COMMERCIAL PROPERTY OWNERS SEEING LARGE INCREASES IN APPRAISAL VALUES

  

Commercial property value notices were mailed out last week, and the Washington County Appraisal District says this year’s values may come as an unwelcome surprise.

Chief Appraiser Dyann White estimates a 30 percent increase in the average commercial value across the county.  She says while all commercial property values are rising, the largest increases are in downtown Brenham, apartments and self-storage, whose total values are jumping from $20 million to $50 million.

White says a major reason for the difference between residential and commercial appraisals this year is “a real boom” in the downtown area, with sales, beautification projects and improvements to walkability all factoring in.

 

 

White says reported sale prices reflected dramatically higher values than last year’s appraisals.  In addition, the State Comptroller’s property value study showed that commercial appraisals were too low.

Public sales records in downtown provided by White were properties at 101 West Alamo Street, sold in April 2021 for $780,000, and 117 West Commerce Street, sold in July 2020 for $500,000.

White believes this is “the first comprehensive reappraisal that’s been done to downtown in quite some time,” at least five years.  She also says there are more sales to examine and data to look at when considering residential reappraisals.

White says to keep in mind that most local tax rates should decrease to reflect the higher values.

 

 

The deadline for commercial property owners to protest is July 25th.  White says her office has received 2,500 residential and commercial protests as of Tuesday, and expects it will see 3,000 in total.  Last year, there were 1,500 protests.

Appraisers are available for walk-ins to discuss appraisals with property owners Monday through Thursday from 9 a.m. to 4 p.m., and Friday by appointment only.

 

A news release from the Washington County Appraisal District concerning commercial appraisals can be seen below:

On June 24, 2022, Washington County Appraisal District mailed 1316 commercial property value notices.  The District acknowledges that values reflected in this year’s notices may come as an unwelcome surprise to many owners of commercial property; however significant changes are necessary to appraise at current market value as required by law (Texas Property Tax Code 23.01, Texas Constitution Article 8).

Reported sale prices reflected dramatically higher values than last year’s appraisals.  The State Comptroller’s Property Value study also showed that commercial appraisals were too low. 

The number of ownership changes reflected in deed records show the market is healthy and there are many willing buyers and sellers.

Rapid increases in construction costs from inflation and shortages of labor and raw materials have not slowed the pace of permitting for new construction.

There exist no excessive levels of vacancy, and there exist indications of rising rental rates.

Interest rates remained extremely low on the appraisal date.  Sources of investment capital are largely unconstrained were tolerant of risks.

The District performed comprehensive inspections of almost all commercial property. In particular this included downtown areas of Brenham, Burton, and Chappell Hill, retail, self-storage and boat storage, and apartments including duplexes/triplexes/fourplexes.  These inspections were of building exteriors and may not reflect the condition of the interior or any structural problem if they could not be observed.

Efforts were made to accurately and consistently classify similar properties. 

Commercial properties showing the largest increases in appraised value are the downtown areas ($22.2 million in 2021 to $53.4 million in 2022), apartments ($22.2 million to $50.2 million in 2022) and self-storage ($20.3 million in 2021 to $50.4 million in 2022).

The District is sympathetic to commercial property owners, especially as they have had to contend with economic volatility in recent years.  We recognize that businesses do not have the same protection from increases in the level of appraisal that most homeowners have.  However, the District must uniformly apply the Texas Property Tax Code as it was intended by state legislators.

The protest deadline for owners of commercial property is July 25th.  Property owners are encouraged to review their appraisal notice and to bring forward any concerns if they feel that an oversight may have been made.

When submitting a protest or visiting with an appraiser, the District requests that commercial property owners bring supporting evidence.  This may include rent rolls, profit and loss statements, photographs of the property and any issues affecting its value, or estimates of the cost of repair.  For properties that have sold in recent years, closing statements, fee appraisals or inspection reports are requested.

The District appreciates your patience as it works through a heavy volume of protests. 

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5 Comments

  1. This problem goes beyond high taxes. The problem is small businesses and middle-class individuals are being squeezed out of Brenham. Local government policies are not favorable to small businesses. This means small businesses close and the “Wal-Marts” take their place. By the way, the “Wal-Marts” don’t care about the community, they don’t pay employees well taking profits out of our community, and they don’t have to care about customers because they become the only game in town.

    Home prices are too high for the people making middle-class incomes so they have to settle for shabby houses at a high price. Lower-income have to rent shabby places. Brenham is becoming a wealthy “country club” community with no room for the rest of us.

  2. I read a magazine article not long ago that stated Brenham had a higher cost of living than almost any other city in the state including Houston, Austin and Dallas. We can’t earn enough money to survive on and we pay out the nose for everything. Our leaders make sweet deals for out of towners coming in to buy property/start businesses and people whose families have living in Brenham/Washington County for generations can’t catch a break. Heaven help us.

  3. “The number of ownership changes reflected in deed records show the market is healthy and there are many willing buyers and sellers.”

    …and yet the average median household income in Washington County is less than $60,000. All the “buyers” coming in are corporate chains that can afford the ridiculous prices “reflected” by the absurd, appraised value. The “average median income” here cannot sustain the current housing market, and when the commercial property value inflates, the rent is raised to offset the cost, forcing tenants to raise their prices to offset costs while the value of the dollar is devaluing and thus has less purchasing power to offset the market value…and then high fuel costs are further forwarded to customers to offset the costs of higher shipping. This will phase out the small business owners and moderate-income families, but judging by the lukewarm reception of the “powers that be”, the districts’ “sympathies” fall flat. Even the County’s own employees, or BISD employees, City employees, BLINN, ect., are predominantly on five-figure incomes that will not offset the higher cost of living.

    If this is the County’s idea of a “healthy market,” then this suggests that they are not “sympathetic” to the fragmentation of the “middle class.” We have pleaded with the State legislature to revisit and change the Tax Code, but our requests have been met on deaf ears, and if the County was “sympathetic, then they would not have raised their tax-rate for next year. They shrug-off the problem of people coming in to inflate the housing market, consequently inflating everyone’s property taxes.

    The local area wants this town to grow, but the market is going to phase out their own work-force because they cannot afford the housing. This would not be a problem if the median income kept up with inflation, but this is not the case. The County (not to mention the State) will not adopt the same discipline that is going to be expected from the rest of us to cut costs and/or slow spending. The system is broken, but those whom are supposed to represent us is not interested in fixing anything.

    1. We the people insist elected officials stop the stupid spending like the rest of us are forced to do because most of us are to the point where we have more month than we have money. Good job Citizen.

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