Last week, SFR met with Santa Fe County Assessor Domingo Martinez about our June 23
unjustified escalation in affordable housing valuations.
Read Martinez' and Chief Appraiser Daniel King's responses after the jump.
In this week's paper, Santa Fe County Assessor Domingo Martinez reveals that the marked increases in affordable housing valuations—
a trend SFR
—is the result of trying to update property values. In short, Martinez' office installed a new computer system in 2009, and they're still in the beginning phases of uploading values for every property in the county.
King told SFR he placed a priority in uploading data for three kinds of property values: sales, splits and affordable housing. The first two cases are easy to understand: When a property undergoes a sale or split, the assessor's office is legally bound to assess its market value, so it makes sense to go ahead and put it onto the new computer system at the same time. But why affordable housing?
According to King, it has to do with market values—which he needs to calculate taxes for affordable homes.
fair market value:
what a piece of property is worth on the market (based on recent sales of comparable properties)
the portion of market value on which an assessor can actually levy taxes
In New Mexico, a tangle of laws and programs complicate property taxes. One law requires that
not more than 3% a year
—so even if a home's market value appreciates rapidly, the owner's taxes won't go through the roof. In practical terms, that makes King's job easier: As long as he knows that market values sufficiently exceed taxable values (whether from current or historic appreciation), he can just increase taxable values by 3% each year.
But with affordable homes, according to a 2008 law, owners pay taxes
only on what they originally paid
—the market value, minus a city- or county-sponsored subsidy. So King needs to know the market value to know the weighted subsidy—which he'll in turn subtract to get taxable values.
Or, as King puts it, "If I don't make sure an affordable home is at market [value], we don't have a right taxable value."
The crux of all this? Before the new computer system, Martinez' office
didn't have a place to record market values.
But that wasn't a problem until 2008, King says, when the affordable housing valuation law went into effect.
"The software never had to deal with affordable housing," King says. Now it does—and even though the new system has a spot for recording market values, King has already seen glitches. Earlier this year, "It wasn't calculating affordable housing right" for homes sold in 2009, he says. And not every affordable-housing property is in the new system yet, which could make for value disparities or assessment errors.
In the case of Deborah DeMack, whom SFR profiled for the June 23 story,
"She was trended up when she probably shouldn't have been,"
King says, referring to DeMack's astronomical increases in taxable value.
In other words,
her home in southwest Santa Fe was swept up in what looked like regional property appreciation.
The non-affordable homes around DeMack weren't reassessed, leaving her with value increases that dwarfed her neighbors'. The clincher, King says, was that
she didn't protest
her 2009 assessment—so the assessor's office assumed that everything was fine and increased her value again in 2010.
King says the assessor is "required by law to try" to raise as much as possible in property taxes.
"It's not like we're trying to hit 'em,"
King adds, of affordable housing program participants. But until everything is incorporated into the new computer system, he says, there could be errors. The only way for the assessor's office to see them, Martinez and King maintain, is via valuation protest.
"If you don't submit a sale [as proof of your home's initial market value] or [are] touched by a protest,
you might get screwed,"
The 2010 protest period has expired, but
King agreed to take calls from any affordable housing program participant who believes his or her home his incorrectly valued.
Martinez, for his part, has promised to begin a countywide, in-person reappraisal campaign in 2011.
Contact King or Martinez at