Loretta Lively's Spencer Township home and lot are now valued at $43,800 instead of $16,072. The half-year tax bill for her and her husband, Leon, rose from $142 to $352.
PORT CLINTON - For more than 20 years, Burnell and Patricia Gates have enjoyed the view of Lake Erie from their waterfront home in Ottawa County's Portage Township.
Year-round residents, the Gateses say visitors from outside the area have snapped up the houses around them for use during the busy summer tourist season. The influx of visitors and home buyers, fueled by a robust economy and low interest rates, has poured millions of dollars into Ottawa County and boosted property values along the lake.
That fact hit home for the retired couple this month when they received their property tax bill in the mail. As a result of a countywide revaluation, the half-year taxes on their lot and two-bedroom house jumped nearly 50 percent, from $1,089 to $1,621.
“In the past, it kept up with the cost of living, which is fine,” Mr. Gates said. “But this is kind of outrageous.”
The Gateses aren't alone in their shock and dismay. Property owners across Ottawa County and elsewhere in northwest Ohio have been startled to find themselves owing hundreds more in taxes that are due next month.
State law requires county auditors to conduct a comprehensive review and revaluation of property values every six years, a process that often includes an exterior inspection by an appraiser. Midway through that period, values are checked and updated through records of property sales.
Besides Ottawa County, property revaluations were performed in the fall in Erie, Huron, Lucas, and Williams counties in northwest Ohio. Triennial updates were done in Allen and Sandusky counties.
County officials and real estate professionals say a boom in home sales in the late 1990s sent prices soaring and that tax values are just catching up.
“I think one reason people are so shocked that values have gone up so much ... is that we've just gone through the lowest period of interest rates in recent history,” said Bob Vogel, who owns a Port Clinton-based appraisal firm. “When that happens, people qualify for higher-priced homes. It was a seller's market.”
Historically, real estate values rise about 3 to 5 per cent a year, he said, and this valuation surge should be offset by smaller boosts later.
But that's little comfort to homeowners such as the Gateses. The value of their 1,700-square-foot home, which Mr. Gates built himself in 1977, rose from $177,628 to $284,828.
“That surprised me,” Mrs. Gates said. “It would be one thing if you were at Colony Club [in Catawba Island Township], where everything is residential and everyone lives there year-round. There's a number of new subdivisions with new homes.”
Jacqueline Chapman, Ottawa County treasurer, said the construction of vacation homes along Lake Erie and the Portage River is the driving force behind the surge in property values. Areas near Elmore and Oak Harbor have been hot too.
“The growth areas in the county are the water areas, primarily Catawba, Danbury Township, the islands, but also Harris and Salem townships,” she said. “Your water areas are big. There's a lot of growth.”
Mr. Gates said he and his wife may appeal their valuation to the county's board of revision. He said he fears that further tax increases could force him to move away from the lake, where he's lived most of his life.
In Ottawa and other counties, property owners have until March 31 to file an appeal of their valuation. In each county, the board of revision generally includes the auditor, treasurer, and president of the board of commissioners.
About 30,000 tax bills were mailed Jan. 12 to Ottawa County property owners, who have until Feb. 20 to pay.
Auditor James Snider said his office will be busy fielding complaints in the coming weeks. During the county's last full revaluation six years ago, about 350 property owners appealed, and Mr. Snider said he expects many more to do so this year.
To increase their chances of success, homeowners need to show proof, such as sales of comparable houses, that their property is overvalued.
“People have to prove what they're saying,” he said. “Sales are the best way of proving value. The next best way is a professional appraisal,” which typically costs about $225.
Mr. Snider said he hasn't determined the county's average valuation increase but realizes that in general, values have risen significantly.
“It used to be in Ottawa County we had very few complaints. Values didn't increase very much,” he said. “But now they're going up.”
Sometimes, officials acknowledge, home construction can cause unwarranted valuation hikes for older neighborhoods nearby.
In western Lucas County, a wave of new upscale subdivisions helped boost values an average of nearly 50 percent in the village of Holland and Harding, Monclova, Spencer, and Swanton townships, said Auditor Larry Kaczala.
Residents in Spencer Township, a rural area dotted with salvage yards, mobile homes, and small cinderblock houses, are protesting tax bills that have tripled in some cases.
Besides higher valuations, Spencer Township residents are paying a 6.5-mill operating levy passed in November for the Toledo Public Schools. That issue is costing the owner of a $100,000 home an additional $199 a year.
Homeowners blame two subdivisions off Crissey Road, Stone Oak in Springfield Township and Waterford Village at Forest Lakes in Sylvania Township, for driving up their taxes.
Leon and Loretta Lively, who live in a small three-bedroom house on South Eber Road, were stunned to find that their half-year tax bill had risen from $142 to $352. The valuation on their house and its one-acre lot jumped from $16,072 to $43,800.
