Property assessments went up by an average of 17% this year as the borough works to implement a new mass appraisal system—borough manager Annette Kreitzer said staff are working on a budget proposal to lower the mill rate in an effort to partially offset a tax hike.
The new assessments are closer to market value, according to assessor Michael Dahle. Dahle was contracted by the borough in November in an effort to make assessments more equitable. Some properties in Haines hadn’t seen an increase to their assessed value for at least 10 years, Dahle said.
“We’re looking at how we can minimize the effect for homeowners,” Kreitzer said. “We know this is a big change. We started this whole process by hearing from people who are asking, ‘How come my property has been assessed every year and I know the guy a street over has not be reassessed in 10 years?’”
Dahle and Kreitzer said the main factor that caused the assessment inequity was the lack of clear policy when it came to assessments combined with a high turnover of assessors who all operated differently.
“An appraisal is an opinion of value. Different assessors make different decisions. We’ve had a fair number of different assessors,” Dahle said. “They have different levels of familiarity with Haines and the market. There were probably times things should have been updated but the person didn’t have the knowledge or background to be comfortable making those changes.”
To come up with new assessment values, Dahl analyzed property sales data going back five years. Between 2018 to 2022, 213 homes were sold in the Haines Borough. He said the average property in Haines was assessed at 20% below market value.
“We’re in a market that has seen a significant increase in property values. We haven’t kept up with that,” he said. “We’re trying to get the assessed values representative of the market.”
Dahle is contracted to work with the borough for two years. During that time, he’ll continue to train borough staff on how to implement a mass appraisal system.
Kreitzer and Dahle encouraged any residents who had questions to contact borough staff once they received their assessments in the mail. Assessments should show up in PO boxes at the beginning of next week. Property owners have 30 days to appeal an assessment after it’s been mailed.
“We would encourage anybody who has a question on their value to come into the office or call us,” Dahle said. “We’re happy to explain the steps that were done. Happy to look at details of their assessment, to check for errors.”
Average home values in Alaska communities are up 10% to 20%, part of a nationwide trend of rising property values the past few years as construction costs escalated, the supply of homes for sale was tight and buyers tried to close on deals before interest rates started rising last year.
Wrangell appears to have led the state with its 56% increase in assessed property values this year, but residents in Petersburg, Juneau and the Matanuska-Susitna Borough also are receiving significantly higher assessment notices in the mail this month. Like Haines, Wrangell’s values increased a lot more than any other community because the municipality undertook a comprehensive review of every piece of property in town. Many had not been reviewed in years, and borough officials said similar properties were assessed at different values, creating inequities and unfairness that needed to be corrected.
Assessments are what municipalities believe is a fair market value for the property, not a tax bill. The actual tax rates and bills will go out this summer after cities and boroughs set their budgets and determine how much revenue they need to pay for public services.
Assessors statewide look at recent property sales to help determine market values.
The average residential property assessment in Petersburg went up by about 15% this year, with land values for commercial lots going up 12% to 20%.
A company contracted by Petersburg reported residential property values 16% to 18% higher in Valdez, 5% to 15% in Nome, and 16% to 18% in Cordova.
In Juneau, the average increase for residential property this year is around 16%, according to Finance Director Jeff Rogers.
In 2020, the median assessed value for a home in the Capital City was around $429,000. In 2022, the median was around $527,000 — a 23% increase in just two years — Rogers told the Juneau Empire.
Matanuska-Susitna Borough Finance Director Cheyenne Heindel reported last month that residential values have increased an average of 18% over the past two years. A normal year would see a 2.5% increase, Heindell told Anchorage TV station KTUU.
This story includes reporting by the Petersburg Pilot and the Wrangell Sentinel