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Renovation Plans

With its controversial assessor gone, the city focuses on fixing a troubled office — and making property assessments more equitable.

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But the joke really isn’t what’s important. After a tumultuous six months, both men are finally feeling free to relax and talk about the future. Beginning this week, as part of the department’s new outreach plan, city appraisers will hit the streets armed with new laptops and digital cameras to physically inspect 7,000 to 10,000 houses and bring them up to market value, or lower assessments that are too high. It will be the first time in years the city has sent its appraisers out for so many physical inspections.

Wray and McKeithen hope the outreach will improve the accuracy of assessments and, more importantly, rebuild the public trust.

It’s a tall order. In Wray’s office on the second floor, they detail plans to fix the city’s main revenue engine just two days after City Council forced City Assessor James R. Vinson to resign. This year, more than 2,100 residents filed assessment appeals. An outside consultant found significant disparities in the assessments of similar properties in the same neighborhoods. The department is understaffed. And public perception of the office has been dominated by the very public trial of Vinson, who reduced the assessment of his own home while his neighbors saw their tax bills soar.

For Wray, it’s familiar territory — he was in a similar boat when former Assessor Mack Lockhart resigned in the summer of 2000 (consultants found the office was way behind in assessing properties properly, costing the city millions in potential tax revenue). Now, once again, Wray is attempting to rebuild an office mangled by mismanagement. But this time City Council is giving him the tools to do it. Council recently approved the hiring of five new field appraisers in the residential division and may be adding additional commercial appraisers pending a consultant’s report.

“The bottom line is we got our job cut out for us to restore the integrity of the system,” Wray says. “But we are vastly improved.”

Understanding the importance of the department is paramount: The assessor’s office is charged with appraising all residential and commercial properties in the city. Those appraisals are used to determine property tax bills, and the current tax rate is $1.37 per $100. State law says all jurisdictions must appraise property at 100 percent of market value, but 90 percent to 95 percent is considered ideal, according to industry experts, and current problems in the city assessor’s office are rooted in the inability to reach that industry standard a few years ago. In 1999, for example, properties citywide were assessed at just over 84 percent of market value, which meant the city was failing to collect about $20 million in taxes.

One of the first priorities, McKeithen says, is to fix the way neighborhoods are grouped for appraisals. In the past, Richmond relied heavily on a process called trending wherein property assessments are based primarily on nearby sales of similar homes. Because many older neighborhoods in Richmond experience very few sales, Vinson had the number of neighborhoods in Richmond reduced from about 150 to 38, in order to create larger sample areas from which to compare sales. That, says McKeithen, often amplified existing market inequity. To correct the problem, McKeithen is increasing the number of neighborhoods to anywhere between 100 and 150, which will help appraisers zero in and compare real estate in a more effective way.

“We want to get ahead of the curve,” says McKeithen.

Physically inspecting more properties — and assessing all properties at least once every four years, instead of once every six or seven years as in the past — will help appraisers weed out much of the bad data. The new system doesn’t rely solely on nearby sales, which can be a faulty barometer in older cities such as Richmond where the housing is much more diverse than in suburban neighborhoods, where the housing is often built in large chunks at the same time. By combining sales data with more field inspections, McKeithen hopes to improve the equity of assessments.

Bruce W. Sauter, a consultant with the International Association of Assessing Officers, says the city is on the right track. He recently finished a review of Richmond’s assessment practices and found efforts to bring property values up to market value had improved — overall, city properties are now assessed at 96 percent of market value. But the process of raising values across the board created more problems — namely, it magnified already improperly assessed properties.

“The conclusions that they were drawing from properties and applying that to other properties was faulty,” Sauter says. “In some cases, in a rush to get things done there wasn’t enough stratification and enough detail analysis.”

The road to recovery will take time, Sauter says, and more appraisers.

“It’s not something where you can snap your fingers and fix it overnight,” he says. “But if you don’t have accurate data, your alternatives are limited.”

By visiting more properties each year, McKeithen says the appraisal staff is attacking the root of the problem. This year, the goal is to personally inspect 7,000 to 10,000 properties, but next year, after five new appraisers have been hired, the goal is to visit 15,000 properties or more. By meeting with property owners, and including them in the process, Wray and McKeithen expect to see fewer appeals in the years to come.

What’s more, the real estate market is slowing down, which should make keeping up with rising market values easier. In the past two years, the hot real estate market has made it more difficult for McKeithen’s staff of 14 appraisers.

Wray says the city will be conducting a national search to replace Vinson, but there’s no rush. The existing staff is capable of doing the job, McKeithen says.

“Everybody is eager to show that they can do it,” he says. S

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