By Aldo Svaldi
The Denver Post
Property values across the metro area are popping through the roof, and owners should prepare for higher property taxes in the years ahead, according to a report Wednesday from county assessors.
“Property values across Denver have recovered from the recession, reflecting the desirability and growth of the city,” said Denver assessor Keith Erffmeyer.
That’s good news for local government revenues, but higher property tax bills are the trade-off.
Tax increases won’t match the jump in values one for one, but individual tax levies won’t be known until protests wrap up in December and individual governments and districts figure out their budgets, Erffmeyer said.
Assessors must value properties in their counties every two years, and notices of those revised values should start arriving Friday. The current notices estimate values as of last June 30, and those values will help determine property taxes paid in 2016 and 2017.
Reflecting the region’s robust real estate market, many neighborhoods are seeing record percentage increases in property values, assessors said Wednesday in a news conference.
That is a big change from the past two assessment cycles, when values dropped in many areas.
Denver reported a 29.6 percent jump in the median value of residential properties, a 33 percent jump in multifamily properties and an 18 percent jump in commercial properties.
In Arapahoe County, residential property values rose 22 percent and commercial property values were up 15 percent, while in Adams County residential values were up 19.8 percent, commercial values were up 11.6 percent and farmland values were up 23.8 percent.
In Jefferson County, residential values are up 20 percent on average in the latest assessment cycle. The average value of a single-family home is $321,000, a 12 percent increase from the old high of $285,000, set in 2008.
“These increases are the result of the change in the economy, a low inventory of residences and high demand for these properties,” said assessor Ron Sandstrom.
Douglas County had a 19.2 percent jump in average home values, and a 40 percent increase in the value of new construction between 2013 and 2014, said assessor Lisa Frizell.
Those increases represent the midpoint. That means some areas have had much larger jumps in property values since summer 2012.
Assessors noted lower-cost properties hit hard in the real estate downturn, condos and townhomes, and apartment buildings showed some of the biggest percentage gains in value.
In Denver, for example, northeast and southwest neighborhoods laden with foreclosures had the largest percentage increases in home prices. Sun Valley homes saw a 51.5 percent increase in home values, and in Cole, home values are up 47.4 percent on average.
Likewise, in Arapahoe County, Aurora had the biggest increases in property values, especially areas near East Colfax Avenue, said assessor Corbin Sakdol.
In Broomfield, homes under $300,000 rose much faster than the 22 percent increase averaged countywide for residential, said assessor Sandy Herbison.
Some neighborhoods in eastern Jefferson County were up closer to 40 percent, while mountain homes were averaging gains of less than 10 percent, Sandstrom said.
In Adams County, condos and townhomes in Thornton have popped 35 percent or more in value since the last assessment cycle, said assessor Patsy Melonakis.
Assessors said understanding what those increases will mean for actual taxes is a complex calculation, but most people should budget for a bigger bill.
Denver offers an interesting case. Amendment 2A, which voters approved in 2012, allowed the city to “debruce,” or keep tax revenues above the limits set by the Taxpayer’s Bill of Rights, authored by Douglas Bruce.
The measure also caps the annual increase in what the city collects from property taxes at 6 percent, said Deputy Mayor Cary Kennedy.
But Denver’s general fund claims only about a quarter of property taxes, so what goes on with Denver Public Schools, which gets about a 60 percent share, will carry more weight, Erffmeyer said.
Frizell said taxpayers who want to influence their property tax bill should get involved with the budgeting discussions by local governments and districts.
Given the sticker shock that some property owners will face when they open their notices, assessors are bracing for more protests, which must be submitted by June 1.
Protests need to be based on property values as of last June 30, said JoAnn Groff, the state’s property tax administrator.
Given that metro home prices have ratcheted even higher since then, using more recent prices and sales would actually work against those challenging their valuations.