Monday was the last day for Bexar County property owners to dispute appraisals. For some savvy residents, appealing property taxes is an annual task that allows them to settle on an amount lower than initially determined by the Bexar County Appraisal District. But for those unfamiliar with how to navigate the process, many of them lower income families, rising taxes could force them out of homes and communities. That’s why BCAD must reassess its appraisal method and the appeal process.
I grew up in Victoria Courts, a San Antonio Housing Authority (SAHA) property of public housing units in the Lavaca neighborhood. Because living close to public housing was undesirable, many homeowners moved out of the neighborhood in the 1960s, resulting in a drop in housing prices that allowed my parents to afford their first house. The house we moved into when I was 6 years old was on Lavaca Street, just half a block from Victoria Courts.
My siblings and I began buying houses in the Lavaca neighborhood and restoring them in the 1980s. We wanted to make available affordable housing for low-income families. Most of our tenants worked in the low-paying hospitality industry downtown. But once the Victoria Courts were razed, our neighborhood became desirable. Many began moving back into the neighborhood and paying outrageous prices for houses, causing property taxes to skyrocket, and driving out many of our humble, hardworking neighbors.
Under Bexar County’s appraisal method, a family like mine, that has lived on Lavaca Street for decades, could have a property value of about $375,000. With homestead exemptions, and living in the house for half a century, this family pays only around $950 in property taxes. But if the elders die and leave the house to a daughter or son, they have to reapply for the homestead exemption. If they don’t or are unsuccessful, their property tax will increase to about $10,000. If the daughter or son is unable to pay, they will need to move out to make room for owners who can.
Our own property taxes in Lavaca went up 68% between 2014 and 2016, and we were unsuccessful in protesting our taxes. A University of Chicago study found that 54% of the lowest value homes in San Antonio were over-assessed and only 41% of the highest value homes were over-assessed. Because the lowest value homes are usually those of low-income families, the valuation method is more likely to affect their homes than those of more affluent ones. Not only that, but low-income families are less likely to know how to protest their property taxes.
Property owners can go through an informal process, in which they could receive a settlement offer from the appraisal district. But those unfamiliar with the process might not be able to provide the evidence the appraisal district seeks. If the property owner does not accept the settlement from the appraisal district, they then go through a formal process with the Bexar Appraisal Review Board (ARB), in which the ARB sits in panels of three to hear testimony and review evidence to determine property owner protests. The ARB is composed of volunteers without sufficient knowledge or experience in construction, appraisal methods or real estate investments. If a property owner wants to appeal the decision of the ARB they must do so in binding arbitration or District Court.
In 2019 the percent reduction in property values in the informal and formal meetings was only 6.43%. Thus it appears that the best method to protest property taxes and secure housing for low-income families is through binding arbitration. Binding arbitration is with professionals knowledgeable and experienced on property values. According to the BCAD Comprehensive Annual Financial Report, the binding arbitration professionals have reduced the property values by 17.5%. But the process is costly for low-income families at $500.
For low-income families to have a real chance to protest property taxes and keep their homes, there need to be changes in the Bexar County appraisal and dispute process. These changes should include keeping exemptions if a son or daughter inherits the property; basing property tax values on rental income; appraising rental property values on tenant household income; waiving the $500 binding arbitration fee for low-income families; carefully examining tax abatements, fee waiver and loan forgiveness for developers and corporations; and returning state contribution to public education to 2008 levels, or 49%.
This is a call for city, county, and state elected officials, BCAD staff, and real estate professionals to come together to explore better methods of valuation so that low-income families are not displaced from their homes.
