Atlanta property taxes: North-south divide plagues DeKalb

“The neighborhood has changed. We moved here because of the new elementary school,” Gurley, 76, said. “Now, my kids want me to move.”

Four of the houses on her street, Pinehill Drive, are selling for less than $32,000. Five years ago, homes in the neighborhood fetched between $120,000 and $150,000.

Less than eight miles way, contractors are adding a second floor, cathedral ceilings and hardwood floors to another home in unincorporated Decatur. The house isn’t on the market yet, but there has already been interest in the house, which will be listed for more than $700,000.

An analysis by the AJC found that many of the upper-class neighborhoods in north DeKalb that were previously insulated from the real estate crash are now beginning to slowly lose value. But driving around these subdivisions — filled with homes that house the staff for the U.S. Centers for Disease Control and Prevention, Emory University and other institutions — outward signs of the recession are hard to find.

For the second consecutive year, The Atlanta Journal-Constitution compared county tax appraisals to actual home sales prices in the five largest metro counties.

The newspaper examined hundreds of thousands of 2010 tax records and tens of thousands of 2009 sales to make the comparison. It found that, on average, Cobb and Fulton tax values were slightly less than sales prices, and Gwinnett tax appraisals were slightly higher than sales prices. In Clayton, the typical appraisal was more than 7 percent above market value.

But in DeKalb, the disparity leaped to 25 percent.

When a homeowner’s tax appraisal is higher than the actual value of the house, the homeowner is paying too much in property taxes.

The tax rate is about all that is similar between north and south DeKalb, which has taken the brunt of the real estate bust.

Countywide appraisals show the average home lost about $18,000 or 15.8 percent in value in 2010. Overall, DeKalb’s tax digest declined by $2.03 billion from 2009-2010. That’s a 3.1 percent drop.

While the overall numbers are staggering, the drop is less than any of the other counties in the five-county metro Atlanta region, the AJC’s analysis found.

However, DeKalb still has 7,000 to 8,000 appeals waiting to be reviewed, said Calvin Hicks, DeKalb’s chief appraiser. Another couple of hundred are pending in Superior Court. There are also a few appeals still pending from 2008. The county had 10,000 appeals in 2010 and about 9,000 in 2009.

“It took us working into 2010 to get through most of the 2009 appeals,” Hicks said. “We’ll be working through 2010 appeals in 2011. You get a snowball effect that begins to build. I don’t know how we can expedite the process.”

Hicks believes DeKalb was ahead of the rest of the region last year when it aggressively started to address appeals, which is why the numbers are not as bad as some of the other counties.

Last year, the AJC found DeKalb lost $1.8 billion in appraised residential value, more than any other county in the metro area. DeKalb, Fulton, Clayton, Cobb and Gwinnett counties lost a combined $4.2 billion in devaluation. This year, residential tax appraisals in the five-county region lost a combined $17.8 billion.

“Last year, DeKalb made much lower or higher decreases than some of the surrounding counties,” Hicks said. “Some of these counties that are now having to make major changes in values, [those are] the same changes we addressed in 2009.”

Budget woes

County officials were hoping the stability in the north end of the county would continue and offset some of the losses in south DeKalb.

Neighborhoods on the northside saw drops of about 10 percent compared to 30 percent in other areas. Values only dropped 6.7 percent in one corner of north DeKalb off Peachtree Industrial Boulevard, according to DeKalb property records.

“North DeKalb is not the same as south DeKalb. It’s going down just a little bit,” Hicks said. “We had one guy on the northside say he’s seen one foreclosure in his neighborhood. Just one. Imagine, someone in the other side of the county steps out the door and foreclosures is all you see. It’s just a different world.”

Sales data reviewed by the AJC found the average sale in DeKalb was $163,625. Only Clayton had a lower average sales price.

Overall, DeKalb’s values were 25 percent above sale prices, according to the AJC’s analysis. About a third of the sales were bank sales. The problem is that many of these homes are appraised at more than twice the price they sold for, records show.

The fair market sales were only about 3 percent overvalued. That means the homes are appraised 3 percent higher than the average sales price in DeKalb.

Despite the stability in north DeKalb, Hicks estimates that the county could lose another $750 million in value in 2011. Hicks said he expects the county to catch up and level the values and market prices by 2014.

CEO Burrell Ellis said that time line is no different from any other county in the region.

“These people want to move somewhere not impacted by foreclosures and the economy. Where is that? That’s nowhere. Even the rural communities are impacted,” he said.

The issue of sales value vs. county-appraised value arose during Tuesday’s county commission meeting.

Commissioner Elaine Boyer, who represents north DeKalb, asked the CEO to look at property values.

“There is the philosophical argument that assessments aren’t real numbers,” Boyer said. “Sales are real numbers. That’s how my constituents want to be taxed.”

Hicks said the county is addressing the discrepancies and working on the backlog of appeals, but it’s hard to catch up with less staff. In May, he lost 15 workers to early retirement. After arguing with commissioners, he was allowed to refill some of the positions.

“I had 76 people in 2009 and now I have about 58,” Hicks said. “I know Gwinnett is tackling the same problem and turning to outsourcing. But we just don’t have the money.”

He still has eight vacancies, and in the positions he has filled, the new hires are all trying to learn the process.

More than 800 county workers took early retirement this year, which was part of a cost-saving effort to meet property tax declines.

Next year could bring even more cuts in staff.

Last Wednesday, Ellis unveiled his proposed 2011 budget, which includes a $563 million spending plan and a 2.32-mill tax increase.

However, county commissioners, who have the final approval on the budget, have said they will only raise taxes after the government is reorganized and deep cuts are made.

