High assessments add to housing crisis

Letter to the editor

Posted: Tuesday, December 05, 2006

This is in response to the lack of affordable housing. Your articles and editorial fail to mention one possible factor in the mix - high assessments. Given the city's need for revenue, it is understandable that we hire and support an assessor who is determined to bring assessment levels up to "market level." An assessment policy that follows the market, however, (instead of establishing realistic valuations that support other parts of our economy) creates a self-perpetuating "bubble."

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Higher assessments create higher expectations on the part of sellers, who pay taxes based on these valuations, and lead to price acceptance in buyers. Higher assessments also drive up rents.

Offering tax relief or subsidies for developers who build low and middle income housing may be a good idea but it will reduce the extra revenue the city is gaining from higher assessments. Perhaps we should look at how fast houses are selling now, and whether they are beginning to sell below assessment value, as a first step in understanding what role our assessment policies may be playing in this housing problem.

Karl Hegg


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