Pandemic likely to have little impact on city property values

Pandemic likely to have little impact on city property values

Business profitability not a big factor in assessing property values

Red Deer property assessment values have been sliding sightly for the past three years.

But it is too soon to speculate whether the trend will continue, said city assessor Maureen Cleary on Wednesday.

And while the pandemic has had huge economic repercussions, its impact on the value of homes and businesses is limited.

“While it has been a very unique couple of months, our assessments are based on mass appraisals and typical market values,” said Cleary.

Assessors pore through up to three years of property sales data, followed up with further information requests to both residential and non-residential owners. They also collect data on vacancy rates.

That mass appraisal approach has a tendency to smooth out large swings, up or down, in property values.

“That provides a little bit of stability there, because where we may see one-offs here and there, if it is not indicative of the entire market, then you won’t see the massive shifts.”

The way properties are assessed also means that they are not greatly influenced by the profitability of businesses — many of which have taken a big hit from health-related closure orders and other restrictions.

“Even though a restaurant itself may have seen a decrease in profits, it’s really about that property’s lease rate and what they’re paying to rent that property,” said Cleary.

Property assessments are based on the value they had on July 1 of each year.

Based on that measure, Red Deer’s average home value fell two per cent last year. The median value of a single-family detached home is estimated at $324,700 for 2020, compared with $330,600 a year ago.

Residential townhouses, duplexes and condominiums decreased by an average of three per cent, while non-residential industrial properties decreased by 1.5 per cent.

The retail sector fared better, with assessments increasing an average of two per cent.

Work has just begun on tabulating assessments that will be used to set next year’s property taxes.

“We’re just in the process of gathering data right now,” said Cleary. “Our analysis will start in the fall, with completion of our assessment valuation in December.

“I’m not really able to speculate on what impacts we’ll see on our assessment base this year.”

City assessors appear to have a good record of getting values right.

Only 74 assessments out of 42,000 properties were appealed this year — 56 non residential, 16 multi-family and two residential. That was down from 94 in 2019.

The decrease was a result of the city’s introduction of a pre-roll consultation period last year. Running from mid-October to the end of November, property owners have an opportunity to work with city assessors to determine market values before the final assessment notice is sent out.

“By securing assessment agreements with non-residential property owners in advance of the property assessment notice mailing, these taxpayers will be better able to anticipate their share of non-residential property taxes,” she said.

One quarter of non-residential property owners took advantage of the consultations last year.



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