Script for Property Tax Appeal - 1/5/2007 Location: Location, Location, Location..... Indeed, Cortez Street's location is not the same as the homes north in the elite Ensign Downs area ..... nor west of the state Capitol Bldg. in the Marmalade district. Cortez Street is an island unto itself and cannot be compared to any other part of the city. Cortez Street hugs the side of a steep mountain slope. Few homes have flat areas for back yards. Instead, tams, shrubs, and trees are the only options to fill these steep unmanageable mountain slopes. Retaining walls are the prominent feature of almost every home located on Cortez Street. Homes have front yards facing Cortez. Other homes have back yards facing Cortez. The organization, at best, is hodge podge. No organizational plan ever existed and homes were built through the years to best suit the builder and fit into the unusual properties of the land. Cortez Street has no sidewalks. All electrical, phone, and cable wiring is exposed on poles, then draped into each home. It is an ugly sight. Unimproved parking areas, unsightly homes, and junkiness mark this street as quite different from the norm. In some locations, you might classify it as "Ghetto." Cortez Street is an island. No other location in the city can match the conditions existing on Cortez Street. Indeed, Location, Location, Location. Comparable Property: Let's specifically talk about 584 Cortez Street. As the owners who purchased the home new in 1962, and one of the longest term residents in this neighborhood, we have a good overview and perspective of the area. Tom Hoffman, our real estate agent told us that there ".... are no properties that have sold in this area recently that can be considered as 'comparable' to our 584 Cortez Street property." Likewise, another real estate agent, Robert Mills, listed information which further verified this finding. ... There are no properties that have sold recently that can be used as "comparable" to the 584 Cortez Street home. We were quite surprised at the property tax appeal hearing to be sent home with photos of homes that were judged by the S. L. County Assessor's office as "comparable." We took a field trip and took a personal, a first hand live look at these homes. They were NOT comparable! 71 E. Girard We know the history of this home well. The owner of this home received $0.00. The owner could not afford the taxes and associated expenses with maintaining this duplex. She lost the home. The assessed valuation by the assesor's office was made after considerable remodeling by the holding company. The valuation is inflated by this fact. The home has been completely remodeled. 77 E Girard We know the history of this home well, too. The ownder of this home received $0.00. The owner could not afford the taxes and associated expenses with maintaining this duplex. She lost the home. It was completely gutted and rebuilt from ground up by the holding company. The county assessor's home valuation is incorrect. The home has been completely gutted and remodeled and in no way compares to 584 Cortez Street. 416 N "T" Street This is a home in the Avenues area. Avenue homes are not comparable to Cortez Street properties. The home sits on property not similar to the terrain of Cortez Street nor in a similar neighborhood. It is not a comparable. 503 N "H" Street The home has sidewalks, resides in an improved neighborhood and has useable flat lawn area. Further it appears to have been remodeled as indicated by a central air conditioning system at the side. It is in an improved Avenues neighborhood and is not comparable to the Cortez property. 570 N Columbus Columbus Street is not similar to Cortez Street. The home has sidewalks, useable lawn areas and is not comparable to the Cortez Street property. Columbus Street is not the same location as Cortez Street. 269 N State Street This is not a comparable property. It resides at the top of State Street and in no way compares to Cortez Street properties. This deceptive practice ---- to jack up home valuation by comparing against higher priced homes in locations not comparable --- is not acceptable. It reminds me of the story about the Jeweler and the Factory Worker. Each morning the factory worker would stop at the front of the jeweler's shop to set his watch for the correct time. Each noontime, the jeweler set the clock in the front window of the store by the factory whistle which blew at noon. It wasn't until years later that the jeweler discovered the factory worker who set his watch by his clock in the window was the one who blew the whistle at noon at the factory! The assessor using only higher priced homes as "comparable," soon skewed property values beyond reality because of compounded error. The S.L. County Assessor's office apparently has gone to bed with the real estate people and forgotten that the home owner should have input in home valuation as well! Most people I have talked to have NOT been successful in appealing their property tax. This is the experience we, too, have had with our 2002 appeal. While we furnished comparable properties, these were thrown out and only higher priced properties inserted by the appeals officer as "comparable." Further, our real estate agent, Tom Hoffman, reported that it would do no good since the appeals don't work any more. He indicated that the appeal process was "broken." This same attitude is carried by just about all those who we talked with. They had given up hope on the tax appeal process. It ws a hopeless, losing situation. Such a red flag indicates a situation whereby a person submitting comparable, lower priced, properties is not heard. Instead, higher valued property figures are substituted by the S. L. County Assessor. This encourages a sharp and rapid spiraling of property values beyond their fair market value. Our property tax appeal in 1986 was successful. The appeal officer listened. We got a 37% reduction in our property tax after submitting comparable properties. Our 2002 tax appeal failed even though we submitted comparable properties. There had been a very sharp turnaround in the S.L. County Assessor's philosophy and approach to appealing property taxation. This sudden