In an incredibly tone-deaf statement, the Harris County Appraisal District (“HCAD”) announced yesterday that some homeowners who were flooded in Harvey might see a 21% increase in their appraised value this year!
Really? These folks have got to be feeling like Job at this point. First, no one warns them that the levies are about to be overtopped, notwithstanding the models showed this would happen at least 72 hours in advance. Then, the Corps opens the gates and floods them. Then, the local governments will not invoke emergency appraisal for 2017. Then, the City makes the permitting to rebuild a nightmare. And now, HCAD is going to hit them with a 21% property tax increase!
The possible 21% increase is based on a state law that limits increases to 10% per year. But, apparently under that law, if last year’s appraisal was reduced for damages, it can be ignored and HCAD can apply the 10% per year to the pre-damage value.
While that may be theoretically possible under the law, I cannot imagine that any home that was flooded in Harvey has actually increased in value by 21% since 2017. My realtor friends tell me that at virtually every showing prospective buyers ask whether the property flooded in Harvey.
But according to the story in the Chronicle Thursday, a HCAD spokesman said that its appraisers are not finding any stigma associated with flooded properties. Excuse my French, but this is b.s. Anyone who thinks that the value of a property is not affected by its flood history is an idiot.
While there may be certain unique circumstances that justify a 21% increase in the value of a Harvey-flooded property, if HCAD really raises values by 21% on a widespread basis, we need to clean house over there. And there should probably be some governance changes to the central appraisal system generally. My friend, Charles Blain, wrote this article about the role local elected officials, who generally have an interest in seeing higher appraisals, play in CAD governance.
Hopefully, HCAD’s warning yesterday will be limited to a few one-off situations. But if it is widespread, look out for the pitchforks and torches.