Without access to this market data, TCAD Chief Appraiser Marya Crigler said her staff is unable to accurately assess residential property values and so will use last year’s values again this year.
ABoR controls access to the local home sales price data.
According to the cease-and-desist order, ABoR does not license its database “for establishing property values for tax purposes” or “grant licenses to any participant, subscriber, or third party to sublicense the [database] for establishing property values for tax purposes,” according to the order, which Community Impact Newspaper obtained from TCAD.
“You shouldn’t have to beg and plea to get the information that you need to do your job,” Bruce Elfant, Travis County’s Tax Assessor-Collector Bruce Efant said at a Feb. 19 TCAD board meeting. “This is a horrible situation we’re in.”
On Feb. 12, Crigler met with representatives from the 17 school districts in Travis County and discussed possible negative effects of the order on state funding, which ABoR disputes.
“The impact on Travis County local entities will vary, but it will be measurable on all and, for the school districts, will ultimately adversely affect students, teachers and staff,” representatives from eight Travis County school districts wrote in a Feb. 19 letter to TCAD’s board.
Disclosure in a non-disclosure state
Texas is one of 12 non-disclosure states in the U.S., which means real estate sales prices and other market data are not public record.
ABoR and other realtor associations argue that the sales market data they collect is proprietary and copyrighted; property owners may also expect privacy given the state law.
“The Texas legislature has been clear about the respect, freedom, and privacy homeowners should have with regard to their home purchases and sales, and ABoR is not going to interrupt that expectation,” ABoR wrote in a Feb. 19 email to Community Impact Newspaper.
Meanwhile, the state mandates appraisal districts assess properties according to their market value—what they would likely sell for on an open market.
Without public records detailing sales prices, appraisers may rely on MLS data—obtained either through local realtor associations or third-party vendors who sell them access—in conjunction with other sources, such as deeds, protest hearings and mailed questionnaires.
“It is very, very difficult to appraise properties at market value without market data,” TCAD Chief Appraiser Marya Crigler told Community Impact Newspaper.
In 2017 and 2018, TCAD bought market data from CoreLogic, a third-party vendor.
Last May, upon learning that TCAD was accessing its market data, ABoR sent a cease-and-desist order requiring TCAD not to access its copyrighted data through any source, including third-party vendors.
“The cease-and-desist order that was sent to TCAD called on the appraisal district to stop using the proprietary data of [its database],” ABoR said in a Feb. 13 statement. “Unauthorized use of a property data set is not the only means of doing the job by an appraisal district.”
Without access to market data, TCAD said it has only been able to obtain data for 15% of sales made in 2019, compared to 98% of those made in 2018, which Crigler said is not enough to accurately predict market values for the remaining 85% of properties.
“It’s really had a chilling effect on anyone willing to step forward and provide the sales data,” Crigler said of the order.
ABoR said that TCAD’s claim that it cannot appraise residential properties without access to its MLS data is misleading.
“The cease and desist order should have no impact on TCAD’s ability to reappraise homes,” ABoR said in the Feb. 13 statement. “It did so for many years without use of [our] proprietary data.”
TCAD has historically relied on market data obtained from various sources; a spokesperson said the district has never been in a situation such as this one before.
In an effort to collect market data, TCAD mailed 21,741 letters to property owners seeking information about their sale values and received around 2,389 responses, many of which Crigler said were not credible.
Big changes ahead
Without more sales data, TCAD will not appraise residential properties this spring and will instead reuse the appraisal values determined last year.
Property owners will pay taxes based on the assessments they received in 2019. Those with homestead exemptions may see a 10% increase in their taxable value even though their appraised home value will not change.
Most local taxing entities—such as cities, counties and community college districts—set their tax rates based on the total taxable value provided by their appraisal district.
If appraisal values do not change, these entities can still set the tax rate at whatever increases revenue by 3.5% year-over-year, the maximum allowed under a new state law.
But school districts have a different formula for calculating local property tax rates.
As a result, TCAD predicts the order will negatively impact school districts in Travis County.
Even if appraisal values remain the same, market values will likely continue to rise, creating a gap in the appraised value of homes and the price they would fetch on the open market.
Last year, the total taxable value of properties in Travis County was appraised at $275.06 billion, according to data obtained from TCAD. This amounted to a 11.37% increase from 2018, factoring in both increasing value for existing property and new construction.
It was also the ninth consecutive year that the appraisal roll increased.