turnaround happened in about 1995. Suddenly taxes started shooting up at astronomical rates. For example, prior to 1995, the property tax increase per year was 2.5% .... approximately at the same inflation rate as COLA increases --- the Federal Cost of Living Adjustment figure. However, AFTER 1995 there was a shocking change. The property tax increases on our 584 Cortez Property suddenly shot up at the rate of 32% per year! This represented a 13 TIMES increase in the inflationary rate over COLA figure, the Federal Cost of Living Adjustment! We had a 57% property tax increase in 1995 We had a 39% property tax increase in 1996 We had an 82% property tax increase in 2002 A 19% tax increase in 2003 And an 18% property tax increase in 2006 We had a 486% property tax increase in just 12 years! During my entire working lifetime, my wages -- the money I earned, increased only by 3X ..... far, far less than unreal 486% in just 12 year figure for property taxes! Such shockingly high surges in tax increase warranted some investigation. We scoured several homes not only in our neighborhood, but throughout the city. Absolutely NONE of the other properties we were able to scan suffered such enormous tax increases! Here are some tax increases for our immediate area on Cortez Street For this, we used slpropertyinfo.org for our source of information. Further, we wanted to average these surges over the nine year period shown at this Web site. Unfortunately, it only went back nine years. Our home increase in taxes over the past nine years was 216%. So, .... how does this compare to other homes in our area? .... Watch closely! The top of the screen has other Cortez Street properties. The bottom is the 216% figure for our property. Let's see how they compare ...... An increase of 152% ..... another at 135% ..... another at 131% ..... yet another at 130% .....This one at 140% ...... increase here was at 148% ..... an increase of 140% ..... 151% ..... 126% ..... 122% ...... 133% ..... 116% ........ 114% ....... 138% ..... 148% ..... 135% ..... 139% .... 141% ..... 118% .... 144% .... 126% ..... All of these are shocking increases in property tax. And it leaves us stunned that ours was higher than any scanned. Too, many of these properties just listed have undergone considerable property improvements. Ours has not. We found absolutely NO property in our search that had a similar large increase as ours. We emphasize that the 584 Cortez property has undergone no remodeling except for installing double paned glass as a necessary and much needed energy conservation measure. This home, being of earlier construction has no insulation in the walls or under the flooring. We found another surprise .... another shock, if you will ...... Take a look at this one ..... This is a property owned by John Williams, a multi-millionaire, ---- the co-owner of the Gastronomy Chain of Restaurants. His home underwent extensive landscape improvement the past few years. How much do you think his taxes went up this past year? Would you believe just ONE percent? Again, we found NO other property that had gone up with that small of an increase! His nine year average of tax increase was 138%. In contrast, ours was 216%. Our property, 584 Cortez Street: Like most other properties on Cortez Street, the prominent characteristic for the home is a retaining wall. The home is built on a mountain. Most of the property is mountain slope with only a very small part being available for flat lawn area. Here's a satellite image view of 584 Cortez. I'm outlining the flat lawn area that exists on this property. This fact makes the property unsuitable for raising children or family living. At best the home qualifies for a single person, or at most two people without children. There is no sidewalk. There is an ashalt driveway leading up to the home. The home is located in a very highly dangerous area. A truck rolled onto the property in 1995. In 2002 a car made it all the way into our home. We asked for city help in protecting us from future incidents. No help was offered or given. Yet we've noted several other city locations with such protection put in place. By necessity, our own, we installed bollards to help eliminate at least one route for cars entering into the property. Still, this protects only a small part against runaway vehicles. We are still wide open to damage from runaway cars, vans, and trucks. We consider this property at even higher risk because of new construction to our east. Permanent damage was sustained when a leaking roof caused ceiling and wall damage to both sides of the home. We were advised that the only sure solution was replacing the roof. Further, we have had countless incidents of flooding. Water coming from the street above has been an ongoing threat. It has also done permanent damage to the basement areas on both sides of the duplex. We have been cited twice for weeds which exceed a height of six inches. Yet, despite our argument that the weeds protect us from soil erosion and flooding, the city insisted they be cut down. Yet, no one I know, had ever been given a citation for not turning their wheels when parking on a hill. I can go up our street on any day and find less that one in ten automobiles who turn their wheels to the curb. Is the message here that a law about six inch high weeds on a mountain slope are more dangerous than the law which states a car's wheels must be turned to prevent property damage? This home is located near the top of the hill .... and in a direct path of flights of Life Flight helicopter to and from the airport. Ever been literally shaken out of bed by a helicopter flying 150 feet above your home at 2:00 a.m.? ?? It's an experience you won't forget. Extensive termite damage was discovered. Both sides of the home were infested. We may never know the full extent of this damage until a floor collapses. It may well be ready for the wrecking ball. A concerning and serious ongoing problem with the property is sinking of the land on the northwest corner. It was necessary to move these gas meters because of the land sinking. Further, several repairs to the front living room on the 586 side were required because of splitting