Broward County's tax appraiser discusses Topic A -- property taxes.
Q. Property values have skyrocketed, and taxes have as well. Yet we hear local governments say that taxes have been reduced. Have they been reduced?
Q. Why not?
A. Because it's smoke and mirrors. If a government says to you that they are going to cut taxes by 9 percent and they still get $120 million more money, who are they kidding?
Q. Is it because no one's minding the store?
A. What happens, what we found happened -- and I [saw] this as a School Board member and a county commissioner -- what happens is the property appraiser mails trim notices [assessments of property values] in August. We start about the middle of August and we mail 100,000 a day for 7 days. So everybody gets them between the 14th and the 30th of August. People think it's some kind of solicitation or junk mail. They open it up. They pay no attention to it. They toss it out. They don't consider it's real.
The governments all, I mean, who can attend a budget meeting at 5:01 p.m.? That's when the county always did theirs. I changed them, made them at night at Stranahan High School, and the only people that came were, like, the Sheriff's Department because they wanted more money for Corrections.
Average citizens don't come. They don't make them user-friendly. Then we started rotating, when I was a county commissioner, the chair, we had them at Western High School, or Piper High School But citizens still didn't come.
So what happens is everybody not only ignores not only the county and the School Board, but 31 municipalities, the South Florida Water Management District they ignore all these things. And then [on] the first of November, the county mails everybody their tax bills and we have to go to the [Emergency Operations Center] to answer phone calls.
We don't levy taxes
Q. So what do you do to make a difference?
A. In order to overcome that, this year we're starting to mail the trim notices with a letter I put in. It says this is a legal document. Look at your assessment last year and look at it this year. Look at your exemptions last year and look at them this year. If you see something is wrong, call us. If we can't satisfy your concerns, then file a petition to protect yourself. Look at what the county and cities are taxing you, and go to the hearing
The trim notice [this year] is a new one. I did it totally different, with a letter trying to urge you to go to budget hearings and to call me if there is a mistake
Q. But say I check the exemptions and they are all correct. I'm still getting affected by the values going up?
A. Yeah, but what it says, those trim notices say, if you disagree, here's the time and place of School Board [budget meeting]. No one goes to those hearings.
Q. But if the document is correct
A. Yeah, but the thing is, what if you disagree with the amount of money being levied for taxes? You're supposed to go to the hearing.
Q. You're supposed to fight city hall
A. Correct. That's how I got started.
Q. Fair enough. Housing sales are going down. The logic is that if demand slows, then prices drop. Logic should also say that if prices drop, then valuations drop and then taxes would be reduced. Right?
A. Correct, unless they increase the millage rate.
You have to remember we do everything backward. We do everything in arrears when we have to have our final tax roll to the department of revenue by July 1, those are the assessed values from Jan. 1, 2006, going backward to Jan. 2, 2005, because we're a year in arrears. Because the status we look at is Jan. 1 of every year. So if you buy a house today, in August 2006, we will not reassess that property until after Jan. 1, 2007.
So if you buy my house today, when you get your November tax bill you inherit my status because the status for the 2006 tax bill is really the status of that home from Jan. 2, 2005, to Jan. 1, 2006, and people don't understand that, either.
People that are buying a home today and applying for homestead, that homestead is for next year, not for this year. They don't understand that a) when they apply for the homestead, if it's after Jan. 1, it goes to the following tax year, and b) they don't understand, when they get that first low bill, when they inherit the previous owner's status, they don't understand next November what happens.
Those are two things we explain over and over and over again. They don't understand reassessment.
Q. So if I'm looking at any kind of reassessment or values dropping it'll be a year from now
A. Because what happened, actually, the only thing that held the market last year, I believe, is that through August 2005, I mean it was unbelievable. And then came Katrina and then came Wilma.
If you take a look at the housing market, it has a lot to do with the school system. If you haven't moved by the time school starts, because Thanksgiving, and Christmas, Hanukkah, New Year's are coming, and moms don't move. They dig their heels in and they stay there.
Then, after the holidays, in January, they start looking again and they look to move somewhere in the school year. Last year was the hottest real estate market we've ever seen. Speculators from all over the world buying up properties, running them up. Everybody, all the media hype, that we're running out of land, the build-up, there's not going to be anything. Then condo conversion. That's what saved the market last year.
