Summit County property increases more costly for cheaper properties
Todd Bragg, the chief financial officer at East Akron Neighborhood Development Corporation, walked over to Executive Director Cheryl Stephens office after opening the first three of what would be about 250 letters from the Summit County Fiscal Office.
Each letter notified the provider of affordable housing options that the value of its rental properties would be going up — a lot.
“He stood in my doorway and told me what some of the increases were,” Stephens told the Beacon Journal. Twelve holding companies EANDC uses to own and manage 243 properties, or nearly a third of all the nonprofit agency’s units, would receive increases on their portfolios of properties from 59% to 129%, according to a Beacon Journal analysis.
“It literally could break us,” said Stephens, who called a law firm the agency keeps on retainer to fight soaring valuations that would inflate the new property tax bills due in January.
A Beacon Journal analysis of 194,614 residential properties comprising the vast majority of single-family homes and apartments in Summit County reveals an alarming disparity: the cheapest of properties would see the largest percent increases in valuation and, possibly, property taxes.
The state-prescribed process by which the Summit County Fiscal Office must adjust values every three years will slam cities like Akron and Barberton, where new values on average are forecasted to jump 39-40% compared to a countywide average of 31.4%. But within these cities, pockets of low-income, subsidized and affordable market rate housing units will see increases of 60% or more.
Property taxes will not increase in step with the valuation increases, but they will be more costly for most people.
Property owners balking on the new values, including retirees on fixed incomes, began the process of fighting back last week. At Summit County’s first meeting on Tuesday, county property appraisers opened their laptops at tables lining the walls of a community room at the Barberton YMCA as a steady stream of homeowners filed in for an appointment to understand why the county has upped their property values and what they can do about it.
To schedule an appointment with a fiscal office appraiser, visit fiscaloffice.summitoh.net or call 330-643-2710 or email firstname.lastname@example.org.
The increases, if left unchecked and uncontested by property owners, could cut into not only family household budgets but operating costs for landlords who could either at the extra cost, pass it along to tenants or scale back the housing they offer.
Public, low-income housing hit hard
Some of the cases uncovered by the Beacon Journal are eye-popping.
For example, federally subsidized apartments owned by Akron Metropolitan Housing Authority are often exempt from paying property taxes. But a couple projects, including 100 homes off Eastland Avenue built in the early 1980s, are subject to taxation because, in order to apply for a federal Low-Income Housing Tax Credit, they must be held by private companies, AMHA explained.
The values of these 100 single-family homes just inside Akron on the border with Tallmadge would jump from about $32,000 each to $91,000, on average.
“We hope to appeal it,” AMHA Deputy Director Debbie Barry told the Beacon Journal. Another AMHA project at Edgewood Village near the Akron Zoo is also in a high-valuation increase area.
“It would definitely impact us,” Barry said of possibly paying higher taxes, “because we’re running that project pretty tight as is.”
Thirty other homes built in 2013 by EANDC, which holds the properties under Moon Mallison Homes LLC, would see a 70% valuation increase.
In previous three-year cycles, EANDC and AMHA have successfully argued to lower their public appraisals for tax purposes. That success has kept the value of their holdings artificially low, which is factoring into why the values appear to be jumping so drastically in this cycle. Dominic Basile, the director of real estate and appraisal at the Fiscal Office, said of what’s generally behind some of the largest increases in the county.
EANDC uses a law firm to fight those increases. AMHA is optimistic that it will get some relief when it appeals to the Fiscal Office or, if that doesn’t work, the County of Summit Board of Revision next year.
But Barry is also worried about the impact on private landlords who serve tenants on housing vouchers. AMHA owns and operates about 5,000 apartment units and processes federal housing vouchers for more than 20,000 people living in 5,400 privately owned rental units. Private landlords in the voucher program, commonly called Section 8, would have to absorb operating losses from higher taxes, increase rents or sell of their assets.
But there’s a limit, and an added cost, to raising rent too high. AMHA as the voucher processor checks monthly rents for “reasonableness” — meaning landlords cannot charge too much over the market rate, which would go up with inflated values and potentially price some affordable housing providers out of the business.
Upward pressure on cheaper homes redistributes taxation
In an interview prior to submitting the proposed reappraisal spreadsheets to the state, Summit County Fiscal Officer Kristen Scalise and her staff told the Beacon Journal they were concerned that valuation increases, as they did in 2020, would hit middle and lower-income residents the hardest.
Scalise, as she also did in 2020, fought a new Ohio Department of Taxation requirement that limited her reappraisers to looking at only the last year of sales data, instead of the last three years.
Since the last reappraisal in 2020, 26,274 residential sold in Summit County. In 2020 and 2021, they collectively sold at 31% and 26% over their new county-appraised value, meaning they’re even more valuable according to the real estate market than their newly increased taxable values. But in 2022, the only year the state said the county could use in its calculations, sales brought in 56% above their new county-appraised values, which shows the distorting impact a single year of data can have compared to three years.
The Fiscal Office provided the Beacon Journal with every record it requested, included sales data so far for 2023. Through mid July, homes and apartments are continuing to sell 56% over even their new values, which won’t be officially set until the end of September after the Fiscal Office wraps up its last community Reappraisal Meeting and makes a final submission with adjustments to the state.
A countywide look at the data generally suggests that homes priced above $175,000 will see lower than the 31.4% Summit County average increase. Homes below $175,000 will see above average increases.
Tax bills corresponding to new property values will be ready in January. Any property with an increased value will see a proportional increase on the smaller portions of municipal, school district and other levies not approved by voters. Portion of levies approved by voters, however, are capped, meaning millage rates go down when property values increase so the levies collect the same as when voters passed them.
The Beacon Journal found that homes appraised at $50,000 or less earlier this year will see an average valuation increase of 50%-55% while new taxable values on homes previously appraised at $400,000 or more will jump 25% or less, on average.
These finding comes amid concerns, like those documented in an affordability study published by brokerage firm Redfin this month on the Cleveland market, that is now costs more to rent than pay a mortgage in some Northeast Ohio communities. A hot housing market supercharged by low interest rates during the pandemic appears to have had an outsized impact on renters who tend to occupy cheaper housing.
Reach reporter Doug Livingston at email@example.com or 330-996-3792.