Homes under construction in 2018 at Heritage Creekside in Plano.

Appraisals drive tax increases

Protests become more common

Legislative efforts

Since moving to Plano in 2015, Tammy Cordes has run a small business from her home in the Cross Creek community and invested time in community activities like Plano Citizens Academy. Until recently, it had not occurred to her that she would want to leave Plano.But rising property taxes may force her hand, Cordes said.Cordes, who is now considering moving elsewhere in North Texas, is hardly the only area resident to feel the pinch of swelling tax bills as interested homebuyers have bid up prices—and, indirectly, contributed to rising property taxes—for current Plano homes.Excluding homestead exemptions, annual property taxes for the average Plano home rose from $5,321 in 2012 to $7,683 in 2017—a 44 percent increase, according to the Collin Central Appraisal District.Because the state’s property tax system bases some local revenues on the state of the home market, even residents who do not intend to sell their homes are affected by residential real estate transactions. Bo Daffin, the chief appraiser at CCAD, said the district uses transactions of surrounding homes to determine the appraisal value of a property.“We are trying to reflect what buyers and sellers are doing based on their transactions, that’s it,” Daffin said. “We are looking at sales transactions in a neighborhood.”While some homeowners may benefit from being able to list their home for sale at a higher value than when they purchased it, Cordes said she believes the high property taxes are causing undue pressure on those who do not plan on selling their homes.“We should be overjoyed, but the property tax piece of it just feels like a big money grab,” Cordes said. “And I think that’s what’s kind of disillusioning people.”Homeowners are not the only residents feeling a financial squeeze. Rental home and apartment tenants are reporting higher monthly rent rates, according to the Assistance Center of Collin County, a nonprofit based in Plano that provides the city’s homeless prevention program.In 2012, the appraised value of the average Plano home was $243,135. By 2017, that value had increased to $352,496, or 45 percent higher.In Cordes’ case, she purchased her home in 2015 when it was appraised at $197,891, according to CCAD records. In 2016, that appraisal jumped to $251,654—a 27 percent increase. Her home is now valued at $281,964.When appraising a property, the CCAD looks at actions of buyers and sellers in the neighborhood over the past six to 12 months. Kelly Lintner, deputy chief appraiser of appraiser operations at CCAD, said it is important to have a true representation of home values.CCAD uses a comparable grid that allows the appraiser to find similar home sales in the same neighborhood, including new homes and old homes, but makes adjustments to the value given the property’s age, physical characteristics, location, quality and other amenities, Daffin said.But with appraisal valuations on the rise, some residents are opting to protest their home valuation as a way to curb growing property tax payments.More Collin County residents are going through the formal process to argue their appraisal values are too high compared with past years.The CCAD received nearly 63,000 residential property protests this year—up from nearly 59,000 in 2017. Of those homeowners who protested, approximately 13,000 came from Plano residents, according to the CCAD.In Cordes’ case, she has protested CCAD’s home appraisal twice, but to no avail.“I felt like I overpaid for this house just to get a house,” Cordes said. “So I protested the appraised values for the first two years and kind of got told, ‘Well, you’re lucky that it’s not even more.’”In 2017, Cordes enlisted the help of an outside property appraisal protest firm, but was again denied. She is using the same firm again in 2018 with the hope of finding relief in her property tax bills.Daffin said the high number of property appraisal protests is expected during a housing boom.“I think historically anytime you see values increase, you’re going to see an increase in protests,” Daffin said. “So, things went flat protest-wise when the housing bubble burst back in 2007 … but once the market started to recover and values started to increase again, then [we] have seen a natural incline in protest counts.”And that trend may be for good reason, said Sean Nance, owner and real estate agent with Team Nance Homes in McKinney.“To me, there’s really no disadvantage to protesting,” Nance said. “[The CCAD] cannot raise your taxes; they can only lower it or say, ‘We’re going to hold to the evaluation.’ So, if you were successful, then it would lower your taxes, and you would save a little bit of money.”The hikes in property taxes may not just be affecting Plano-area homeowners, however.The Assistance Center of Collin County reports that they have seen an increase in renters requesting financial assistance.“The city of Plano is a huge supporter of the organization, and we are the entity that implements their homeless prevention initiative,” said Yvonne Booker, executive director of the Assistance Center of Collin County. “We also implement that same initiative for the city of McKinney, as well. And then we have a state grant that is a homeless prevention initiative called emergency solutions, and that particular grant covers [Collin County].”For the first month, the assistance center offers 100 percent coverage of costs for qualifying individuals who applied for the rent or utility assistance programs. The assistance center reported a 53 percent increase in the number of rental assistance cases from 2016-17, and a 58 percent increase in utility assistance cases.“We know that the renters are having to shoulder more,” Booker said. “Now, I can’t tell you why … We just simply know that when we get our rental requests, we are seeing much higher rents than we have seen in the past.”Some Texas lawmakers have tried to slow rising property tax revenue increases as appraisals continue to climb.During the 2017 legislative session, Senate Bill 2 was brought to the table. Under the proposal, a special election would be called whenever local property tax collections increase more than 5 percent year over year.SB 2 did not pass during regular session or during a special session called by Gov. Greg Abbott. However, Abbott unveiled a plan in January to limit local government’s property tax revenue growth to 2.5 percent—half of the proposed limit in SB 2. The Legislature will convene next in January 2019.The Plano ISD board of trustees voted May 22 to approve a list of legislative priorities ahead of the 2019 legislative session. One of the priorities was in support of providing school districts flexibility in adjusting the maintenance and operations tax rate.Currently, Texas school districts are allowed to decrease their maintenance and operations tax rate without a tax ratification election, but are required to hold a tax ratification election if they want to increase that tax rate—even if the increase is to the rate previously approved by voters.“This measure will assure that public independent school districts have greater ability and incentive to provide local property tax relief,” the district’s legislative priorities document said.