wallboard. We still have no permanent solution for this problem. The home is a fifties style home. No improvements have been made to update it from this style. The home needs extensive and expensive electrical remodeling. The old 2-wire AC wiring no longer meets code. The home lacks modern insulation in the walls and flooring; thus it is not energy efficient. All these factors contribute toa significant devaluation of the property. New Home Comparisons The S.L. County Assessor seems to compare old properties against new properties. Location, Location, Location seems to be far more important than age, age, age. Yet, I know of nothing in this life that doesn't wear out and doesn't depreciate. Even the Federal Tax Form allows owners to depreciate their homes. Here are the comparisons of our home against a brand new home in Pleasant Grove located in an upscale, new subdivision. This home sold for $320,000. Our old 44 year old home is valued by the S.L. County Assessor at $318,300 .... a very near comparison which is within 1/2 % of being of equal value. New home has central air conditioning. Ours None New home has central vacuum. Ours None New home has large, spacious double sink bathroom with separate jacuzi and shower, another double sink bathroom, and still another half bathroom. Our only an old style single sink bathroom with combined shower and tub. New home has spacious bedroom with walk-in closet. Ours a small bedroom which allows only a standard sized bed. New home has extensive outside lot with ample room for family living. Ours ... None to speak of. New home has full wall insulation both ceiling and floor. Ours, None New home has double ovens and microwaves. Ours old style oven and stove. New home has sidewalks and fencing. Ours None. New home has full automatic sprinkling system connected to cheaper irrigation water source. Ours, none. New home has tile flooring. Ours, None. New home has carpeting throughout. Ours, None New home has spacious bedrooms. Ours, small. New home has spacious basement. Ours, limited. New home has burried power, phone, and cable utilities. Ours, NO. New home is located on flat ground. Ours, NO New home has fully wired central burglar alarm and fire alarm system. Ours, NO New home has spacious kitchen with large work area. Ours, None. New home has large spacious front room with fireplace. Ours, None. New home has large closets in all bedrooms. Ours, small. New home has accomodation for computer networking and cable TV. Ours, none. New home is not in hazardous area. We are. New home is not in noisy location. We are. We have noise from helicopters, city traffic, and trains New home has modern vaulted ceilings, large stairway. Ours, none. All land of new home is usable. Only 10% of our land useful and usable. Given all these factors, there is no denying the fact that the 584 property is overvalued when compared to new properties that are used to compare our property. Property Value: Using COLA, the fair property value for 584 Cortez Street property value sits at $84,832 Using the affordable rental rate for Utah, the 584 Cortez Street property value is at $130,000 Using our actual collected rent during 2006, the 584 Cortez Street property value is at $113,334 Consequences: One of the consequences because of this current unfair property tax valuation is that we are subsidizing our renter at the rate of $1,024/month. The duplex share of property tax in 2006 amounted to 18% of total collectible rent. This figure is unacceptable. We cannot afford to subsidize our renters because of unfair and unrealistic taxation. Further, the long term effect is completely unworkable. On this sheet I have calculated the consequence of this kind of taxation for 5 year, ten year, twenty year, and so forth. As you can plainly see, the present rate of taxation increase is ludicrous. This chart, mind you, is for the working man ... NOT the retired person as we are. The consequence for the older retired person on a fixed income is beyond comprehension. On the left is property tax increasing at the rate we have experienced for our own property over the past 12 years. Next, is the income of the working man whose income rises at the rate of approximately 2 1/2% per year --- the COLA, the Federal Cost of Living Adjustment. Here, at the twenty year mark, the income of the working person will be approximately the same as the property tax he will pay! Of course, that's not workable. In summary: We are disappointed in the sharp increase in property taxes on this property. We don't mind paying our fair share of tax; but when it comes to disconnected thinking with regard to taxation versus income; certainly, an adjustment is needed. As demonstrated, 584 Cortez Street is located in an island of property that cannot simply be lumped together with other properties. Indeed, location DOES make a difference! Mountainous conditions and Ghetto circumstances in some locations do not make this property compare in any way to other parts of the city. And, in particular, older homes such as this should not be compared against brand new properties now on the market. Nor should this property be compared against properties which have been improved and modernized. Our research indicates this to be the case. Old is old. Depreciation DOES affect homes just as much as it does any other physical man made item. To hang one's hat on a real estate bubble is unfair .... especially when that spiraling real estate bubble is created by the taxing entity itself, the S.L. County Assessor. His philosophy is to deny fair appeal hearings and make comparisons using only higher priced property sales as the "base." Added Material: 18% of collected rent in 2006 went directly to property tax. Comparable properties on Cortez Street 686 Cortez 293,800 (Eskelson-large lot-major remodeling) 678 Cortez 265,800 (Burnham-large lot) 543 Cortez 257,500 (Scott's-large lot) 71 E. Girard 315,000 (reposessed/completely remodeled) 77 E. Girard 275,800 (reposessed,completely gutted/remodeled) 564 Cortez 326,400 (2-bath,large lot, remodeled) 577 Cortez 239,300 674 Cortez 276,000 656 Cortez 294,700 601 Cortez 262,400 603 Cortez 243,400 613 Cortez 267,300 660 Cortez 248,700