According to SFR’s analysis, of the more than 300 households in the city of Santa Fe that claimed the affordable housing credit, all but 53 have seen their values increase. They’re not small increments, either: The overwhelming majority of such homeowners saw increases of more than 5 percent in their home values. In extreme cases, home values doubled or tripled over just two years.
And all are outpacing their non-affordable equivalents.
SFR specifically examined current property tax assessment records for two subdivisions: Kachina Ridge in the city of Santa Fe and Aldea de Santa Fe in the county. Both mix affordable homes in with market-price units and, in each, the records reveal the same phenomenon: stagnant or decreasing values on market-price houses; astronomical increases for affordable homes.
In Kachina Ridge, a small subdivision with nine market-rate and 17 affordable homes on the tax rolls, the valuation differences are stark.
In 2008, not a single affordable home in Kachina Ridge was worth more than $200,000; developer Sproul says the affordable homes in Kachina Ridge shouldn’t be valued above $220,000. But the County Assessor’s office puts homes in Kachina Ridge claiming affordable housing tax breaks at approximately $295,000, on average. Market-rate homes, meanwhile, have stayed at approximately $220,000—and the affordable homes that didn’t claim a tax break are valued at less than $200,000.
To DeMack, that’s particularly odd given the similar features, floor plans and identical locations of market-rate and affordable homes in Kachina Ridge—not to mention Santa Fe’s stagnating real estate market.
Lois Sury, the president of the Santa Fe Association of Realtors, says that decline began in 2007 or 2008—and that two or three years is plenty of time for assessments to catch up with declining market values.
“On a whole, the real estate market isn’t appreciating,” Sury says. “Individual houses here and there, maybe, because people have improved them, but the trend has been that things have been going down.”
(DeMack says she hasn’t done anything to improve her home—“unless you count that $5 plum tree I planted.”)
Aldea, too, has its share of mismatched valuations.
On one particular street, Vista Precioso, four homes claiming the affordable housing tax credit have appreciated 6 to 7 percent since 2008, according to the County Assessor’s tax records. Three are valued at $419,860 and the fourth at $488,980. The market-rate homes around them are valued between $344,790 and $380,970—less than they were worth last year.
A fifth affordable home on the same street—valued at $419,860—is on the market for $279,110. (As it happens, that home is listed under Santa Fe Realty Partners with Paul Duran, one of two Democrats who ran against Domingo Martinez in the primary for the office. Benito Martinez, the other candidate, lives in affordable housing in Kachina Ridge, but does not claim the affordable housing credit.)
An Aldea resident, who asked that her name not be used because her property tax is currently under protest, says the only difference between the affordable and market-rate homes on Vista Precioso are their finishes—two-car garages, granite countertops, etc.
Loftin, who became acquainted with Aldea when Homewise helped fund approximately 20 affordable units there, tells SFR he’s surprised to hear that affordable homes of the same size, type and location would be valued so much higher than their equivalent market-rate properties.
“An affordable home, if it’s the same square footage and similar lots, it should be appraised at the same value,” Loftin says. “It certainly can’t be higher.”
SFR also spoke with residents at ElderGrace, a new Santa Fe Community Housing Trust affordable development off of Cerrillos Road that is not yet listed in the County Assessor’s database.
Home prices in ElderGrace range from $193,000 to $228,000. Most homeowners are retired or semi-retired. And many are seeing a time-compressed version of the same phenomenon that has played out in Kachina Ridge and Aldea over the past two years.
In Dorothea Matheny’s case, a $33,000 increase in her home’s value from the assessor is particularly galling.
Before she secured a loan, Matheny paid a total of $1,150 for two separate professional appraisals. Both were within $2,000 of her home’s sale price—$227,000 for a modest two-bedroom in a cooperative-living retirement community.
But when she got her notice of value this April, Matheny says the house’s value had jumped to $260,000.
“That was a shock,” Matheny says, shaking her head. “We moved into affordable housing because that’s what we could afford!”
Carroll wonders at the rapid increase, especially when many of the homes in ElderGrace aren’t selling.
“If the price for these units was way under, they would be completely sold out by now,” Carroll says. “They’ve been on the market since October, and they’re not!”
Community Housing Trust Executive Director Sharron Welsh tells SFR she’s received several calls from residents in ElderGrace (and other developments) who are concerned about their property valuations.
In ElderGrace, she says, people who had recently closed on their homes then received assessments and “saw significant increases over the cost they paid.”
Having increased assessments so soon after closing, Welsh says, is hard to understand. Mortgage lending appraisers operate under strict rules and regulations, she notes, so appraisals like Matheny’s are conducted in person and based on each unique property.
“Unless someone goes and conducts that kind of in-depth analysis, I don’t know how [one] could produce a better report than the actual appraisal performed for that house,” Welsh says. Every home sold in ElderGrace, she says, had an appraisal consistent with the selling price.
“I felt like I was ripped off, to pay for two appraisals,” Matheny tells SFR. “It sounds like [the county assessor’s staff] never even looked at the house. It’s ridiculous.”
That the county’s assessments are so much higher than all of the professional appraisals in ElderGrace, Welsh says, may be nothing more than an accounting glitch—but it stands to affect some of Santa Fe’s most vulnerable residents.
At ElderGrace, she says, “They’re seniors, and they’re on fixed incomes, and they didn’t count on significantly higher taxes than they originally estimated.”