Houston Foreclosures Cut Down Property Tax Values in Harris- By: John Cutts
Houston foreclosures contributed to the sharp fall in property tax values in Harris County, where Houston is the county seat, according to data from the Harris County Appraisal District.
This year, 30 percent of homes in Harris County dropped in market value as lower-priced foreclosure properties affected the appraisal of neighboring properties. The properties hardest hit were houses valued at over $1 million and those valued at between $80,000 and $150,000.
For the first time in more than 20 years, the overall tax base in Houston fell as businesses closed and as residential and commercial properties were foreclosed upon. The sharp decline in tax revenues is expected to force 600 taxing entities within Harris County to cut their budgets and these include school districts, cities, municipal utility districts and community colleges.
Jim Robinson, head of the appraisal district, estimates that total county tax rolls would fall by over $11 billion this year, representing a decrease of over 4 percent from tax rolls in 2009. He added that only one percent of homes in Harris County experienced increases in market value despite Houston foreclosures and those are mostly located in the Cypress-Fairbanks and Katy areas.
Robinson also said that the appraisal district is sending notices of home valuations to homeowners with advice that they can file protests with the district until June 1.
The market values of commercial, industrial and multifamily residential properties also declined, based on the county tax table. The values of commercial buildings and apartments fell by 10 percent while the values of industrial properties decreased by 11 percent.
Because of expected budget cuts, Houston Mayor Annise Parker has considered layoffs or unpaid furloughs if labor unions refused to forgo previously approved pay raises.
According to Paul Bettencourt, former tax assessor and collector for the county, declines in property values should be expected by residents or local officials because of the downturn.
Bettencourt also noted that homeowners who are not planning to sell their properties in the next few years can benefit from the drop in property values because of the reductions in the property taxes they need to pay.
Foreclosures for sale in Texas have also reduced property tax values in other parts of the state. Cities and counties have been looking for remedies to cope with sharply decreased revenues.
According to Robinson, Houston foreclosures alone did not cut down tax revenues. Cutbacks in chemical production and oil refining due to reduced global demand also affected overall tax revenues for the city.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.