Are Appraisal Districts And ARBs Considering COVID?

 

The short answer is no.  It appears the initial values and hearing results are based on business as normal.


Early data from 2021 informal and commercial appraisal review board (ARB) hearings indicate there will be a record level of judicial appeals in 2021.


Considering the following:


We believe appraisal districts grossly over-assessed commercial property in 2021. The “canary in the coal mine” is the hotel assessments.  If appraisal districts had substantially reduced 2021 hotel property tax assessments, it would indicate they understood the market.  However, most appraisal districts either: 1) left hotel values flat or 2) increased them.  Since hotel revenue were down 48% across the county, the logic in valuing hotels seems bizarre.

The bizarre hotel valuation is indicative of appraisal districts not understanding how to value commercial property in 2021, or possibly some other explanation.

While it is early in the season, the initial commercial hearing results are like those for prior years. (There was no consideration of COVID for 2020).  Hence, the appraisers at informal hearings and ARBs do not seem to understand the impact of COVID.  (Many of our commercial clients for apartments, office, retail, warehouse and especially hotel, had lower revenue in 2020 versus 2019.  The prior year’s income and expense is used to determine the current year’s tax value.)  The evidence clearly indicates values below the 2020 value, but it is not reflected in early hearing results.

There will be a record level of judicial appeals in 2021 since appraisal districts initial assessed values mostly did not consider COVID, and the informal and ARB hearings to date are not consistent with damage inflicted by COVID.


Call us at 713 290 9700 if you have questions. Reach us at www.poconnor.com. Thanks for your business and support.

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