Look for JoCo on the Go where you regularly listen to podcasts.

Time	Subject
00:26	Introduction
00:54	The county's role in assessing property values and how it works
05:39	What factors play a part in assessing property values?
10:38	The relationship between assessed property values and taxes
14:19	Assessments for business properties
18:53	When you can expect assessments to show up in your mailbox
20:08	Appealing your assessment

Theresa Freed 00:00

Johnson County property owners will soon receive in the mail a new assessment on this episode hear from the Johnson County appraiser about how values are determined and which areas of the county are seeing increases and by how much.

Announcer 00:13

Whether you live in or just love Johnson County Kansas, JoCo on the Go has everything Johnson County. Here's what's happening and what's coming up in the community you call home.

Theresa Freed 00:26

Thanks for joining us for JoCo on the Go. I'm your host, Theresa Freed, a Johnson County resident and employee of Johnson County government. Each year property owners can expect to find in their mailboxes their Notice of Appraised Value an important document that tells you the conservative value of your home in the current market. The NOAV will hit mailboxes next week. Here to talk more about that is Beau Boisvert the Johnson County appraiser. Thanks for being with us.

Beau Boisvert 00:51

Thank you, Theresa, for the opportunity.

Theresa Freed 00:54

All right, so we start with this question every time. But can you just talk about what the county's role is in assessing values and why we do that?

Beau Boisvert 01:01

Sure. The county appraiser’s office is required to establish the market value for properties as it relates to assessment and property taxes. So they call that ad valorem valuation. So we value it on a massive basis and not on an individual property. So therefore, we're valuing hundreds and thousands of properties, sometimes within a market area to establish the value of those properties. And then that number is utilized in the formula for calculating the property taxes.

Theresa Freed 01:35

So what does that process look like? I'm sure you're not just doing this right ahead of sending those out. So what does the whole year look like when you're gathering all that information?

Beau Boisvert 01:46

Well, we pretty much start right after we get done with certifying the roll on June 1 of every year, we certify the roll that's going to be sent over to the clerk and then on to the different jurisdictions to figure out what they're going to need to calculate for levy. So what we do is from that point on, we then start the next year. So June of 2021, we then started working on creating finalizing our values for this year, which is 2022. So we go through the year, we look at all the all the sales, we feel check them, we make notes, if there's changes that need to be done, we go out look at new properties that got created through permits, primarily new construction, remodeling. And then we then update our records based on what we see when we go to the field on those. And then we then have an accurate amount of detail as it relates to what kind of property it is, how much square footage it is, the quality of it, the different components that are involved in that particular type of property. And then we go to the sales. And we establish an adjustment based on the different components as relates to each of the sales. And then we figure out those adjustments. And then we start applying those values, adjustments to the properties that don't have that have those components but didn't actually sell. So therefore the whole county is revalued every year, which is a requirement by statute. So therefore, we are creating new values every year based on the sales that occurred, especially in the residential area, he's actually called sales comparison approach or looking at the sales of like properties. And adjusting those values. Commercially, we can use sales approach, but a lot of times we use the income approach, because that's how commercial properties are traded in the market bought and sold. And they're built to generate income off of the rents of the of the people who rent the property. So therefore, we use an income and expense formula. And therefore we recalculate based on that income information we get. We hire an outside firm to do a number of studies, along with our internal studies. And then we put it all together and come up with what we think are reasonable adjustments by the market, then once we establish all of our values, we then go back and make sure our values are within 90% or 110% of the median value of that same property. So all homes that are in, you know, say Leawood, we establish the market area there, we look for the median sale price or the median value, that we make sure all those new values are just in that window of 90 to 110% of that median value. And then we make those adjustments to the properties to be that way. So they're not all exactly. And 90% or 92%, they're gonna be in within that range of 90 to 110% of the number we pick. And that number is usually about 92 to 94% of the real market.

Theresa Freed 04:47

And that amount is arbitrary right? And that's something that's established by statute, I assume.

Beau Boisvert 04:54

Yeah. So the State of Kansas has a statute that requires us to value the properties across the board based on what the market was there last year, and then established the new value of the properties based on what the market says they would be worth if they went on the market and sold for the same timeframe. So we're looking at that ratio being 90% of the market to 110% of the market, whatever that market number is, we pick, let's say, we pick, you know, $400,000, we need to have the majority of our properties within 90% to 110% of that $400,000. And then we are graded by the State Department of Revenue as it relates to our accuracy of establishing the values.