“I am not convinced we need to raise taxes,” said Commissioner Lee May, budget committee chairman. “There still is a lot of excess in the government.”

Last year, Ellis proposed raising the millage rate. Commissioners rejected that and opted to cut more than $100 million from the budget.

On the northside

In north DeKalb, Wyndy Amerson said she is not willing to pay any more taxes. At $4,500 a year, she feels she already pays too much for what she gets.

Amerson said she is waiting to hear back about her appeal from July 2009. Her property is currently valued at $362,000.

The 55-year-old divorced mom said she doesn’t mind paying for services, but she is frustrated that the value of her house doesn’t match the economy or her neighborhood.

“My taxes went up in the last three years $800,” she said. “The taxes in DeKalb are too high for what you get. All the mismanagement and corruption — we’re just paying lawyers’ fees to dig them out of holes.”

Amerson bought her four-bedroom house in the Leafmore subdivision off LaVista Road in 1984. She raised three boys there and now lives with her Humane Society hound, Max.

The 50-year-old brick home has hardwood floors, fireplaces and a big backyard, but doesn’t compete with some of her neighbors.

“My house hasn’t changed since ’61 besides paint. It’s not a mega-mansion,” she said. “It’s a house that raised three boys and it looks like it. It definitely doesn’t have the granite counters and heated bathroom floors.”

At 2,800 square feet, Amerson had one of the biggest houses in the neighborhood when she moved in. Now, the brick ranches are all being gutted and expanded. Her house looks tiny next to them, she said.

Like her three children, Amerson graduated from Lakeside High School and remembers front-yard baseball games. She sometimes rides her bicycle to her job at the Department of Veterans Affairs, but those are things she is willing to give up for affordable taxes, she said.

“My income didn’t go up to support the taxes,” she said.

The three-bedroom ranch house behind Amerson’s house is listed at $400,000, but it has gotten little interest since it went on the market in August, she said. Like her home, the ranch house has not been upgraded like others in the neighborhood.

“I was hoping to sell before the school system redistricts,” she said. “It’s too big a house for me. With the upkeep, the heating and the yard, I just can’t keep up with it.”

Down the street, other empty nesters like Amerson have already left the neighborhood.

Developer Gus Pounds, who went to Lakeside with Amerson, bought a 1,668-square-foot ranch a few houses down for $271,000. The house is being gutted and will be put on the market for $700,000.

“The neighborhood has everything from $1.5 million McMansions to ranches selling under $300,000,” said RE/Max Executives Realtor Jeannie Mills. “The reason the area is extremely, extremely stable compared to other areas is because it’s near CDC, Emory and Children’s Healthcare. You have an educated work force. Foreclosures used to be unheard of here. Now there’s one or two.”

Those few northside foreclosures are quickly scooped up by builders for tear-downs. The ranches and brick homes, like Amerson’s, just aren’t selling anymore, said Mills, a Realtor for 32 years.

Michael Jennings knew about the Leafmore neighborhood’s stability and immediately started to take advantage of the market when he saw the economy slipping. The former investor is now a Realtor with Keller Williams, who buys homes in the area and renovates them.

“Three or four years ago, you put a sign in the yard, and the house would be gone in a day. Now, I have to do renovations to get the house to sell,” he said. “Four years ago, $300,000 would buy you a tear-down. Now, $300,000 gets you a move-in.”

Jennings said he has seen the values dip, but still feels the neighborhood is one of the most stable in the region.

“Older people don’t understand those values weren’t real. Now the values are coming down and they are losing some money,” he said. “Many of them will stick it out and stay in this neighborhood. They’ll sell to their kids.”

On the southside

Back in Belvedere, Barbara Daws gasps when she hears about the taxes in the Leafmore neighborhood. She pays $1,300 a year on her home and still thinks it’s too much.

Her property value decreased from $133,800 to $108,500 last year. She has no plans to move but knows that she would never get anything near that amount. The house next door is the same size: 960 square feet. It’s appraised at $110,000 but is listed for $22,900.

“It’s been vacant for seven years. They won’t cut down the dead trees or take care of this standing water. Lots of rodents and bugs,” Daws said as she points to the boarded-up windows at 3478 Pinehill.

“The neighborhood used to be families,” said Daws, who moved there in 1954. “All the owners live in California and all over the place. They don’t even check on the houses.”

Daws and her neighbors, Betty and Jonathan Gurley, are a few of the only original residents left on the street.

“It’s not safe anymore. We pay a lot in taxes to be safe,” Betty Gurley said.

Diabetes has led to two knee replacements for Gurley. Her 81-year-old husband is in a wheelchair.

“We’re on a fixed income and we’re really low in money because we spend $2,000 a month on medication,” Gurley said. “I wouldn’t mind paying if I knew it was getting us something.”

Even the mansions in south DeKalb’s prestigious Greenridge subdivision in Lithonia have been hit.

Property records show New Birth Missionary Baptist Church’s Bishop Eddie Long bought his five-bedroom brick home for $1.1 million in 2005. The 5,000-square-foot home is now appraised at $677,400. That’s a 39 percent drop from its $1.13 million value in 2008.

Mills said there is little difference between those homes and the ones being built in the Oak Grove Preserve neighborhood in north DeKalb. They all have sunken tubs, room-sized closets and luxury kitchens.

But Oak Grove is selling. Four or five of the luxury homes in Oak Grove have sold for about $1.4 million each, Mills said.

“I don’t sell in south DeKalb. It’s another world,” Mills said.

“People stay here because of the convenience and the good schools. It keeps property values good,” Mills said. “When you’re inside 285, dirt is gold. On the outside of 285, dirt is red clay.”