Last year set records in lots of ways, and one of those was a stunning increase in local property values, according to the Hamilton County Assessor of Property.
The average gain in property values across the county in the 2021 reappraisal was about 26%, says Marty Haynes, who heads the Assessor of Property office.
The increase is the most since the reappraisal, which happens every four years, began locally more than 30 years ago, he says.
"We did see an increase in property values all across the county," Haynes says.
On the residential side, the increases were upwards of 30%, he said. Commercial real estate, while up sharply, didn't spike quite as much, with gains recorded at about 21%, the property assessor says. Together, that put the average increase in the 26% range, he says.
When it comes to residences, some municipalities in the county saw jumps higher than others, with Red Bank and East Ridge leading the way, the official says.
"Those have been good communities for a long time, and folks want to live there," Haynes says. "We had a lot of sales in both those municipalities and those homes sold for much higher than in the past."
BY THE NUMBERS
* 30 - Percent gain in residential values in Hamilton County in 2021* 21 - Percent increase in commercial values in the county* 26 - Average percent gain in property values across the countySource: Hamilton County Assessor of Property
Homes that sold in the $100,000 to $150,000 range were more numerous in those cities, Haynes says.
"Lower valued homes across the county increased at a more dramatic rate because there were a lot more sales," he says.
In terms of commercial space, values were impacted by the coronavirus, with more people working from home, Haynes adds. Also, with travel affected by the virus, hotels were hit especially hard, he says.
As property values go up, state law mandates that the overall revenue is the same after reappraisal, he says. That prompts local governments to adjust tax rates. The Hamilton County Commission approved a lower certified tax rate, which went from $2.77 to $2.24 per $100 in assessed value to offset increased property value.
Haynes says that about two-thirds of the county taxpayers paid about the same or a little less in property taxes.
But some sites, such as the city of Chattanooga, increased their property tax rate. The city's new budget approved last year included a 40-cent property tax increase above the newly certified rate, providing about $30 million more in revenue, officials say. The new rate is $2.25 per $100 in a home's assessed value, while the old rate was $2.27 per $100 in assessed value. Because home values in Chattanooga have seen a boost, a new tax rate that would bring in the same amount of revenue would have been $1.85 per $100 of assessed value.
The new income was dedicated mainly to improving the pay of fire, police, public works and other city employees, leaders say.
WHAT YOU’LL PAY
For a house in Chattanooga with a value that has increased to $175,000, the new rate would mean about $199 in additional city taxes this year, bringing the owner’s city property taxes to $984 and combined city and county property taxes to $2,194, officials said.
"I'm grateful to the Chattanooga City Council for partnering with us to lay the groundwork for tackling the structural challenges our community faces while we also get the basics right - all while ensuring our first responders and essential workers are paid fairly," Mayor Tim Kelly says. "With this budget, we're able to capitalize on the growth of Chattanooga's economy to ensure every resident has access to quality and responsive city services to keep pace with that growth."
With the climb in property values, the number of appeals by owners also rose last year, Haynes says. There were 600 appeals in 2021, up from fewer than 200 four years ago. But five different property owners who have multiple sites accounted for 60% of those appeals, he says.
HOME SALES
Closed sales in Greater Chattanooga Housing Market* 2021 - 11,556 (through November)* 2020 - 11,680* 2019 - 10,776* 2018 - 10,042* 2017 - 9,827* 2016 - 9,672Source: Greater Chattanooga Realtors
Countywide, property values on only about 2% to 3% were lowered after an appeal, Haynes says.
The assessor's office uses home sales to help it set values, and there were a lot of those in 2021, he notes.
"With more sales, we have more information," Haynes says. "We know what property is selling for and that makes it easier to arrive at a value. We work within the sales of a neighborhood."
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