Property owners prepare to protest valuations

PRESIDIO COUNTY – Property values rose across Marfa and Presidio this year, pushing many owners’ appraisals to new highs. In the wake of increases, some are preparing to protest with hopes of lowering their appraisals, while others worry about the potential for rising taxes and how much their pocketbooks can tolerate without selling.

Since 1979, Texas Tax Code has said “all taxable property is appraised at its market value,” with very few exceptions. Even with no improvements to a property, a property’s value can rise and fall from year to year, based on comparable homes in the market selling at different prices.

The Presidio County Appraisal District is responsible for assessing properties and giving them an appraised value, basing it off of a number of factors, like the neighborhood, the condition of the building, the materials used and how much comparable houses have sold for recently.

Marfan Vita Ceniceros raised her family in town, moving to her current home in the Fort DA Russell neighborhood in 1974. It’s a modest cement home, built in 1926. There’s new construction on all the houses around her neighborhood, she says, but “my house is the decrepit one.” Last year she replaced her failing roof, which counts as an improvement to the property.

This year, her assessed value rose around $10,000, reaching $102,000. Her homestead exemption helps keep that number as low as it is –– without it, Ceniceros’ home is appraised at over $200,000 as of this year.

That’s what the PCAD estimates the home could get if it was listed on the market, despite the owner’s belief that its value hasn’t really grown. If she sold or gave the house to her children, the house’s taxes would immediately be calculated off that highest value, even if the next owners made it their homestead.

Ceniceros says houses in her neighborhood have recently sold for over $200,000. “But I’ve been up here for more than 40 years and I love my house,” she said. “I just don’t want to pay too much taxes on it. I used to pay $500 now they’re up to $2,000 which I can’t afford. I’m on a set income.”

Tax rates are set separate from the appraisal district. Each taxing entity – including the city, county, school district and hospital district – has to calculate its new rate so that it would bring in the same amount of money as the previous year. If valuations increase, it doesn’t mean the taxing entity automatically collects more tax revenue. Once they have that new rate calculated, most are only allowed to raise taxes by 3.5% – any higher and it triggers an election where constituents can roll back the tax rate.

Ceniceros is planning to protest her property value in Marfa for the first time in her life and says that ever since her taxes have risen, it’s been a financial struggle. “My kids help me a little bit, but gosh, this is ridiculous. The house isn’t in very good condition, it needs new windows, it needs new doors and compared to the other houses around here, it looks like a dump,” she laughed.

The district is responsible for calculating any exemptions, which include homesteading, being over age 65, being a veteran, having a disability or being a disabled veteran. Those factors help keep down assessed values for homeowners.

“There are a lot of people who have been in Marfa for a long time and a lot are Hispanic folks living in pretty marginal houses,” said Richard Petree, a consultant to the appraisal district. “When we started seeing the changes happen out there [in Marfa], their market value was maybe $18,000.” For those who don’t move out, Petree says it would take around 20 years for the 10% increase to get their assessed value to match the appraised value. “That’s protecting a lot of those people that I think the community is concerned about – that they’re being taxed out of their homes, but they’re not.”

Those calculations can be difficult for the PCAD, since buyers and sellers aren’t required to disclose property sales amounts to the district. Both the district and the state of Texas collect sales values from people who volunteer to give that information up, with more individuals sharing sales with the state than with the appraisal district.

That poses a problem for the district, which is responsible for appraising residential and commercial properties within 5% of the state’s appraisals. Each year, the state comptroller’s Property Tax Assistance Division checks the district’s work, completing a yearly property value study comparing the PCAD’s assessments with their own.

If the local assessments of residential and commercial real estate are more than 5% off, the district fails the study. Petree said the PCAD began trying to move property valuations up to match market values in 2013 to get in line with the state valuations. For years, “values were extremely low,” he said, out of step with the state.

“When we don’t meet what the state has assigned in value, the school is the one that loses the funding,” Chief Appraiser Cynthia Ramirez said. “Now when we don’t meet the state value, the school has to ‘recapture.’ They have to pay back the difference of what the state is coming up with and what we come up with.”

Even with a 58% increase in home valuations in 2020, Presidio County was not within 5% of the state in the latest property value study, meaning the appraisers are still undervaluing properties in Presidio County. Single-family homes in Presidio were on track, but commercial real estate in Presidio, as well as single-family and commercial properties in Marfa were undervalued.

The 2020 results meant there would be a continued rise in appraisals this year. The district said it was necessary to increase values 20% for residential properties in Marfa and 30% for commercial properties in both Marfa and Presidio for 2021.

In 2019, PCAD attempted to offer relief to homeowners by holding values steady for a year. Ramirez said that was a lesson learned. “We held the values and then we had to do a big increase in 2020.” Values rose 58% in the county last year. “In the past year we assumed that the market was going to slow down due to the pandemic and it just skyrocketed,” said Chief Appraiser Ramirez. “We have so many sales that took place last year and continue this year.”

Petree believes the area’s natural beauty is one factor driving the current market, with another being the pandemic driving major metropolitan-area residents to relocate to more remote environments.

Based on numbers from the PCAD, the amount of people living in the county and homesteading their land has shrunk. “People have sold their homes, and the ones that are owning property here do not actually reside here, they’re not homesteading their property,” Ramirez said. “In Presidio we had a lot of people that moved away due to the oil boom in Odessa, so a lot of owners lost their homestead exemption,” she added.

While Marfa has experienced appraisals rising consistently since 2013, Presidio’s growing appraisals are newer. Jovita Galindo, a homeowner in Presidio, said she worries about how families in Presidio will fare if appraisals continue to rise. Her husband was out of work during much of the pandemic, and, like many others, has had to find work outside of Presidio in order to support the family.

“Consider what’s coming in as an income in town,” Galindo said. “Presidio has no millionaires, just decent workers. We don’t want it [appraisals] going up next year and the next one. If it is, we might as well just sell and move out,” she said. But PCAD said its hands are tied. Property appraisals have to be equal, uniform and based on market value according to the Texas constitution, and as long as Marfa and Presidio are desirable locations, market values will rise, dragging appraisal values along with it.

The deadline to file property appraisal protests is June 7.