You don't have to dig too deeply into the Dallas Central Appraisal District records to find examples of this occurring. Here are some examples:
4020 Santa Barbara: Structure Value in 2006; $124,800 / Structure Value in 2008; $21,470
83% decrease in Structure Value.
4212 Santa Barbara: Structure Value in 2006; $140,270 / Structure Value in 2008; $15,050
89% decrease in Structure Value.
4402 Santa Barbara: Structure Value in 2006; $94,830 / Structure Value in 2008; $15,440
84% decrease in Structure Value.
Some will say I'm cherry picking. So let's compare Apples and Apples.
Here's a home at 4007 Santa Barbara Dr. It is 2,162 sq. ft. and according to DCAD, has a market value of 320,020, or $148.00 per sq. ft. It is listed in Good condition.
Here's a home at 7006 Haverford Rd. It is 1,798 sq. ft. and according to DCAD, has a market value of 293,430, or $163.00 per sq. ft. It is also listed in Good condition.
The difference is that the home on Santa Barbara has a lot value of $200,000 and a structure value of $120,020, while the home on Haverford has a lot value of only $80,000 and a structure value of 213,430.
Oddly, the Structure on the lot at 4007 Santa Barbara Dr. was worth $295,920 as recently as 2006. But it has lost 60% of it's value in three years. Many will say that this was done to protect the homeowner from higher and higher taxes. But this home has a homestead, capping the taxable value at $316,963. So, if the structure depreciation rates applicable to University Terrace (which are all over the board, ranging from a few percent year depreciation to as much a 5% a year appreciation), were applied to this property, given the new value of their lot ($200,000) the home on Santa Barbara ought to be worth as much as $495,000.
But it's not.
None of the older homes on Santa Barbara, or Vanderbilt or Sondra or Lake Circle have been able to enjoy anything close to a dollar for dollar increase in their homes as the value of their lots increased.
For whatever reason this is done, it sure makes it easy for the builders to point to why they're offering so much less than you dreamed you would get once the destruction of your neighborhood began.
Why are you fixated on the value of the structure? I own the structure and the land. When I sell, I’ll sell them both.
ReplyDeleteI don’t care if they say the structure is worth zero and the land is worth 100%, it’s the combined figure that counts.
Let’s look at your examples. Here are the Appraisal values for 2006 and 2008:
4020 Santa Barbara. Total increase = $66,670
2006: $154,800
2008: $221,470
4212 Santa Barbara. Total increase = $49,280
2006: $165,770
2008: $215,050
4402 Santa Barbara. Total increase = $53,110
2006: $162,330
2008: $215,440
So to look at just the structure value doesn’t make one bit of sense.
This is your most ridiculous comment though “For whatever reason this is done, it sure makes it easy for the builders to point to why they're offering so much less than you dreamed you would get once the destruction of your neighborhood began.”
Is that how you bought your house? Did you base your offer on the structure value only and ignore the land part? I doubt it.
Liam Gartside
Liam – My point about the devaluation of the structures is simple, and it strikes me that you must have some agenda other than “property rights” if you can’t see it.
ReplyDeleteAs simply as I can say it: If I lived on Santa Barbara, and my lot was worth $30,000 in 2005, and then the builders moved in and drove the price of dirt all the way up to $200,000 in 3 ½ short years, I’d expect a big payday. After all, my house would only be 3 ½ years older, and on any depreciation schedule in any other neighborhood it ought to only lose a few hundred, or at most a couple thousand dollars.
But instead, when I’m ready to sell, I find that my house is worth about the same as homes in clearly less desirable neighborhoods. No additional appreciation. No big payday, even though the lot is clearly so much more desirable. So desirable, in fact, that they built a ¾ million dollar home on the lot next door.
As far as I can tell, this teardown phenomenon, where housing stock remains flat for the builders, is the only real estate situation of it’s kind.
When a commercial area becomes popular, like the revival of restaurants along Henderson, those property owners probably saw a big payday if they chose to sell.
Look what’s happened along Lower Greenville. Rents have gone so high that many of the old Mom & Pop places had to move out to make room for more profitable venues that could afford the astronomical increases in rent.
But only in residential teardown neighborhoods do prices remain flat. Only when it’s time for Joe Average Homeowner to wet his beak do the builders kick at the ground and give their best Aw Shucks, and say that, Golly No, there’s no way they could pay more than a few thousand dollars more than what the dirt’s worth, and the dirt ain't worth much more than what's on your tax statement.
Yet that idea, that we’re all going to get this huge payday if we just save our neighborhood for the builders is what normally fuels groups like yours. You may claim “property rights”, but I’ve heard it said by some of the very few people who support your campaign that people like me are standing in the way of their big check from the builder.
Now, the city says that they do the lot/structure juggling to help “average citizens” with their property taxes. But you’re the one who pointed out that a homestead exemption would save them from massive value increases – not that they have to worry about that in a teardown neighborhood – and the +65 freeze for those who qualify would take care of most of the rest.
And that is my point and always has been my point: when the builders move in, there is no more quiet neighborhood. They work six days a week from 7 am till dark. There’s dust and debris and commotion, not to mention hundreds of strangers and scores of work trucks up and down our streets.
And for what? So I can end up living in the shadow of a 3 storey wall built 5 feet from my property line, with windows peering into my back yard – oh, well, there goes all the money I spent for my board-on-board cedar privacy fence - and so a builder can pay me what my house is already worth?
Builders put up with none of the mess and commotion of redeveloping a neighborhood. They don’t live here. They’re not our neighbors. Yet they’re the only ones who profit from it.
Why is that?
Liam: You say "I don't care if the structure is worth zero [when I sell]..." Well, what if you don't want to sell? That's the situation I would find myself in. However, I think my choices at the point of zero structure value would be: (1) sell; or (2) build my own great big house on my property. In the teardown neighborhood scenario, I think I eventually lose the choice to stay in my home as it is. Therefore, I believe it is perfectly reasonable to employ a zoning change to resist being forced into such a situation.
ReplyDeletePete Dickson