Demand in the MAT-SU drives up assessments

PALMER—Assessment notices for 71,255 property owners in the Matanuska-Susitna Borough recently went out in the mail. The value of property in the MAT-SU continues to increase. Assessments on the average went up 11 percent this year. A home worth $200,000 last year might now be worth $222,000.Home prices have doubled in the MAT-SU since 1996, according to the Alaska Department of Labor and Workforce Development. The market is driving the increase. Every year, state law requires the Borough to find the full and true value of property. The Assessor's Office does not create value. It interprets the market to come up with the assessed values. Assessor Allen Black said the Assessor's Office first reviews all the property, then systematically values it based on criteria that can be quantified and measured. "We take the entire inventory of all properties in the Borough, segment them into like-kind of groups, and statistically come up with values of properties within the same group." For example, a ranch-style house from the 1970s would be in a separate category than a ranch built in 2000. Other factors that affect assessed values include the price of construction materials and the age of the property. Since the Katrina hurricane disaster, building components have gone up astronomically. "It has a cascading effect on older property," Black said. Black said the MAT-SU is attractive because land and home values are less than in Anchorage, though that gap is narrowing. In the first half of 2005, the average sales price of a single-family home in the MAT-SU was $210,937. By contrast in Anchorage a similar house would go for $277,530."More people are willing to take on a commute for lower housing costs. Because people are moving in here, there is more competition for buildable land in the core area, so that drives up the prices of the land. It's been growing since 1995, back then there were only 500 to 600 new homes per year, whereas the last three years combined add up to 4,500 new homes," Black said. Housing is the MAT-SU's largest economic export, according to Economist Neal Fried with the state Department of Labor. New arrivals to the MAT-SU last year pushed up the population five percent to just over 74,000. From Anchorage, alone, 8,539 people moved here between the years 2000 and 2004.Commercial construction has been on the rise as well. "The Valley has had more commercial activity in the last two years than in the prior ten years," Black said. In 2004, 270 new commercial or industrial buildings went up. In 2005, 135 commercial activities occurred. The development of new commercial properties does help lessen the burden of property taxes for residential owners. Although assessments rose, on average, 11 percent this year, that doesn't necessarily mean that property taxes will rise similarly. In August the Assembly passed a property tax cap. The effect of the tax cap is that it will limit the tax revenues that can be generated, thereby limiting the mill rate. The mill rate is not set yet and must be set by May 31.Property owners should verify that the Assessor's records of their property are correct in terms of size, number of baths, and other inventory items. Property owners can appeal their assessments until March 30. —End—