HomeMy WebLinkAboutAgenda 08-26-2025; 6-b - Update on Revaluation Appeals, Studies, and the Tax Assessment Work Group 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: August 26, 2025
Action Agenda
Item No. 6-b
SUBJECT: Update on Revaluation Appeals, Studies, and the Tax Assessment Work Group
DEPARTMENT: County Manager and Tax
Administration
ATTACHMENTS: INFORMATION CONTACT:
1. Vertical Equity Study Results Travis Myren, 919-245-2308
2. Memorandum on Neighborhood Nancy Freeman, 919-245-2735
Level Analysis
PURPOSE: To receive an update on the status of property tax appeals, the countywide and
neighborhood level equity studies, and to approve the charge, composition, and role of the Tax
Assessment Work Group.
BACKGROUND: The Orange County Tax Administration Office completed a revaluation of real
property in 2025. The goal of the revaluation is to make assessed values more reflective of market
values. Orange County currently conducts a revaluation of real property every four years.
Although the 2025 revaluation followed this four-year schedule, the County was also mandated
by the N.C. Department of Revenue to conduct a revaluation in 2025 because the difference
between assessed values and market sales had reached a threshold that required it.
Property owners received notices of their new assessed values in March 2025. Most property
owners experienced a marked increase in assessed value compared to the prior year. On
average, the assessed value of residential properties increased by 52%.
The new assessed values caused concern among some property owners about the accuracy and
fairness of the revaluation process. Concerned residents noted particular disparities in historically
Black neighborhoods. In response, the County emphasized the importance of the appeal process
to adjust assessed values if errors or oversights in the revaluation process resulted in an
inaccurate value. The Tax Office offered educational and technical support on how property
owners could file an appeal of their new assessed value and offered to schedule appeal
workshops in communities.
The County also contracted with a vendor to conduct a countywide vertical equity analysis.
Vertical equity means that properties should be assessed at the same proportion of their fair
market value, regardless of the property's value, to ensure that lower-priced properties and higher-
priced properties exhibit the same ratio of assessed value to actual sale prices.
The Tax Administration Office is also conducting neighborhood level equity analysis to determine
if inequities or other anomalies exist in assessed values at the neighborhood level.
2
This report provides a status update on appeals, the results of the countywide and neighborhood
level equity analysis, and the Tax Assessment Work Group the County Manager recommended
in June.
Appeal Status
The Tax Office received a total of 3,348 informal appeals during the informal appeal window that
was open from March 21 to April 30, 2025. Following the informal appeal window, the Tax Office
received an additional 908 formal appeals for a total of 4,256 appeals. Of those, there are 3,909
unique properties, with the overlap representing properties that were appealed at both informal
and formal levels. Of the 908 formal apeals, 35 were not submitted by the deadline and will not
be considered. Additional appeals will be received as property owners have 30 days to appeal
decisions, and the last mailing of decision notices on informal appeals is expected to be at the
end of August.
Of the 3,909 unique properties appealed, a total of 3,637 were appeals of residential property,
and 272 were appeals of nonresidential property. The Tax Office and the Board of Equalization
and Review have issued decisions on 3,094 residential appeals and 173 nonresidental appeals.
Value adjustments made on residential appeals had a median decrease of $25,990 in value, or
about 6%, while value adjustments on nonresidential properties had a median decrease of
$288,700, or about 13%.
The 944 remaining appeals, along with additional appeals of informal decisions, are scheduled to
be completed by mid-December 2025. The Board of Equalization and Review approved post-
adjournment meetings through December 11, 2025.
Countywide and Neighborhood Equity Analyses
As stated above, the County contracted with a vendor to conduct a vertical equity analysis of
countywide values. The analysis stratified properties by age, value, and geographic location.
Graphs of the results are attached. That analysis showed that, in general, values were within the
standards for vertical equity established by the International Association of Assessing Officers
(IAAO) when outliers were removed from the analysis. The vendor removed any property where
the assessed value deviated from the actual sale price by 25% or more which accounted for
approximately 950 of 5,800 sales.
The Tax Office independently conducted an equity analysis on the County's 1,026 assessment
neighborhoods. The IAAO specifies that measures of vertical equity are only representative of
possible inequities in neighborhoods with five (5) or more sales. Of the neighborhoods with more
than five (5) sales, the Tax Office identified 86 neighborhoods that were outside of the equity
standards used by the IAAO. Of the neighborhoods with less than five (5) sales, the Tax Office
examined those neighborhoods for consistency and reasonableness and identified an additional
76 neighborhoods that require a more thorough review. The Tax Office is also studying the 19
neighborhoods identified by the Orange County Property Tax Justice Coalition for possible value
adjustments. A total of 171 neighborhoods have been identified by the Tax Office for closer review.
In order to expedite that review, the County Manager has authorized the Tax Office to contract
with private professional appraisers to supplement current staffing. With this additional staffing,
the Tax Office estimates that the neighborhood reviews will be completed by mid-November, prior
to the Thanksgiving holiday.
