The Harris County Appraisal District announced earlier this year that tax assessments for office properties would be headed up in 2013. However, officials with the Building Owners and Managers Association (BOMA) say no one was prepared for just how high the value increases would be.
Downtown properties were hit especially hard -- with a 58% average increase over 2012. Citywide, high-rise office buildings showed a 48% valuation hike and low-rise properties were up 23%.
"Such incredible percentages in one year is absurd and more than a little disturbing," according to BOMA executive vice president and chief operating officer Tammy Betancourt.
Why the Increase?
Houston's resurgent economy is creating increased demand for office space. More sales, increased occupancy, and higher rents help raise the averages that the appraisal district uses in assessing values.
"You have a lot of activity throughout 2012 that shows the market for Class A and Class B office buildings has really improved and values have gone up significantly," Guy Griscom, the assistant chief appraiser for commercial properties told the Houston Chronicle.
Houston BOMA members say they are extremely concerned about the negative impact that higher tax appraisals will have on businesses.
Since property taxes are nearly always passed on to tenants as an operating expense, every company leasing space in Harris County will potentially see a significant increase in their bills, Betancourt explained.