Slice of Fitzhugh Avenue Illustrates DCAD’s Inconsistent Property Tax Assessments

It’s that time of year when most of us needed a bottle of Jack and a bullet to bite on just to open our property tax bills. Personally, my taxes are up nearly 52 percent in the past five years with this year alone squeaking in a nearly 13 percent rise. I’ve been increase-capped four years out of five.

One recent morning I saw a new listing pop in for a 616-square-foot home on Fitzhugh between Swiss and Gaston Avenues priced at $179,000. At $290 per square foot, I was curious, especially because as of this writing it’s under contract.

Turns out it’s a flip and bundled with 1001 North Fitzhugh, a 1,324-square-foot, three-bedroom, two-bathroom home adjoining and sharing a driveway with 921 Fitzhugh. Both properties were listed at $478,000 or $246 per square foot. (Investment properties, same owner)

Being the season, I decided to look at their taxes. What a story they told.

Last year 921 Fitzhugh was assessed at $45,000 with neighboring 1001 Fitzhugh clocking in at $96,380.  This year, because of the flip they’d jumped to $104,180 and $214,620 respectively. Fair dues … maybe … a lot of money was put into the renovations.   However if you compare the most recent list price of $478,000 (and assuming a 10 percent off selling price) with their assessed values, you’ll note DCAD is still likely off by over $110,000 or 35 percent.

But what’s super galling is that neither 921 nor 1001 had a penny of increase to their assessed values since 2013. What this tells me is that in smoking-hot Dallas, it took five years for DCAD to get around to reassessing these properties.  How many of you have had a five year break?

Looking at neighboring 915 Fitzhugh we see a home that been assessed at $64,970 since 2013 before increasing to $83,900 in 2018, a 29 percent increase that were it not also an investment property would take DCAD three years to fully implement (given the 10 percent per year increase cap).

Northern neighbor 1007 Fitzhugh is another investment property. It completely escaped a 2018 increase and is currently valued at its 2015 value of $77,900. In fact, in 2011 this property was assessed at $78,560 before dropping to $75,500 and only rising to $77,900 in 2015.

These neighbors’ increases make me wonder whether 921 and 1001 Fitzhugh’s increases were even the result of their renovations. In DCAD’s seeming Russian roulette of who gets increased, had this area’s time just run out?

But then there are the two investment properties on the corner at 4846 and 4842 Swiss that haven’t seen a penny of increase since 2012. I wonder, have these properties’ tenants seen a rent increase in the past eight years?

I would hazard a guess that if you picked any block in many parts of Dallas you would see the same carelessness and inequity in DCAD’s assessments.

Of course part of this is because Texas doesn’t require reporting of real estate sales in either residential or commercial property.  But that’s only one part and doesn’t include what I’ll call willful blindness.

Willful blindness is when DCAD realizes they can only raise the total amount of tax collected by eight percent per year (not counting new construction) without a public hearing and vote on the larger take. Because of this limitation, DCAD clearly picks and chooses where to focus their energies each year.

How else can you explain properties like these, across the street from the Swiss Avenue historic area, not seeing a penny of increase in the five years I’ve been hit with nearly 52 percent worth of increases?

When you go into fight your taxes, do a little homework. Use DCAD to trace the current and historical increases of properties hear you. Do their increases match your rate of increase? Was there work done to those homes? To yours?

The point being not to rat-out your neighbors who’ve escaped DCAD’s claws. The point is equality and fairness. We all know DCAD’s measurement tools are unlikely to hold up to public scrutiny, but having a conversation about where your property fits into a larger neighborhood may be worth having.

In the end, you may not win, but if you want to feel better, take a lesson from the call center industry. The most expensive asset are the human agents, taking up as much of their time as possible costs the company more. I would say the same is true of DCAD. You’re a taxpayer, take up as much of their time as you can. You may not win a penny of reduction, but just being there, asking questions, protesting their unfairness, it all increases their workload and ultimately adds costs.

Happy taxes. Your deadline for filing a protest with DCAD is May 15.

 

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016 and 2017, the National Association of Real Estate Editors recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email [email protected]. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.