Theresa Freed 05:39

And so this year, like the year before, I'm sure has been kind of strange in terms of the housing market. I think, you know, last time we talked, it was certainly a seller's market, low inventory, and then on top of that you have building costs have just skyrocketed. And so how did those factors play a role in your process?

Beau Boisvert 06:03

Well, what happens is, is we're in a county that hasn't changed much from last year three. So that is, we don't have a lot of inventory. And what I mean by inventory, we don't have a lot of options out there in the residential community to pick from when we go out to purchase a house, because what you do is you use a principle of substitution. If I have two houses that both have three bedrooms, two baths, they're both about 1800 square feet, they both have the same basic quality, they're about the same age and price are an age and construction, I'm going to buy the one that's lower in price. Well, that only works well when you have enough inventory, say four to six months of inventory, to maintain the prices stay low. What we have here is about two months worth of inventory. And so for every house that goes on the market, there are four to five buyers wanting that same house. So now what you are is what they call a seller's market, which means the seller puts it on the market for 400,000. But when the five people bid for the house, he's going to end up or she's going to end up getting the house for probably 415 424 25, depending how bad that group of people want to buy that house. So that becomes the market value of whatever the sale price is, they may only ask for 400,000. But they actually got 420,000. So the market is the actual purchase of the property, the purchase price, not the asking price. So that's what we've seen a lot of the last couple years, and this year, was definitely a year of the buyers’ market, there was a lot of people trying to move in to Johnson County, for a lot of good reasons. But because of the need desire to be here, what we call the demand, there wasn't a supply to balance it. So therefore the became a bidding war for those homes that were on the market. And there were a lot more bitters this year than they were last year. So therefore, the increase went up significantly, went up about 11% For the average on a residential home in Johnson County, because of that demand for wanting to move here.

Theresa Freed 08:18

So when our homeowners open up that envelope that gives them that appraisal value, tell us a little bit about those trends. So more of what we're seeing are certain areas going to be seeing a huge spike are some areas going to be seeing moderate or a decrease?

Beau Boisvert 08:35

Sure. So when I say the average is 11%, the 11%, basically, and I'm rounding the numbers, because we'll forget about decimals because we'll forget what those are. Eleven percent is a good round number to work with. What happens is we take in the overall county average. So that means you have areas that went down that went up a higher percentage of that somewhere in the 15, 18, 20 percent range. And then you have some areas that only went up to 3 or 4%. But the 11% means that there were more homes that went up in the higher percentage range, then on the lower percentage range, because we take all the sales, and we could compare that sale price to last year's value. And then that's how we establish that percentage. So we're looking this year at 11%. So DeSoto area, Spring Hill, those two areas saw significant increase. Now, because they're significant increase, you're probably in the 15 to 20% range. They also had the lowest values to start with. So they were more in the 200,000 maybe low $300,000 range for a home. So when they go up 20% or 15% It's not that big of a number compared to a house in Miriam or Leawood that's at $500,000 and went up 15 or 20% So sometimes the percentage increases sound scary. But until you actually math out the exact dollar amount, you'll find that a lot of times those increases sound bad, but they're not really that big of a difference when you actually look at the dollar amount that goes into that increase. But those are the areas we saw the most was Leawood. Of course, so DeSoto and Spring Hill in springtime DeSoto. Why? Because mostly because they had affordable housing compared to most of the rest of the county. So I think that's why they became the hotspot, so they had the bigger increases.

Theresa Freed 10:38

Okay, good information and a little bit of a preview before people open those envelopes, I guess. And I know, this can be sort of difficult information to stomach right now. Because we're seeing those increases. I know, for example, you know, my mortgage payment went up $100 A month last year. And so that was, I shouldn't say surprising. But it's difficult, you know, a lot of people are on fixed incomes and have a tight budget, especially right now with the economy the way it is. So, I know you don't have a role in the tax part of that. But we always like to educate our listeners about that delineation between taxes and the appraisal. So if you want to break that down for us?