“My husband and I feel like they're trying to force us out because they want to build out here,” Mrs. Lively said.
The couple acquired the house in a land-contract transaction in 1990 and officially took title in 1995, paying $15,000, according to county records.
Mr. Lively, a retired ironworker, said he and his wife have made few improvements to the house, a one-story structure built in 1952 that has 964 square feet. A tour of the house showed a rear utility room and bedroom with sagging ceilings and evidence of water damage.
“This is the way it was when we moved in,” Mrs. Lively told a visitor last week. “This house needs a lot of work on it.”
Alvin Parsons, who owns five lots along Frankfort Road that include four residences and a used-car dealership, said he has contacted the auditor's office about the revaluation, which raised his half-year tax bill from $773 to $2,139.
“They said it's because of the growth and development out here in Spencer Township, all of the new homes coming in,” he said. “I don't see how a guy a mile down the road can build a new home and raise my taxes.”
Mr. Kaczala said the majority of complaints from Spencer Township have come from two areas just west of Stone Oak. In a section bordered by Hill Avenue and Meilke, Old State Line, and Crissey roads, his office is reducing values 40 percent.
In another small neighborhood northeast of the former Spencer-Sharples School at Irwin and Angola roads, valuations are being cut 30 percent, he said.
“Big houses that are being built have pulled up the values out there too high,” he said. “You have houses being built out there that are $500,000 that are sitting next to houses that are worth $40,000.”
The adjustments don't include the areas where Mr. Parsons and the Livelys live. Mr. Kaczala said property owners elsewhere in Spencer Township and the rest of the county who feel that their valuations are too high can contact his office.
“They should call our appraisal hot line and talk to one of our appraisers,” he said. “We'll either make an adjustment, if we think there's a mistake, and if we don't, they can sign up for a formal appeal with the board of review.”
Officials in other counties say they expect to handle their share of complaints this winter.
Huron County Auditor John Elmlinger said he's already heard from about 2,000 people with questions or complaints about their valuations, “and once the tax bills go out, we anticipate speaking to an additional 2,000 people.” Huron County has about 38,500 parcels.
Huron County plans to mail tax bills Friday, a delay of about two weeks caused partly by computer problems in the treasurer's office. Payments are due Feb. 23.
Mr. Elmlinger said the average valuation increase is about 22 percent, with residents in the western end of Huron County getting the biggest hikes. Construction of single-family homes for full-time residents is the main reason for the surge in values, he said.
According to Mr. Elmlinger, about 70 percent of the real estate taxes collected in Huron County go to public schools. The rest is divided among the county, cities, and townships. In general, the majority of property taxes in Ohio counties go to schools.
But Mr. Elmlinger said Huron County's schools won't reap much of a bonanza from the higher tax valuations.
For one thing, under state law property owners pay voted millage at the valuation level that existed when a tax levy took effect. This “rollback'' keeps revenue from levies from rising over time, except for new construction.
Schools and county and local governments do collect extra money from a revaluation on their “inside” millage, which is set by state law. Huron County's 10 inside mills are divided between the schools (4.5 mills), the county (2.1 mills), and the townships (3.4 mills).
State law also requires school systems to collect at least 20 mills, which causes districts without additional millage to collect extra revenue from property owners when valuations rise. But, Mr. Elmlinger added, when that occurs, the state reduces its funding to those districts by a roughly equal amount.
All of Huron County's school districts are at the 20-mill “floor,” the auditor said.
“It's a Catch-22 for the schools,” he said. “They're going to get more tax revenue from the local property owners, then they're going to lose it at the state level. And unfortunately, what the taxpayer remembers the next time a levy comes up is that they're already paying more.”
Mr. Elmlinger said Huron County will receive about $160,000 in extra funds from the revaluation, money that goes mostly into the general fund.
John Zeitler, director of Lucas County's office of management and budget, said the county will reap about $2.15 million in extra revenue because of the revaluation. Lucas County expects to collect about $15 million in property taxes this year, accounting for 11.5 percent of its general fund budget.
In Erie County, Auditor Jude Hammond said residential values increased slightly more than 15 percent, with Lake Erie vacation areas leading the way.
“The hot spots would be along the lakefront, generally in the eastern portion of the county, Huron and Vermilion,” he said. “And we also have Kelleys Island, which is a unique market in itself.”
The county mailed tax bills last week and has set Feb. 23 as the deadline for first-half payments.
In determining the value of a house, Mr. Hammond said, his office looks mainly at sales in the preceding three years and seeks “to stay between 90 and 95 percent of the sale price” for similar properties in the same neighborhood.
“If you look at a sample size, and you look at the average sale price of a home, some are below average, and we don't want to overtax them by setting it at 100 percent,” he said. “Our goal is to treat people fairly.”