Rising property values in Montgomery County and across Texas are putting a strain on home and business owners, prompting Texas legislators to explore solutions to the growing problem.

Montgomery County property values rose 12.5 percent on average over the last year, according to the Montgomery Central Appraisal District. The figure marks the third consecutive year that property values have increased by more than 10 percent.

MCAD board Member Bruce Tough said property values all over the county, including The Woodlands, have increased due to the growth in and around the area.

“Property values in The Woodlands have gone up constantly since the creation of The Woodlands; everyone wants to live there,” Tough said.

However, Tough said the success of more development is also creating higher property values and a strain on residential and business owners.

“Commercial properties are not being valued at the proper rate along with residential homes,” Tough said. “Within our own success there has not been enough inventory, and there’s been a bit of a downturn because of the oil and gas industry. It’s a disparity in the community; owners protest their valuations because they’re disadvantaged to MCAD.”

County property taxes

County Judge Craig Doyal said while rising property values are creating higher property tax bills for county residents, county officials have tried continuously to drop the tax rate. The county approved a 1 cent tax cut when the fiscal year 2016-17 budget was approved in September.

“This is the fifth time we’ve dropped the tax rate—it’s generally only 16 percent of the average tax bill,” Doyal said. “People have been challenging appraisals for many years, but it has escalated in the past couple of years. Values are going up, and there are a lot of new communities.”

Tough said he protests the valuation of his own home, which he believes to be overvalued. However, the state comptroller began investigations on MCAD for undervaluing properties in Montgomery County in 2015.

“Everyone here thinks their houses are being overvalued, but the state of Texas was saying houses were being undervalued,” Tough said. “Right now there is a cap of 10 percent on residential properties, but I think in the next legislative session a 5 percent residential cap will be proposed.”

Doyal agreed with Tough and said property tax reform will be a hot topic during the next legislative session.

Local lawmakers and state senators are listening to the concerns of residents as well. They have conducted meetings across the state over the past year to find ways to alleviate the property tax burden during the 2017 legislative session.

Legislative solutions

Greater Houston area property owners gathered Sept. 29 at one of the hearings with Texas senators and discussed taxpayers’ issues with appraisal review boards and worked toward property tax relief solutions.

State Sen. Brandon Creighton, R-Conroe, said rising taxes and appraisals are especially significant in Montgomery County and the public hearings are meant to find a solution.

“Rising appraisals have been a major issue for Montgomery County taxpayers for years,” Creighton said. “This interim, the lieutenant governor established a select committee on property tax reform and appointed me to that committee along with Chairman [state Sen.] Paul Bettancourt. We have been traveling around the state in public hearings to get testimony from taxpayers, businesses and local governments.”

Bettencourt, R-Houston, said when compared to Dallas, which has seen property tax increase by 22.4 percent in the past two years, Houston and Harris County have seen a 43 percent increase in the past three years.

“One of the solutions is simple: it’s called rollback,” Bettencourt said. “As the values go up, tax rates are forced to go down. In addition, we’re going to be looking at appraisal reform from the standpoint of appraisal district practices. These solutions are designed to stop runaway tax bills from going though taxpayer’s roofs.”

The topic of property tax reform and relief is expected to remain a hot topic in Houston as state and county officials work toward new legislation after hearing concerns from residents.

“It’s a double-edged sword,” Doyal said. “The more economic growth we have, the more values would increase. We manage the cost portion as best we can.”