Property valuations: today's actual numbers don’t matter nearly as much as what they mean

 Up.

There’s no doubt that’s the direction Kyle is heading when it comes to property valuations. Of course, that’s not exactly news — Kyle has been growing rapidly over the last decade. What’s different this year is that in 2021 this growth is largely being fueled by commercial, not just residential, valuations.

The Hays County Appraisal District released its preliminary assessed valuations of real property in Kyle today and if you look at its tables, there’s a lot to digest there. But I’m less concerned about the actual numbers and more concerned about what those numbers represent. In order of importance, I would list the most important takeaways from HCAD figures are:

1. A major increase in new jobs coming to Kyle during the last year.
2. Kyle’s commercial growth is significantly outpacing its residential growth.
3. The City should remain in a sound financial position with the ability to notably increase services provided while, at the same time, possibly being able to lower the property tax rate.
4. Of all the numbers being tossed around with the release of HCAD’s tables, the two most important are that commercial valuations in Kyle grew by 27.9 percent last year as compared to 15.7 percent for single family residential.
5. Although the percentage growth of multifamily valuations was slightly higher than that of single-family (19.6 percent to 15.7 percent), concerns that multi-family units are overwhelming the city are unfounded. Multi-family accounts for only 12.8 percent of the total residential valuations.
6. Kyle is quickly becoming a major contributing part of a single, monolithic urban complex that will stretch along I-35 from Georgetown through San Antonio that will dwarf in both size and financial/political clout the so-called Dallas-Fort Worth Metroplex. (By 2050, Kyle will be the most populous city between Austin and San Antonio and might even achieve that distinction by 2030.)
7. Homeowners will complain once again when they receive their property tax bills later this year, neglecting two salient facts: First, that most of this increase will come from school taxes and second, and perhaps even more importantly, their financial net worth has also dramatically increased.

I solicited response from city officials to gauge their reactions to the HCAD numbers and to obtain, in their words, the significance of the numbers released, but received no response prior to publishing this story.

In its formal release of the property appraisals today, HCAD said:

“The overall market value of Hays County’s 2021 preliminary appraisal roll rose to $39.66 billion, up 19.10 percent from $33.30 billion in 2020. Commercial and industrial property increased in value 21.41 percent, up from $3.28 billion in 2020 to $3.98 billion this year.

“Almost 3,000 new homes and 68 new commercial buildings were added to the appraisal roll for 2021,” the district’s statement said. “Total new improvements added more than $1.18 billion in taxable value.”

The district has begun mailing appraisals notices to property owners who have until May 17 to appeal those numbers. Property owners can appeal on line by clicking here and then using the Online Appeal tab.

“Hays County remains a popular destination for new property owners with expanding job opportunities, good schools, and less of that big city feel,” the Appraisal District said in its statement. “The demand for land and homes creates a seller’s market which leads to an increase in sale prices. Traditionally, vacant lots show the largest increase in value and this year is no different with this category rising almost 40 percent from $928 million to $1.3 billion which is less of an increase than last year. Residential multi-family property grew to $2.7 billion, up 17.46 percent from last year’s value of $2.3 billion.”

In its statement, HCAD listed these numbers for an average home in the City of Kyle:

• 2020 residential market value: $215,919
• 2021 residential market value: $235,674
• 2020 residential taxable value: $207,424
• 2021 residential taxable value: $227,630

For Hays CISD, those numbers are:

• 2020 residential market value: $233,464
• 2021 residential market value: $258,103
• 2020 residential taxable value: $210,458
• 2021 residential taxable value: $237,177

Kyle home property tax valuations increase by 6.1%

Preliminary figures released today by the Hayes Central Appraisal District revealed the average market value for a home in Kyle increased by 6.1 percent over 2017, a percentage point below the average for the entire county.

The 2018 average market value for a home in Kyle, according to HCAD, is $197,237, below the average valuations in Buda ($256,472), Wimberly ($274,414) and especially Dripping Springs ($390,209), but higher than those in San Marcos ($187,070). Across Hays County, the average market value for homes increased by 7.1 percent.

