CHARLOTTE — Mecklenburg County assessors made major mistakes in 20 of the 52 neighborhoods that had the highest percentage increases in property values in the widely lambasted 2011 revaluation.
That roughly 40 percent error rate was among the preliminary findings released Tuesday by a firm hired by the county to review the revaluation following a barrage of complaints from residents upset over their new, higher values. The county paid Wilson-based Pearson’s Appraisal Services $254,400 to conduct the review.
Pearson’s, reporting initial findings Tuesday to county commissioners, also said assessors made major errors in 15, or 10 percent, of 151 other neighborhoods the company selected at random. Five of those error-plagued neighborhoods were commercial areas, according to a PowerPoint presentation Pearson’s made at the commissioners meeting.
In a third preliminary finding of Pearson’s, a study of 369 individual properties, also chosen at random, unveiled that 12 percent of the revaluations contained major mistakes.
Despite the major errors — and other minor ones — the preliminary findings show that, for the most part, the 2011 revaluation was “acceptable” and carried out in accordance with North Carolina law.
Pearson’s representative Emmett Curl said he thought the revaluation would not have devolved into a debacle if the county’s informal appeals process for disputed values were more “customer-friendly.”
“I would not be here today,” Curl said.
Pearson’s concluded that 70 percent of properties whose owners appealed the revaluation at the informal level received a “no change” decision. By contrast, roughly 70 percent of property owners who appealed to the county’s Board of Equalization and Review received a “reduction in value” decision.
As a result, Pearson’s initial report makes broad recommendations to revamp the informal appeal process, suggesting that the county offer a “face-to-face” appeals option. “I cannot overstate the importance of this,” Curl said.
Curl also emphasized the study’s finding that properties were undervalued thanks to assessor errors about as often as they were overvalued.
But property owners with high valuations tend to complain about them, while those with low valuations do not, Curl said.
The lowest rate of revaluation errors occurred in housing developments, typically built after 1980, that have similar kinds of homes standing side by side, according to Pearson’s initial findings. “These neighborhoods make up a large percentage of total properties in the county,” a PowerPoint presentation slide said.
Most of the major errors, according to Pearson’s initial findings, were in “heterogeneous” neighborhoods — residential, commercial or a mix of both — where structures were built in different years, in varying degrees of quality and in a variety of sizes. The most problematic neighborhoods also tended to have high land-to-building ratios and a relatively high amount of teardown/in-fill activity, according to Pearson’s.
The PowerPoint presentation also contained some general recommendations, including one that appears to fly in the face of many commercial property owners who complained that their valuations were high because the county, for the first time, used an income-based model to partially appraise commercial properties in 2011.
Pearson’s has recommended that, in the future, the county should place “greater emphasis on (the) income approach.” Curl said it is the most accurate way to calculate the market value of a commercial building.
And, he noted, the income-based method is in widespread use elsewhere in the state.
The preliminary report also recommends that the county “fix neighborhoods with major issues. … We anticipate this process could be completed in 10 months to a year.”
The reception of the preliminary report by the commissioners was largely muted during the two-hour meeting, with the exception of one heated exchange.
Referring to the revaluation controversy, District 6 Republican Commissioner Bill James accused County Manager Harry Jones of trying to “cover it up.”
After denying the accusation, Jones said he made a mistake months ago when he opposed hiring an outside firm to review the revaluation. He said he now takes Pearson’s findings and recommendations “to heart.”
Otherwise, the questions directed at Curl by the commissioners sought to get at more specific findings and recommendations.
But, Curl said, those specifics won’t be available until the final printed version of the study — with 50 pages of findings and recommendations and another 150 of examples — is released Nov. 20.
Tony Brown can be reached at firstname.lastname@example.org, (704) 247-2912 or on Twitter at @tonymecktimes.