West Bank property values could plummet
Property in Sunset Drainage District could fall by 60 percent
By Kyle Barnett - Apr 25, 2013
Even though parish property was reassessed only last year, West Bank residents may see lower property tax rates as early as July 31 if a reassessment goes through following a FEMA flood remap that may mean some have to pay tens of thousands of dollars more per year in flood insurance rates.
St. Charles Parish Assessor Tab Troxler said he estimates an average of 60 percent devaluation of homes and 20 percent devaluation of properties in the affected areas.
"My job, as assessor, is to determine property value for taxation services. We do that by watching the market. Our primary way of doing that is taking the market approach and looking at comparisons," Troxler said. "Since FEMA has put this out, our finding is this has caused damage to the market. We are assessing these properties using a different method because there is no market."
Given the housing market decline since the proposed FEMA maps were announced on April 1, Troxler said his office will be using an alternative means for assessing property values in the affected areas.
"The data, particularly in the Bayou Gauche/Sunset area, has been affected and basically there is no market," Troxler said. "I have to make a decision of what the market value is in those areas. If we continue to see no transfers or sales in that area then we have to change our way of tracking the market."
Only one home has been sold in the Sunset Drainage District area since residents learned that their century old levee would not be recognized under the new flood maps. In addition, residents face greatly increased flood insurance rates due to provisions in the Biggert-Waters Act, passed in July 2012, that disallows grandfathering. Currently, grandfathering provides existing homes with subsidized flood insurance rates if they met elevation standards at the time of their construction. Soon, homes that find themselves in flood zones for the first time will eventually be forced to pay high flood insurance rates.
"Some people get that confused. People say ‘are you lowering our property values?’" he said. "It’s not me lowering the property values. I am just reacting to what is happening."
Troxler said that making residents who can no longer sell their homes in the current housing market pay higher property taxes would be unfair.
"There is no way we can have a homeowner with this hanging over their head and ask them to pay these taxes," he said. "If we don’t make this change, I’ll have 900 angry people up here asking ‘why do I have to pay these property taxes when my property isn’t worth anything?’ I never want people to pay property taxes on value that does not exist."
The drop in property values would result in a projected lowering of the parish’s property tax base by $1.5 to $3 million.
A $3 million decrease in property taxes would mean a yearly decrease of $664,707 to the parish, a $152,000 cut to public works and $113,000 loss to the library system.
Parish spokeswoman Renee Simpson said while lost revenue would not be a lot in comparison to the parish’s overall budget, it would still be unwelcome.
"Parish government could withstand the current projected drop in revenue as it is reported by the Assessor’s Office today," she said. "That being said, it will not deter St. Charles Parish government from doing everything in its power to reverse the impact the maps and Biggert-Waters has already had on property values."
About half of any lost property tax revenue would come from the school district budget, whose revenues last year alone were $137 million. If the maps are approved, the school system would suffer a 1 percent decrease in revenues.
Jim Melohn, chief financial and administrative officer for St. Charles Parish Public Schools, said Troxler’s position is common sense.
"The school system understands the assessor’s need to properly assess the property of all taxpayers," he said. "If the value of homes in the area would be reduced, it would make sense that the assessor would be fair to the citizens living in that community and make the appropriate adjustment to the assessed value just as he would in a reassessment year."
Troxler said although he is prepared for the reassessment, he hopes he does not have to go through with it.
"There is nothing more I’d like to see than FEMA come back and reverse all of this," he said. "The market is damaged because of this release of information by FEMA, which I think is totally irresponsible. I would encourage people to fight for their rights and to end this injustice."
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