WTF?: How Buncombe conducts property reappraisals

While your 2024 news feed might be largely consumed by the presidential election, there’s another monumental task happening behind the scenes in county government this year: the reappraisal of all of Buncombe County’s property for tax purposes.

The county derives 62% of its more than $400 million budget from property taxes, which relies on the accurate assessment of thousands of properties, a process that happens every four years in Buncombe County. State law requires counties to perform reappraisals at least once every eight years.

As the value of real estate in Buncombe County has soared, the process has been under a microscope as critics argue that appraisals have resulted in higher-valued properties getting underassessed and lower-valued properties getting overassessed.

Outside of a reappraisal year, property can only be reassessed when changes are made to the property, which the Tax Assessor’s Office learns of when a permit is issued or property owners self-report. The county is not allowed to change assessed values of homes based only on its sale unless that sale reveals that a physical change was made to the home. This allows assessors to ensure they are not giving homes that sell more attention than those that don’t.

Development consulting firm Urban3, led by Joe Minicozzi, presented a pro bono analysis of assessment inequities to the Buncombe County Board of Commissioners in 2021. As a result, the county established an ad hoc tax reappraisal committee in September of that year to evaluate the process and identify potential inequities.

Urban3’s analysis showed that the county’s most expensive homes had been assessed at about 78.3% of their sale price on average, while the least expensive homes were assessed at about 84.5% of their price in 2021. Those findings echoed a 2019 University of Chicago study of Buncombe County, part of a nationwide project conducted by the university’s Harris School of Public Policy, that showed similar issues across the country.

On behalf of the committee, the county commissioned Syneva Economics — a Waynesville-based consulting firm that specializes in regional economic analysis of localized data, but not property tax assessments specifically — to perform its own sales ratio study. Syneva found virtually no difference in assessment between homes of different prices. Urban3 disputed Syneva’s methods. The committee’s recommendations to commissioners didn’t include changes to specifically address racial and economic inequities.

Instead, committee members focused on expanding access to the valuation appeals process for lower-income communities, boosting staff levels in the Tax Assessor’s Office, increasing levels of compliance around reporting property improvements and launching a public education campaign on the appraisal and appeals process geared toward residents of lower-income neighborhoods.

Buncombe Tax Assessor Keith Miller says significant changes have been made in response to those recommendations, and residents will see improved accuracy in the reappraisal that will be concluded at the end of this year.

“Our experience with the committee has been very beneficial to our department, and I believe those benefits will transfer to our residents and property owners with more accurate assessments. With each change that we have been able to make, whether it’s staffing, technology, internal processes … it has been because of the recommendations of the committee,” Miller says.

This year, two assessor positions were added, including a real estate data review specialist and a luxury homes specialist. That means a total of 12 assessors — two commercial and 10 residential — will review Buncombe’s land, structures and improvements using a variety of methods to reflect fair market value as closely as possible as of Jan. 1, 2025.

The process

With about 132,000 properties and so few assessors, it’s impossible to make an in-person site visit to evaluate every property in the county.

Throughout the year, county appraisers will use technology, including aerial and street-level photography and other software to review the accuracy of every property’s characteristics, including square footage, bedroom and bathroom count, condition of the structure and exterior walls. Additionally, many sites will be visited in person, usually prompted by permits and new construction, property transfers, internal data audits and phone calls from residents requesting a review, Miller says.

“We also set aside parcels and neighborhoods that may have had no visits or a low number of visits in the last few years to visit this year. Reappraisal years will see a major uptick in site visits,” he adds.

To determine property values, assessors group “uniform or similar properties together to ensure fair and equitable property values,” according to the assessor’s website. Assessors take a property’s location, age, type of construction, replacement cost, zoning and depreciation into consideration when setting values.

The overarching goal, Miller says, is equity across the entire county. Essentially, any two homes that sell for the same price in Buncombe County should be paying the same amount in taxes.

Because of a rapidly changing market and property cards that aren’t updated in a timely manner by owners, that often doesn’t happen the farther the county gets from a reappraisal year. In the last reappraisal year, 2021, the ratio of assessed value in Buncombe County to market value — or price at which a property sold — was 99%. That number slipped to 86% in 2022 and 73% in 2023, according to county data. This year, property is being assessed at only 67% of real market value based on sales data.

For example, one home in The Ramble Biltmore Forest assessed at about $3.5 million sold for about $7 million in December, as reported by the Citizen Times.

Minicozzi has said that those slipping sales ratios represent tax money left on the table that the county should be able to use for additional services, and one way to fix that is through more frequent reappraisals. The reappraisal committee did not make that recommendation, and Miller says that other adjustments within his department will help those numbers without having to increase reappraisals.

By state law, if a jurisdiction’s sales ratio dips below 85%, it has to conduct a reappraisal within three years. Since Buncombe was already scheduled for one within two years of its ratio slipping below 85%, no such mandate was necessary.

The goal for tax assessors is for assessed value to match real market value. Miller wholly attributes the slip in sales ratios over time to the rapidly increasing value of properties in WNC, as well as underreported property changes by property owners.

Changes made

Many of the changes in Miller’s office have been to increase staffing levels.

Since the Reappraisal Committee disbanded, Miller has added several experienced appraisers, dedicated an appraiser to luxury homes, added a dedicated reappraisal analyst, created a data analytics team and promoted an analyst to assistant director, he says. Temporary staff will be added this year to help with the workload, he says.

“We certainly have a few more team members to distribute our work than we did in 2021 and also have more technological-savvy and data-oriented team members than we ever have before,” Miller says.

Miller also brought more technology on board.

“In addition to our aerial imagery and street-level photography projects, we are implementing new technologies via vendors. One product detects changes in buildings and checks to make sure that our data is correct, and another is a machine-learning subscription that takes the appraiser out of the equation and predicts the value of all single-family home residential properties.”

In addition to in-house additions, Miller has been bouncing all over the county to town councils, committees, neighborhood associations and homeowners associations for the past year to teach residents how the system works. As of Feb. 20, Miller and his staff have made 70 appearances at community centers, festivals and community markets at the request of property owner associations, civic and professional groups, he says. He plans to continue to hold public meetings this year and next, and says anyone can request someone from his office to visit that community.

Miller also sought an independent contractor to conduct an ongoing equity study to review processes, data and the assessed values of all the county’s residential properties. Keene Mass Appraisal Consulting will work with the Tax Assessor’s Office to provide regular updates of its findings to county commissioners, he says.

Miller’s office has also been redesigning its webpage, www.buncombecounty.org/myvaluebc, to incorporate suggestions from the committee to simplify messaging and break it down into plain language.

All in all, reappraisals are a big lift, Miller acknowledges.

“On top of the additional time and work activities related to reappraisal, not including the time we will spend performing public outreach, our department must keep up with the typical daily workload that our real estate and construction industry demands of us.”

To pull it off, Miller says participation from all property owners is vital. The county sent out 80,000 postcards and has received more than 23,000 back, as of Feb. 20. There is no requirement to fill them out.

“For our team to produce accurate and fair assessments to our residents and property owners, we must have participation from our community. We do not know everything about every property in the county, and it is the responsibility of all North Carolina residents to review their record cards and report any improvements to their property or problems that they may have with our data. Please review your property online at tax.buncombecounty.org, on the MyValueBC app, or by returning the postcard that you will be receiving in the mail this spring. Your participation is key to accurate assessments across the community.”