When allocating funding to school districts, the state comptroller’s office conducts a biennial property value study to determine the accuracy of the local appraisal district’s work in determining the total taxable value.
If the office finds a higher taxable value than the local appraisal district it can affect the amount of state funding a school district receives
“In general, if your state value is higher [than the appraisal district’s], your state funding goes down,” said Laurie Mann, policy advisor in the property tax assistance division.
The standard against which the comptroller’s office measures the appraisal district’s work is market value, but Mann said she did not know if her office had access to MLS data regarding transactions made in Central Texas.
At the Feb. 19 board meeting, Crigler said TCAD submitted an open records request in an attempt to gain access to MLS data used by the comptroller’s office in its studies. She said she received a response that the comptroller’s office could not share such data because of confidentiality concerns.
“In my mind that’s outrageous,” Elfant said.
In a statement, AISD Chief of Business and Operations Nicole Conley said the school district is working to determine the possible effect of this change.
“We greatly understand the need for property tax relief,” Conley said. “Though we understand why the Austin Board of Realtors has taken such measures, we also realize this could reduce revenue growth for local school districts. It could also potentially shift more funding burden to the state, and create more instability in public education funding.”
Representatives from Dripping Springs ISD, Eanes ISD, Elgin ISD, Lake Travis ISD, Leander ISD, Marble Falls ISD, Pflugerville ISD and Round Rock ISD wrote they “were shocked and dismayed by the late notice” provided by TCAD regarding the May cease and desist order,” in their joint letter.
“Parents, community members, and business owners in our jurisdictions will suffer clear damages from the Chief Appraiser’s decision,” they wrote.
Crigler said she waited until it was “undeniable” that TCAD would be unable to access market data before bringing the issue to area school boards.
ABoR disputes that the cease-and-desist order will negatively affect school districts.
“TCAD can create statistically sound models for the bulk appraisals of residential property using the rendered data they collect,” ABoR said in their Feb. 13 statement. “It’s unfortunate that TCAD is threatening to stop the reappraisal process at the expense of our schools.”
ABoR serves 12,245 members and more than 14,000 subscribers to its MLS across five counties: Travis, Hays, Williamson, Bastrop and Caldwell.
Hays Central Appraisal District Chief Appraiser Laura Raven, wrote in a Feb. 19 email that the district uses “MLS sales data when provided to us and it’s relevant,” in addition to a host of other resources, including public records, marketing materials and inquiries sent to property owners, brokers and tax agents.
“Under generally accepted appraisal guidelines, groups of sales occurring within a region of the County and within appropriate time frames are widely considered to be the most useful information in establishing values,” Raven wrote.
Representatives at the three other appraisal districts either did not respond to request for comment or did not wish to speak about the situation.
Michael Amezquita, chief appraiser for the Bexar Appraisal District, wrote in a statement that his organization does not have access to local market data, which is collected and distributed by the San Antonio Board of Realtors.
He added that the Bexar Appraisal District would “gladly pay a subscription fee” to SABoR for access to its MLS database.
SABoR Board Chairperson Kim Bragman wrote in a Feb. 19 email to Community Impact Newspaper that the organization’s “rules provide that access to the database is reserved for members who actively participate in the buying and selling or real estate property," adding: “Government entities do not have access.”
The Bexar Appraisal District relies on sending sales requests letters to buyers and sellers, miscellaneous publications and other sources, Amezquita wrote, which amounts to between 30% and 35% of deed transactions in Bexar County annually.
“We do the absolute best that we can with what we have,” Amezquita wrote.
The Bexar Appraisal District is able to obtain more information on sales prices for properties on the middle- to low-end of the price spectrum, which makes their appraisals of those properties more consistently accurate, Amezquita wrote.
HIgher-cost properties are fewer in number and their owners are less likely to report their sales prices, Amezquita wrote in an email to Community Impact Newspaper. As a result, appraisals for these properties tend to be less accurate.
“This situation shifts the tax burden to those owners in the middle- to low-end disproportionately,” Amezquita wrote. “I think that is inherently unfair.”
SABoR leaves disclosure up to their clients.
“We know clients may have various motivations, including privacy concerns, for why they may want to keep this information confidential and our system is set up to allow them to make that decision for themselves,” Bragman wrote.
Amezquita faces similar difficulties as Crigler and said he appreciates the challenges of trying to deal with them.
“If there were provisions for mandatory sales disclosure, appraisals would be more accurate, the distribution of the tax burden would be more fair, but above all, the justification for appraisal increases would be more transparent to the public,” he wrote.