It will not be known how this increase will effect the tax bills of individual property owners until the various Hays County taxing agencies set their tax rates for the upcoming fiscal year. Last year, the City of Kyle lowered its rate by three cents, but property owners faced a higher tax bill than the year before because of increased valuations coupled with the fact that none of the other taxing authorities, most notably the Hays Consolidated School District, which consumers more than 50 percent of the tax bill, adjusted their rates.

It should also be noted that last year the final property valuations, which are usually announced around the first week in August after all the protests are settled, were higher than the preliminary numbers posted in May 2017..

The HCAD said it began mailing 93,173 appraisal notices today and property owners have until May 30 to file a protest of their individual valuation. Last year, 14,602 property owners protested their appraisals.

"Hays County's overall preliminary market value for 2018 rose to $26.58 billion this year, up 13.3 percent from $23.46 billion in 2017," the HCAD said. "Commercial and industrial property increased in value by 12.61 percent from $2.22 billion in 2017 to $2.5 billion this year."

HCAD said vacant lots-tracts saw the biggest increase in value (37 percent) followed by residential multi-family property with an increase of 32.87 percent. "These increases were due to strong demand for residential and commercial sites, new construction, multi-family student housing and completion of new apartment projects," HCAD said in a news release.

"Hays County added 2,628 new homes and 83 new commercial buildings to the appraisal roll for 2018," HCAD said "Total new improvements added more than $981 million to the taxable value for 2018. Across Hays County, the average market value for homes increased by 7.1 percent."

In Kyle, the average market value for a home went from $185,890 last year to $197,237 in 2018.

Kyle homeowners could face 10 percent property tax increase this year

Even if the city’s tax rate remains stable, a Kyle homeowner who paid $947.69 in city property taxes in 2016 could face a bill of $1,042.22 this year, according to preliminary figures released today by the Hays Central Appraisal District. And that doesn’t include school district taxes, which comprise more than 50 percent of the typical property owner’s tax bill.

HCAD began mailing appraisal notices to property owners Monday.

"Hays County's overall preliminary market value for 2017 rose to $23.46 billion this year, up 10.04 percent from $21.32 billion in 2016," according to a HCAD statement released today. "Commercial and industrial property increased in value by 10.45 percent from $2.01 billion in 2016 to $2.22 billion this year. Residential multi-family property saw the biggest increase in value by 14.07 percent from $1.35 billion in 2016 to $1.54 billion this year. This increase was due to new construction, completion of new apartment projects and a strong demand for multi-family housing. Hays County added 2,085 new homes and 49 new commercial buildings to the appraisal roll for 2017. Total new improvements added more than $637 million to the taxable value for 2017. Across Hays County, the average market value for homes increased by 9 percent. Hays County continues to be one of the fastest growing counties in the country."

The average market value increase in Kyle was slightly higher than the county average — 9.9. percent, from $170,547 in 2016 to $187,202. More importantly, the taxable value on those properties saw a 9.97 percent increase from $164,873 to $181,318. That means even if the city maintained the current tax rate of $.5748 per $100 valuation, the average homeowner’s city tax bill could be $94.53 higher this year than last.

"How this year’s appraisals will affect Hays County homeowners’ tax bills remains to be seen," the HCAD statement said. "The county, cities, school districts and other taxing units will use the appraisal district’s values to set 2017 property tax rates and determine the amount of taxes property owners will pay."

The City Council has scheduled a workshop Saturday from 8 a.m. to noon for a preliminary discussion on the FY 2017-18 budget. It is expected City Manager Scott Sellers will propose a tax rate at that time, although he will not present council with his official budget proposal until its Aug 1 meeting, three days after a planned public release on Saturday, July 29 and shortly after HCAD releases its certified appraisal numbers.

Property owners who believe their properties were valued too high will have until the end of the month to file a protest to appeal those valuations to the HCAD in one of three ways: (1) in person at the HCAD’s district office in Kyle, 21001 North Interstate 35; (2) by phone at 512-268-2522 or (3) online at www.hayscad.com. Last year the Hays Central Appraisal District received 11,523 protests.