Beau Boisvert 11:20

Sure. So there's a formula for creating property taxes, and it starts off with the establishment of the market values of all the properties. So, we established that market value. And let's just say we came up with, you know, $100 billion in value for that particular for Johnson County, which is actually what about what we are, we're about 106 million this year. So that's a lot that sounds like a lot of money, well, then you take that, that number, and you break it down by the assessment ratios. So residential is 11.5%, commercial is 25%, AG is 30%, or 25%. And under 30%, for the Miscellaneous, when you take $100,000, and you multiply it by that ratio, you're only paying taxes on the ratio portion, what we call the assessed value. So out of $106 billion, the assessed value may only be $13 billion, or $14 billion. And right now, I'm just ballparking what that number is, because I haven't taken the time to figure that out yet, in our report. So let's just say $13 billion, that's the number out of the whole county value of 106 billion, that actually gets used by the taxing jurisdictions to establish their tax levy, or their mill rate. So what they do is in take the 13 billion divided by their, say they have 5 billion as a whole, not just individually, but as a whole $5 billion for the actual dollars after you pay the property taxes, when you divide the 5 billion by the 13 billion, and you get a recent ratio should be about point four, five something percent, that would be your tax mill rate, if nothing else changed on what was needed. So that's the number that people a lot of times I think need to look at, they need to think of it as kind of like a teeter totter. When the values go up. And over here, the city or the school or the county doesn't need more money, then the levy will come down to accommodate that, that $5 billion. If they need more services, then it may still come down, but not as much to cover the new services. Because there's always these services being asked for too by the public. So that's how it kind of works in terms of property tax assessment, it’s a teeter totter. Value goes up or down. And the other side of the teeter totter goes up or down, corresponding to that number. But everything goes back to what the jurisdictions need to run their businesses. And that, of course, is something only the jurisdictions can answer. My job is just to make sure my office provides accurate, fair valuations of all property. So they're all treated the same in the taxation process. And then other people take you over to deal with the actual tax levy of the mill rate, and the dollars being collected.

Theresa Freed 14:19

And so when we're talking about properties, I know you were heavily focused in on this episode about homeowners. But can you talk about when we're talking about business properties as well, kind of how you guys separate those out? And when, when the evaluations come out for both of those things?

Beau Boisvert 14:37

Sure, yeah, no problem. Basically what it looks like in this year is we're going to have about 70% of the tax base for property tax will be residential. In there. 30% will be the tax base for commercial. So commercial was the other piece of the puzzle. That's, of course, your businesses, industry, the things that the jobs that we have we all work for companies, even if we’re working for the government, it’s still technically a company. A company might be private, it might be the public sector, but it's a company. So what we're doing is we're having to run our business. And so those are valued a little bit differently, but they still come up with the same issue and that is having a market value. So commercially, as you know, we've gone through the pandemic, even though the residential market stayed strong, commercial had a lot of issues. The last first year, we had most commercial went down, except for industrial last year started to improve a little bit with some of the property types. This year, we're seeing some more improvement. But we're still not where we need to be so industrial. They were very strong again this year, they didn't go down at all multifamily, a lot of apartments are being built, there's a lot of heavy market for apartments, multifamily living. So those mark, that market went really strong in terms of new construction, and also the market being strong there. Retail is a mixed bag, you could be in a in a strip mall or shopping center. And there can be one store doing really well. And then down two or three stores, there could be one, it's just basically hanging on to survive. It's because of the services that they provide, I think a lot has to do with it. The fact that COVID reduced the ability to be out in the public a lot. And the issues with that with the mask wearing and all that I think caused some issues for the industry to do well. So they struggle retail-wise, just depends on what type of retail you are. Office, is still a mixed bag we had very little new office space built this year. Bottom line is, I think the office world businesses are trying to figure what the model for running an office looks like. We've now been in COVID for two years, remote work has become part of life. And I think we're all struggling with the decision even in in government, how do we run our offices and our businesses with the situation of remote working now an option and being relatively successful. So, it's going to depend a lot with them as to how they decide their business model is going to look. So, I think they're struggling because I don't think they have an answer yet as a whole what their future looks like. And then of course, hotels, they're still in really tough shape. They, without traveling, very little extra activity going on. Because of COVID restrictions travel, the hotels have been basically 60 to 70% Fill. That's unusual for the hotel business, especially when you go through a summer, they haven't gotten much better. They're still struggling. A little bit of positive there, but not as much as we would like to see. And I'm sure not as much as they like to see. That's what is doing well, the entertainment industry, still struggling. Theaters, you know, dinner theaters, AMC theater, movie theaters, game places are all those are all struggling as well still. So it's just a mixed bag in commercial, we did see a 6% overall increase in commercial, which is a positive compared to previous last few years. But it's still hard to tell how long it's gonna take for the commercial part of the of the pie to be back to normal, whatever normal ends up being. I think that's also part of our struggle. We don't even know what normal is anymore now after two years, because who would have thought and homes will be selling at 11% above last year's values during COVID. But yet, that's what happened here because of the inventory issues. So just kind of a strange place to be right now.

