Tax bill sticker shock: New Orleans assessor sees 23% jump in property values citywide

By Ben Myers

Source: The Times-Picayune | Nola.com

July 20, 2023

The citywide assessment of New Orleans property values is set to give homeowners sticker shock this month as they receive letters from the Orleans Parish Assessor’s Office showing a potentially huge jump in property taxes.

Assessor Erroll Williams said Wednesday that he has completed his quadrennial review of tens of thousands of properties across New Orleans, and that preliminary figures show that the total value of the city’s properties has increased by 23% since his last assessment in 2019.

Williams said that number will almost certainly notch down a bit once appeals are complete, but noted that the size of the increase surprised him. He had expected an increase closer to 15%, which is comparable to the increase after the last quadrennial assessment in 2019.

It’s not yet clear what areas of the city have seen the sharpest increases to property values, or how much tax bills will rise, if at all. While the assessments landing in mailboxes this month will show a jump in property taxes for many residents, whether taxes actually increase will be up to the New Orleans City Council, the Orleans Parish School Board and other taxing bodies.

Still, the possibility of yet another cost-of-living increase is stirring anxiety among residents already struggling with skyrocketing home and flood insurance premiums, and has prompted City Council Vice President Helena Moreno to raise the alarm about the soaring values.

“The people of New Orleans are constantly being hit with unaffordable costs,” Moreno said in a statement this week. “I have received calls from people on a fixed income who say these assessments are the final straw and will push them out of the city.”

Assessor to address council
Moreno questioned Williams’ assessment methods and asked him to appear at a public hearing in council chambers on July 25.

In an interview, Williams defended his methodology and said a range of factors are driving the increase, including a hot housing market and intense land speculation over the last four years. He brushed aside Moreno’s swipe as political theater, but has agreed to appear before the council.

“This is playing to the audience, I understand that. People are complaining to the council,” Williams said. “I see it also as a point to educate.”

State law automatically “rolls back” local property tax rates when assessments rise. But taxing bodies can then opt to reinstate some or all of the previous tax rates to claim the new revenue.

Those decisions will occur before the end of the year as officials finalize their 2024 budgets. If every taxing body retained current rates, the preliminary increase would net more than $850 million in property tax revenue, Williams said. Roughly one third of that would go to the School Board, by far the largest taxing body in the city.

Moreno said the council “will do all in its power to mitigate impacts, including rolling back any tax rate.”

Property owners have three chances to appeal their assessments. They can do so directly with the Assessor’s Office through Aug. 15. After that, the Board of Review – which is the City Council by another name – will meet to hear individual cases.

Appeals can then be made to the Louisiana Tax Commission.

‘Not in the ballpark’
In questioning Williams’ methodology, Moreno highlighted a 2019 Bureau of Governmental Research report, which said Williams appeared to have engaged in “sales chasing” in the last quadrennial assessment. Sales chasing is the practice of selectively appraising a recently sold home based on the sales price.

Using mass sales data to come up with values in a certain area is standard practice, but the Louisiana Tax Commission forbids assessor valuations based solely on sales price.

Williams, as he did in 2019, denied that he engages in sales chasing. He said new appraisals happen in between the quadrennial assessments when there are renovations, demolitions or other significant changes to the character of a property. Sales alone do not trigger reappraisals, Williams said, though they sometimes alert his office that structural work has occurred.

Williams said some assessments are increasing in the Lower Garden District, Uptown and Lakeview, where recent sales have far exceeded his 2019 appraisals. In some cases, sales nearly doubled his previous appraisals.

“Those are the areas that scare me. Because that means that we were not in the ballpark,” Williams said.

Some assessments are showing land increases out of proportion with improvements, a scenario that Williams said is partly driven by speculation.

“There is a change in land rate because a lot of developers with low interest rates started buying up land, building houses on it and changing the whole character of the neighborhoods,” Williams said, adding that speculation has cooled with steeper interest rates.

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