3
If value adjustments are made, property owners will receive a notice of the change and will have
15 days to appeal that change. If the change in value also changes the amount of property tax
due, tax payers who have already paid their property taxes will be issued a refund if the amount
is lower than their original tax bill or a notice of additional tax due if the amount is higher than the
original tax bill.
Tax Assessment Work Group
In June, the County Manager recommended the creation of a Tax Assessment Work Group to
study and make recommendations to improve and ensure the fairness, accuracy, and consistency
of the tax assessment process. The Manager is also recommending that the County select a
consultant through a request for proposal (RFP) process to work with the Work Group to examine
processes and procedures, identify best practices, and make recommendations to improve the
equity, consistency, and accuracy of the assessment process. The consultant would also be
asked to recommend the organizational capacity, staffing, and structure required to implement its
recommendations. The County Manager is seeking the Board's approval of the charge,
composition, and role of the Work Group as described below.
• Charge
The Tax Assessment Work Group is charged to evaluate the policies, processes, and
procedures used by the Orange County Tax Office to assess property values. The Work
Group will provide feedback and input to a consultant retained by the County to make
recommendations on changes and enhancements to the tax assesment process that will
improve and ensure the accuracy and fairness of property assessments.
• Composition
1. Three Commissioners 8. Representative from the North
2. County Manager Carolina Housing Coalition
3. Tax Administrator 9. Representative from the Orange
4. Budget Director County Property Tax Justice
5. Director of Civil Rights and Civic Coalition
Life 10. Non-Profit Housing Provider
6. Community Relations Director 11.Community Representative from
7. Durham and/or Wake County Tax District 1
Assessor 12.Community Representative from
District 2
The County Manager is requesting feedback on this composition in general, the
appointment of three (3) Commissioner representatives, and a discussion of whether and
how community representatives from District 1 and District 2 could be selected and
appointed. One (1) of the three (3) Commissioners will also need to be appointed to serve
as Chair of the Work Group.
• Roles
The roles of the Work Group will be partially driven by the timeline to begin and finalize the
work. For example, if the Work Group is asked to review the scope of services for
consulting services and participate in vendor selection, the actual study would not begin
for several months. As a core role for the Work Group, the County Manager is
recommending that the Work Group provide feedback to the consultant at milestone stages
4
of the project: data gathering, data analysis, alternatives analysis, recommendation
development, and the finalization of recommendations.
• Timeline
The timeline for this evaluation will depend on the ultimate scope of work and availability
of data. Once a consultant is in place, the Work Group will establish a timeline to complete
its work.
FINANCIAL IMPACT: The cost to hire a consultant is not known at this time.
ALIGNMENT WITH STRATEGIC PLAN: This item supports all of the goals and objectives of the
Strategic Plan as reliable and trusted tax values are fundamental in supporting all operations of
County government.
RECOMMENDATION(S): The Manager recommends that the Board receive the report and
provide input and approve the charge, composition, and role of the Tax Assessment Work Group.
Attachment 1 5
Results of the Vertical Regression Study for Orange County 2025 Revaluation
2024 Versus 2025 Residential Valuation Changes
There are three charts that show the breakdown of the amount of value change from
2024 to 2025.
6
The chart below shows the percentage of residential properties broken out by the range of value increase.
2024 vs 2025 Valuation: Percent of Residential Properties by Value Increase
Ranges for Land, Improvements, and Total Value
N 70
O1 60
50
N 4
G. 0
O 30 -
a 20
10
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Value
tih ti
Value 0-19% 20-49% 50-79% 80-100% 101-120% 121-150% 151-200% 201%+
Decrease Increase Increase Increase Increase Increase Increase Increase Increase
■Land Valuation 2.959 3.331 12.191 19.875 18.673 9.369 11.899 14.24 7.463
■Building Valuation 0 0.264 0.266 0.466 1.537 6.196 67.901 17.843 5.527
■Total Valuation 0 0 0.002 0.144 0.922 3.933 36.805 52.028 6.165
Value Increase Ranges
Parcel Count - Value Increase Ranges
Decrease 0-19% 20-49% 50-79% 80-100% 101-120% 121-150% 151-200% 201%+Increase Total Parcels
Land 1,307 1,471 5,384 8,778 8,247 4,138 5,255 6,289 3,296 44,165
Improvement 128 129 226 745 3,004 32,922 8,651 2,680 48,485
Total Valuation 1 70 447 1,907 17,845 25,2261 2,989 48,485
7
The chart below shows the percentage of increase in value for residential properties in each of the County's Rate Code
Districts. Map of Rate Codes in the County is available.