Theresa Freed 18:53

And very, very interesting times, for sure. And I'm sure new challenges for your business your industry all the time too. So what exactly will homeowners and then the commercial side of that see those values come in their mailboxes?

Beau Boisvert 19:11

So, sure, the commercial ones were mailed on February 14. And so their appeals cycle started, they got 30 days, and they need to turn their appeals in by March 16. A date stamp of course for that. And for the mail in residential we're mailing next Monday, the 28th and then they're cut off for appeals will be March 30. So that's kind of the window for the appeals process coming up. I encourage people if they really feel like the number doesn't look right, when they look at activity in their neighborhood, they should file because you never we could have something wrong. You never know unless we look at it. I will tell you that for those that do appeal, we get a relatively reasonable percentage that does get an adjustment because we're doing mass appraisal, we can’t hit every property exactly right. And so that's why the appeal process exists. So we can get our records right.

Theresa Freed 20:08

And just so people know, how do you go about making that appeal?

Beau Boisvert 20:12

Well, on your form, the backside of your form actually has the document to fill out as your appeal form basically in the same notice. So you fill it out, mail it in, we have a drop box out front, that you can drop off your appeal for review. We have multiple ways to do an appeal. There are in-person wise, they're somewhat limited, due to the issues with COVID. So, we're encouraging property owners to have a phone call meeting, or actually do what we call a hearing based on evidence. They provide all the evidence, we do the review, and then we just send back our answer, then they can always call and have a conversation at that. If there have questions about that. Then we'll deal with all the appeals. And now but that's the way we're kind of handling this year, or the in person is just going to be a little bit tough to do because people are still worried, leery about COVID, and is still not technically gone. So, we want to, you know, obviously keep a safe environment as well, too. So, we're looking to do most of our appeals off of the other two processes. But it's all right here in the form, read it over, fill it out. If you do have questions, by all means, give us a call

Theresa Freed 21:25

that sounds good to end. The notice of appraised value people will get in the mail, of course, but that information is also available online. Is that right?

Beau Boisvert 21:33

Correct. If you go to our website, and go to the AIMS mapping, you can then look up your property. And then when you click on it, you can get the information on your property, one of the things on that information is the value for the property. So you can look at it that way. That's another way to look at it. And there's a lot of people who use the AIMS mapping system to get information about their property. So we also give you a basic information of how we've listed the home as well.

Theresa Freed 22:00

So okay, very good. And just so people know, we recently changed or updated our website at JOCO gov.org. And that property data search link is still available on our homepage, you just need to scroll down a little bit. And if you have any trouble finding it, just let us know. But great information on that that site, there's lots of details about your property that you may not even know exists. And of course, check back there every year if you don't happen to receive your notice of appraised value in the mail or if you just want to take a peek at it online. So, thank you again for being here. As always very good information. It's always nice to give people a heads up when they what they can expect coming in their mailboxes. And I think you know, as time goes on, we have no idea what the market will do. But we'll keep checking back with you to see what's happening. So, thank you for being with us. You're welcome.

Beau Boisvert 22:53

Thank you, Theresa. And again, I have an open-door policy. So, anybody in the public is welcome to call, set up an appointment come in. I can talk to a community group as well. So, we're here to help him to serve.

Announcer 23:06

You just heard JoCo on the Go. Join us next time for more everything Johnson County. Have a topic you want to discuss? We want to hear from you. Follow us on Facebook and Twitter at JoCoGov. For more on this podcast visit jocogov.org/podcast. Thanks for listening.