Working-class neighborhoods hardest hit by rising property assessments
Pedro Hernandez enjoys life in Westway, a low-cost subdivision of Canutillo.
He says you can find the best meat in El Paso County at a tendered a few minutes walk from his house. It was a good place to grow up, and he chose to continue living there.
But he was shocked last month when he received the property tax assessment from the Central El Paso Assessment District on the modest three-bedroom home his parents bought in 1993 and then gave to him in 2015. The property was valued at $148,009, an increase of 74%. in just two years.
“I was like, there’s no way to go to hell. There’s just no way,” said Hernandez, 32, a high school social studies teacher at Da Vinci School for Science and the Arts.
Hernandez actually fared better than many of his neighbors. The average single-family home value in the Westway subdivision has risen from just over $62,000 in 2020 to over $133,000 this year, a 115% increase, according to an El Paso Matters analysis of Central District appraisals. assessment of El Paso.
The El Paso Matters analysis looked at valuation trends in 297 subdivisions with at least 200 single-family homes. The analysis excluded subdivisions that have seen significant new home construction since 2020, as this skews home valuation trends.
The analysis showed that the developments with the highest valuation increase rates over the past two years were generally lower-income neighborhoods with HLMs.
In addition to Westway, two other El Paso County subdivisions with low-cost homes have seen average home values double in the past two years.
A Segundo Barrio subdivision called 23 Magoffin has seen the average single-family home assessment jump from under $40,000 to nearly $83,000. A Canutillo subdivision called Westway #3 has gone from an average value of $64,000 in 2020 to $133,000 this year.
Other working-class subdivisions such as Ysleta in the Lower Valley, Clardy Fox in east-central El Paso, and Womble near the Marathon Refinery have seen average single-family home assessments increase by more than 70% between 2020 and 2022. .
Most of the subdivisions with the fastest growth in assessments since 2020 have long featured homes selling for less than $100,000.
In contrast, the slowest home valuation growth rate over the past two years has been concentrated in tonier subdivisions such as Kern Place and Alexander near the University of Texas at El Paso, where homes are sell for over $250,000, and The Willows in the Upper Valley, where homes often sell for over $400,000.
The average home valuation in Westway has risen nearly six times faster than the average home valuation in Kern Place or The Willows over the past two years, according to analysis by El Paso Matters.
Median household income in Westway is less than $30,000 per year, about one-third of income levels in Kern Place and The Willows.
What’s going on with valuations?
The 15 subdivisions in El Paso County with the highest rate of property assessment growth over the past two years had average home values just over $79,000 in 2020; the 15 subdivisions with the lowest growth rate had an average home assessment of nearly $193,000 in 2020. lower cost.
David Stone, assistant chief appraiser for the Central El Paso Appraisal District, said the home appraisals are based on recent sales of nearby homes. The combination of a low inventory of homes for sale and strong demand during the pandemic has resulted in sharp increases in home prices in many communities, including El Paso.
Stone said low housing costs in El Paso’s traditional working-class neighborhoods make these homes attractive to buyers.
“They are cheaper for people looking for a new home as well as for real estate investors. Increased demand for affordable homes would push their prices up,” he said.
“More expensive homes have a much smaller pool of eligible buyers. They are less attractive to investors and are more likely to be purchased by someone who intends to live there. We have far fewer sales of higher value homes than lower value homes,” Stone said.
Property assessments set by the Central Appraisal District play a role in how much property tax the homeowner will pay. The most important property tax decisions are made by elected officials, who set tax rates.
State law offers some protections against large increases in real estate appraisals. Local governments will almost certainly have to cut property tax rates this year to offset at least some of the increase in assessments. And people with property exemptions on their property – meaning they live in the home they own – can only see their assessed value increase by 10% each year.
But owners of commercial properties and rental homes have no protection against their taxable assessments increasing in a single year. They are likely to face big increases in their property tax bills this year – increases that will likely be passed on to customers and tenants.
In places like Westway, where average home values have doubled, people with homestead exemptions can face 10% annual increases in their taxable assessment for the next decade or more. This could result in additional property taxes of $2,000 or more over the next 10 years for an average Westway home.
decide to protest
The threat of increased property taxes led Hernandez to protest the appraisal of his home. It’s a step he and his parents decided not to take in 2021, when their valuation fell from $85,000 to $125,000.
“Last year we didn’t, and that’s because I spoke with my parents and it was still affordable in terms of paying the property taxes we had to pay. But a time we got it for this year, now they’re like, you know what, we have to protest,” Hernandez said.
He paid nearly $2,900 in property taxes last year, an increase of more than $850 in just one year. His property tax bill for 2022 won’t be known until local governments set the rates later this summer, but even with a planned drop in tax rates, he could face another hike of several hundred dollars. based on the new assessment.
“The more I think about it, the angrier I get,” he said.
Hernandez doesn’t have a farm exemption on the 0.15-acre property because he rents the 1,300-square-foot main house and lives in a 390-square-foot apartment his parents built for his grandmother. in 2008. This means that we will face the full impact of rising valuations this year, rather than spreading it out over several years.
A friend, Oscar Trillo, protested his assessment last year. Trillo’s ownership at Westway went from $69,000 in 2020 to $102,000 in 2021, but was lowered to $71,000 after the protest, according to El Paso CAD records. The valuation has remained unchanged this year.
Trillo, a government teacher at Canutillo High School, said his protest was a positive experience.
“The EPCAD people were a great help. In fact, I filed my protest incorrectly and the panel corrected my protest petition. I didn’t have to set a new protest or a new protest date,” he said.
One challenge with filing an appraisal protest is that property sale prices are not public records in Texas. So there is no way for most people to quickly research the selling price of nearby properties over the past few months.
Real estate agents have access to the Multiple Listing Service, which includes sales price data. So Trillo hired a real estate agent friend to help him research recent sales near his home. Hernandez paid the same real estate agent $50 for information on four recent sales at Westway.
“I think, based on all the research that I’ve put together, that the realtor has provided me with, I’d put (his valuation of the house) between $100,000 and maybe $110,000,” compared at CAD valuation of over $148,000.
Hernandez has a protest hearing on June 1. The deadline for filing a protest this year was Monday, May 16 or 30 days after the date of the notice of assessment, whichever is later.
He said he and his parents felt they had to do something about their property taxes. “I mean, I love this little neighborhood. I grew up here. I do not want to leave. And I don’t want property taxes to be the cause.