The City and Borough of Juneau on Friday released its annual assessment report and sent out property value notices to Juneau owners, informing them of the annual assessed values of their property.
According to the CBJ Finance Director, Jeff Rogers, the average increase of residential assessed property value this year is around 16%, including new construction, but noted it can vary depending on location.
“There’s going to be a ton of frustration about the assessments, but at the same time, people who are frustrated should talk to people who bought or sold houses in the last two years,” he said.
According to city data, in 2020 the median assessed value for a home in Juneau was around $429,000. In 2022, the median was around $527,000 — that equates to a 23% increase in just two years.
For some properties such as the Flats neighborhood area, owners could see as low as a 10% increase. For other neighborhoods like in the downtown and the northeast Mendenhall Valley areas, owners could see as much as a 21% increase.
However, for some residential property owners like Daniel Glidmann, the assessed value of his home on 2nd Street in South Douglas rose nearly 42% — the largest spike he’s seen since building the home in 2001. He said speaking with his neighbors, they also saw a similar increase.
“Everyone’s outraged,” he told the Empire Monday morning. “There’s no way it went up 40% in one year, that can’t be accurate.”
Rogers said the main factors leading to the higher property values include the growing number of buyers in Juneau with few homes to actually buy, the increasing inflationary pressures on transportation and labor and low liquidity in the marketplace.
“Some people ask, ‘Where does this come from?’ and it just comes from a mathematical review of known sales,” he said. “We look at what houses are actually selling for and we compare them to their assessed value and not surprising, the growth in property values in the last two years has been extraordinary.”
Commercial property assessments also saw a 6% increase overall, which is dramatically less than the previous year when assessments for all commercial properties were increased by 50%.
In the 2023 fiscal year, CBJ collected about $59.3 million in property taxes, with $30.8 million — 52% — going to the Juneau School District and 6.9 million — 12%— going to debt service payments.
According to the city’s news release, the city only has the sales prices for around half of the 600 residential sales in Juneau. Rogers said moving forward, because of the October decision by voters that repealed a 2020 city ordinance that requires disclosure of the property’s sales price, the city’s assessor will likely be working to assess properties with less data.
“When you have an environment where property assessments are disclosed, the assessor’s office has better information, it has more information that it needs to make those decisions,” he said, “When you don’t have disclosure, the assessor has less information. Mandatory disclosure does not result in higher assessed value or lower assessed values, what it does result in is assessed values that are more accurate.”
Rogers said each year the assessor works to be more equitable and accurate on assessments, but with the absence of disclosure,the assessor likely has to do more guesswork to come to its conclusions. Rogers also reiterated that assessments do not determine the level of property taxation.
Property values provide a base for property tax, and during the Assembly’s upcoming budget process, members will decide on a mill rate which will determine just how much tax citizens will pay. Though the property assessments were recently released, the resident’s individual property tax bill won’t be released until June.
Rogers said he is proposing three options for how to set the mill rate in this budget process, including a flat mill rate, a lower mill rate and a mill rate that can be calculated to fund the expenditure growth in the budget only, without taking in any surplus revenue.
A flat mill rate would produce a property tax increase in line with property value increases; a lower mill rate could keep property taxes flat the previous year.
Only the Assembly has the authority to establish the mill rate.
Assembly member Carole Triem said she hopes to see the mill rate lowered during the upcoming budget process, but said there are a lot of varying factors to weigh before a decision is made by the Assembly, and she couldn’t promise anything at this time.
“I think the Assembly is probably going to be interested in adjusting the mill rate to what we need, so I ‘ll be looking at what we need and what the community asks of us and calculate the mill rate to get to that,” she said.
Mayor Beth Weldon agreed and said she assumes the Assembly will try to stay “pretty even” with the mill rate given the sharp increase for many owners, but noted she could not say for certain until she sees the budget come April.
“We knew that the residential properties were being assessed a little higher due to the high demand, low supply and building costs, it wasn’t unexpected to see them come out sort of high,” she said. “It’s tough for the assessor, they just try to go with what they think is the fair market value.”
Weldon said since the release on Friday, the city has already seen a slew of upset emails from owners.
Property owners have until 4:30 p.m. Thursday, April 3,to file a petition for the city to review their assessed property and rule whether the increase or decrease in value was too excessive.
Glidmann said he is planning to file a petition but is still gathering information before he sends it to the city. He said he does not know why he and his neighbors saw such dramatic increases, noting he has not done any major upgrades to his property in the past year.
“People are being priced out of their homes,” he said. “I’m not contesting that it’s not worth more than last year, just not 40% more.”
• Contact reporter Clarise Larson at firstname.lastname@example.org or (651)-528-1807. Follow her on Twitter at @clariselarson.