Assessed property value in the borough decreased, at least temporarily, by more than $1.5 million in the wake of the early December storms, according to a recent Haines Borough report. The long-term market value could also be impacted, particularly in neighborhoods identified by geologists as areas of concern, although it’s too soon to say for sure, according to Haines Real Estate owner Dave Long.
“We talked about (property value) after the slide. We said, ‘Well, we can’t give this house away anymore. There’s no value in it. Our great, great grandkids will still be enjoying it,’” Jamie Grubb said.
On Dec. 2, Grubb and her husband Vance awoke around 4:30 a.m. to the sound of trees crashing onto their Lutak home roof, and silt and sand flowing into their bedroom. A localized landslide damaged their house and took the upper stories off their neighbor’s house, which had been for sale for roughly $500,000. Geologists subsequently flagged the neighborhood as an area prone to landslides due to the area’s steep slopes and soil composition.
Borough land assessment staff visited homes and made adjustments to home values for the borough tax roll, interim manager Alekka Fullerton said.
The $1.5 million in reported damage came from all over town and varied greatly in severity, Haines Borough assessor Dean Olsen said. “Damage ranged from fifteen-hundred dollars to total destruction of a home,” in the case of David Simmons’ house, which was obliterated by a Dec. 2 landslide on Beach Road. “Its value goes to zero until we can find out what the status of the property will be, whether it will be inhabitable or not,” Olsen said.
Olsen said the borough is still working to finalize 2021 assessments of properties at the end of Beach Road. These properties weren’t necessarily damaged but are currently inaccessible, cut off from utilities and, in some cases, in a mandatory evacuation zone.
Olsen said it will be challenging to accurately assess the value of these homes until a geotechnical assessment is completed for the area.
“When the geo team comes in and assesses, that will be a huge factor in the future of all that property. Market value’s a question mark until the stability of the area is determined,” he said.
The $1.5 million decrease is temporary in the sense that once property owners repair damage, value should return, Olsen said. He added that the borough could see a long-term decline in property value in the wake of the storms, but the full extent of the change in value won’t be known until properties start selling.
“I don’t think that we’ve seen the impact yet,” Long said. “My take would be it’s too early to say because of the seasonal variation in sales and everybody’s waiting on the (Emergency Operations Center) determination of whether (Beach Road properties) are inhabitable. If it turns out the homes are not able to be occupied, (the long-term decline) would be in the millions.”
Long said he’s required to flag concerns like landslide or flooding potential for prospective buyers. He said for now, he’s using the areas of concern identified by geologists during the December storms as a guide.
“If a house is in one of those areas, I put a little note to mention it,” Long said. Neighborhoods flagged as areas of concern include Lutak past the ferry terminal, the Mount Ripinsky hillside stretching from Cathedral View to Picture Point, Beach Road from Portage Cove to the end of the road, and a section of Mud Bay Road near the cannery.
Long said although it’s too soon to say whether all property in those areas will see a long-term decline in value, “anybody who saw damage in December, their property value is suspect.”
With a decrease in assessed property value comes a decrease in property taxes, a primary source of revenue for the borough. Under Alaska law, municipal assessors are required to assess the “full and true” value of a property as of Jan. 1 for taxation purposes that year. For 2021, this means assessed values include flooding and landslide damage.
“A lot of those will be temporary reductions, but still, it’ll help for this year for (property owners),” Fullerton said. A long-term decline in value would translate to a long-term decline in borough revenue.
Olsen said he hopes to finalize assessments in time to send notices of value to homeowners sometime in February.