4,800 protests in 2013, 9,200 in 2019 and 4,700 in 2021.
In Douglas County, there were about 5,200 protests in 2013, 7,200 in 2019 and 4,700 in 2021.
It is unclear exactly what is driving recent declines in protests.
The idea that property owners are more resigned to the realities of the real estate market is a common one.
“The real estate market is on fire,” said Corbin Sakdol, a former Arapahoe County assessor and executive director of the Colorado Assessors’ Association.
Another factor could be approach. Kersgaard said when he came into office, he told his staff not to be lenient with protests.
“What I tell them is if we get the value right, defend the (protest),” Kersgaard said. “Don’t just give them something so they go away. If we’re wrong, grant it.”
The staff was “delighted that I had their back,”he added.
Kersgaard estimates that around 3%-5% of people file appeals in any given year. If an assessor’s office grants an appeal that isn’t justified, “then you’re punishing the other 95% of people who didn’t file appeals.”
A slightly higher share of the tax burden would fall on those who didn’t get a break in taxes, he added.
Kersgaard is a Democrat, a party that’s often accused by Republicans of being pro-taxation. But he said party politics don’t drive his work.
“I tell people when I’m campaigning, ‘Yes. I’m a Democrat, but when I walk into the office I become a technocrat,’” Kersgaard said.
He said the process is intricate. Local bodies, such as school districts, are able to establish tax rates, but assessors must determine the fair values of the properties that rates are applied to.
“I’m totally agnostic about taxes,” he said.
Sakdol, the former Arapahoe County assessor, served as a Republican. He thinks Democrats and Republicans tend to handle assessment protests the same way.
“My experience with assessors across the state of Colorado, they’re most interested in making sure the value is correct,” Sakdol said.
Sakdol’s successor, PK Kaiser, a Democrat who took office in 2019, also said politics don’t drive assessments.
“We look at the protest and see what information is provided and reject (or) adjust the values based on the information provided,” said Kaiser, who was on track to win reelection by a large margin as of Nov. 10.
Gary Salter, a 60-year-old homeowner in unincorporated Jefferson County south of Lakewood, bought his home in 1999. He remembers filing six or seven protests since the early 2000s.
“They lowered (the value) every single time,” said Salter, who has noticed no differences across assessors.
During Kersgaard’s term, the Jefferson assessor office updated its website so people can view a map that shows recent property sales in their neighborhoods and see how they compare to their own houses. His office made the upgrade around early 2021.
Kersgaard guessed that type of technology may be a reason why some Denver metro counties have seen protests decline.
“People can look at their house and look at the other houses that are sold in their neighborhood and go, ‘Wow, we’re not actually overvalued,’” Kersgaard said.
Kaiser’s office in Arapahoe also created a map online so people can see how assessed property values have changed near where they live or in other areas.
But given that the decline in protests has occurred in so many counties, “some of it is just driven by the market” and that people today may better understand that home prices have been rising dramatically, Kersgaard said.
Since the start of 2010 — when the median single-family home price in metro Denver was about $200,000 — the median price has roughly tripled, according to a report by the Colorado Association of Realtors based on data as of this August. Statewide, it had tripled as well, according to the association.
Some Jefferson County protests arise simply because people are unhappy that their taxes are so high, said Kersgaard, who took office in 2019. (He was also on track to win reelection by a large margin as of Nov. 10.)
The public often doesn’t understand the assessor doesn’t decide tax rates.
The assessor's job is to establish accurate values of all properties — residential, commercial, agricultural, vacant land and more — in his or her county, a process meant to ensure that the amount of taxes property owners pay is fair and equitable.
Property taxes partly fund county governments, but they also fund school districts, fire and library districts, other local entities, and cities and towns.
Unless residents “go to their fire district meeting and their school board meeting and their county commissioners, they really don’t have any recourse,” Kersgaard said.
Another confusing wrinkle: Assessors’ offices do their work based on the value of properties as of June 30 of the prior year — they don’t report those values until the following May.
So the assessed value a homeowner receives isn’t based on the property’s current value, Sakdol said.
Assessor’s offices look at sale prices of homes in the same area to determine the value for a given property, Sakdol said.
Rising home prices amid the economic disruption of the COVID-19 pandemic could be informing homeowners about market trends, Kersgaard said.
“They’ll see it’s not just the assessor’s office that says their value is going up,” Kersgaard said.
Kersgaard acknowledges the impact of higher assessed values can hit some people hard, like retirees on fixed incomes.
And while home prices might see a slowdown, increases from the assessors office may still be on the upswing. That’s because valuations from assessors are based on data that lags roughly by a year, Sakdol said.
“They’re looking at what was the value of your property as of June 30, 2022,” Sakdol said. “However, they don’t report those values until May 2023.”
That means assessors could be busy next year as homeowners attempt to control those costs through protests.
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