But that condo conversion also had a dramatic negative impact on affordable housing. We had to do something. We had to come up with a way to do assessments for affordable housing
[There were apartment buildings near Holiday Park] and a group of business people, a business person, I don't remember, bought all those apartment buildings, four in a row, and they converted them from apartments to condo conversions
When they did that, now then what is a rental apartment building goes to a condo conversion, those sales prices, those market prices, have an impact on all commercial, similarly situated properties. We had to pull them out. Because if I hadn't pulled them out, and I said [to the building owners] if you've got three units or more, because a duplex is really a single-family home, and you have to go three units or more, if you believe you provide affordable housing we'll create our own market and income analysis for similar projects. But in order to do that, you have to bring us your leases, you have to bring us your rentals, you have to bring us your bank deposits and we have to review all those documents. We don't have to keep your proprietary information. But you have to come in and validate it. You just can't say, one guy said, I never do it -- it's on a handshake. Well, I said, that doesn't count.
Cause how do I know that we lower your assessment and include you in affordable housing rent and you go in tomorrow and raise the tenants' rent?
Q. All over South Florida, though, you now have similar houses in the same neighborhoods paying very different tax bills
A. They should.
Q. And the reason is simply when they were bought or sold. Why?
A. Because, let me tell you something, those young families today, when they go look for their first house they're going to buy, are pinching pennies, giving up all their entertainment, and working two jobs. So they need to know what they can afford. They've got taxes and insurance and everything figured in, and they're scrimping and saving. Their salaries are not growing with all these increases in property taxes and insurance. So if when they bought that house, the reason Save Our Homes is there is because if you didn't count it, and they know what to expect, in 10 years you could price that family out of their home.
Q. But that's happening now, in terms of keeping families from buying homes.
A. When that family moves in and makes a conscious decision to pay that money for your house, they know what that amount is. Do they want to know that if they pay that amount today, and 10 years from now, based on other people paying outrageous amounts of money for that same home, that it could triple their taxes or quadruple them?
Q. But if the homes are similar and the services are the same, why should one family pay more than the other?
A. It's just like with impact fees. I don't believe in doc stamps for resale of a housing product. If impact fees are going to work for schools and roads and everything, I buy my new home, that developer charges me the impact fees for the seats in the schools and the roads and the sewers, and then through my tax dollars all those years I paid to upgrade those things. Because right now the School Board today charges 2.5 mils, as a local option on all of us, for school construction. When I bought my house and built it, I built enough seats for my kids in the public schools, and through the years I have paid to renovate and keep those seats upgraded, when I sell my house and [someone else] buys it, it doesn't mean [that person] has to buy them back all over again, because I already bought and paid for mine. When that new housing product comes out of the ground it has to pay for the impact because the impact of my home is already paid for
Q. Is portability of Save Our Homes doable?
Q. How does it work?
A. Here is how this would work The portable amount is the difference between [your Save Our Home value] and your market value So if you look at the current year market value and you [subtract] your Save Our Homes value, that bottom number is how much portability you have to move to the next house That's how much you take with you to the next home.
And what that does is that allows you to be protected because of inflation. What happens is if you allow, and I hear that from everybody that question about same house, same neighborhood, we hear that all of the time, but that's what Save Our Homes was meant to protect. So people couldn't get priced out
Q. I agree But is there a way to bring some parity so we don't have these wild disparities?
A. Because the taxes are outrageous. Most people, our assessed values are 83 percent to 92 percent on average. It's supposed to be 100 percent in Florida but not really because we value real property and real property is the improvements in the land. If you look at my home, my biggest value is my land, not my building. My home was built in 1983 my land is far more valuable than the building so our assessed values are somewhere around 83 percent to 90 percent, but they are charging taxes on all of it. We have an effective tax rate that is higher than a lot of other areas
Look at what some of these families are paying If you buy an average home in Broward County, your taxes and insurance would have to be about at a minimum $18,000 a year, that's taxes and insurance. Now put on principal and interest.
What I hear from the mortgage brokers, the Realtors, the title companies, is that they can find them 30-year financing. They can find the financing product to meet every family for principal and interest. What they can't overcome is taxes and insurance
I can't go to 40 percent of the assessed value. I'm not allowed to by state law. And we don't create the market. Buyers and sellers create the market. And I don't have to be a soothsayer. I don't have to predict anything. Because on July 1, 2006, I was looking at Jan. 1, 2006, backward to Jan. 2, 2005. I didn't have to guess. We have the numbers and the statistics. I don't ever have to guess.
I can just see trends
Interviewed by Editorial Page Editor Antonio Fins
A longtime public servant in Broward County, Lori Parrish has served as property appraiser for nearly two years. During that time, Broward has seen property values skyrocket.
In this interview, Parrish speaks about the housing boom, why homestead exemption should be portable, and why citizens should pointedly ask if their governments really need all that extra tax money.Copyright © 2015, CT Now