2024 vs 2025 Valuation: Percent of Value Change for Land,
Improvements, and Total for Residential Properties Shown
txo by Rate Code District
s 200
U 180
160
140
cC 120
100
p 80
++ 60 -
N 40
i 20
0
at0 to�e\t�a°La<<p\ <<`ed oQe do C o 0 4 � 'y
k ca oc°
0
`5mo O
ea O
oL
�� `� �o oti Lti Lti Lo ti �o �L oti �a ■ Land Valuation
■ Building Valuation
Rate Code District ■Total Valuation
Parcel Count-Rate Code Districts
16 03 09 123 15 124 08 00 110 132 121 14 122 19 07 111 04 117 02 06 01 125 Multiple
Land 1,401 3,278 2,239 3,681 1,635 1,725 442 4,774 2,128 144 4,914 269 11,329 192 849 334 1,607 525 350 4 891 27 20
Improvement 1,419 3,297 2,251 3,918 1,664 1,754 445 4,848 2,151 588 6,214 277 14,735 202 902 344 1,628 536 350 4 892 27 33
Total Valuation 1,419 3,297 2,251 3,918 1,664 1,754 445 4,848 2,151 588 6,214 277 14,735 202 902 344 1,628 536 350 4 892 27 33
8
The chart below shows the percentage of increase in value for residential properties in each of the County's Rate Code
Districts. Map of Rate Codes in the County is available.
2024 vs 2025 Valuation: Percent of Value Change for Land,
Improvements, and Total for Residential Properties Shown
by Building Category
O 250
Cu0
M 200
V
3 150
ca
100
O
50
L 1 ■ ■ 1 ■ 1
a o
■ Land Valuation
■ Building Valuation
Building Category ■Total Valuation
Parcel Count-Building Category
APARTMENTS COMMERCIAL FARM BUILDINGS HOTEL-MOTEL INDUSTRIAL INSTITUTION MANUFACTURED OFFICE RESIDENTIAL RETAIL WAREHOUSES
Land 264 452 14 24 63 21 1737 345 39519 159 160
Improvement 788 701 17 39 80 32 1757 960 43513 308 290
Total Valuation 788 701 17 39 80 32 1757 960 43513 308 290
9
Price-Related Differential (PRD) Results of Residential Properties
There are five charts that show the PRD calculated for Sales of Residential Properties.
The IAAO upper and lower standards are shown on the graphs. The PRD for both Actual
Sale Price and Time Adjusted Sale Price (TASP) are graphed. However, reviews are based
on the PRD of the Actual Sale Price and is indicated by the darker, more noticeable blue.
Outliers have been removed from the sales, and the criteria to remove them are sales
that are more than 25% lower or higher than the corresponding property value.
10
The graph below shows the PRD of the useable sales (excluding outliers) and time adjusted sales sorted by quintiles of the
sales prices. The quintiles are ranges of sales prices that include approximately an equal number of properties.
1.04 PRD by Quintile - Actual Sale Price Vs, TASP
t PRD (Actual Sale Pricey
IAAD Upper Bound (1.03) PRD (TASP)
1.03 -----------------------------------------------------------------------------------
o
a
1.02
a�
1.01
a
QJ
1.fl0
a�
o•
a�
Y 0.99
L
a
0.98 ------- -------------------------------------------------------------------------
IAAO Lower Bound (0.98)
ti°�oo x
oo oo o�000 o
0 0 0 0� o�
ho
Quintile Sale Price Ranges
Parcel Count - Value Quintiles
$0-$314,700 $314,800-$443,300 $443,400-$594,400 $594,500-$803,000 $803,100+ Total
439 982 894 755 943 4013
11
The graph below shows the PRD of the useable sales (excluding outliers) and time adjusted sales sorted by age of the building.
1.04 PRD by Age of Building (AYB) - Actual Sale Price vs. TASP
t PRD (Actual Sale Price)
PRD RASP)
IAAo upper Bound (1,03)
1.03 --- -----------------------------------------------------------------------------
0
a 1.02
L
1.01
a�
1.00
a�
L
a 0.99
0.98 ------------------------
IAAO Lower Bound (0.98)
1939orOlder 1940s 1990s 1990s 100s 1980s 1960s 2060s 2010s 2020s+
Decade Built
Parcel Count - Age of Building
1939 or Older 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s+ All
144 90 215 294 338 510 684 652 373 713 4013
12
The graph below shows the PRD of the useable sales (excluding outliers) and time adjusted sales sorted by the seven
townships in the County. Note: Chapel Hill Township includes both Chapel Hill properties and Carrboro properties. A map of
the townships is available.
1.04 PRD by Township - Actual Sale Price vs. TASP
--a-- PR❑ (Actual Sale Price)
IAAO Upper Bound (1.03) PRQ (TASP)
1.03 ----------------------------------------------------------------------------
0
n.
-- 1.02
.10
v
ai 1.01
0
a
M 1.00
v
or
a�
u
❑.99
0.98 --------------------------------------------------------------------------- ------
IAAO Lower Bound (0.98)
el
moo`
-lz�N L
Township
Parcel Count - Townships
1 - Little River 2-Cedar Grove 4-Cheeks 4- Hillsborough 5- Eno 6- Bingham 7-Chapel Hill Total
115 162 772 622 235 200 1907 4013
13
The graph below shows the PRD of the useable sales (excluding outliers) and time adjusted sales sorted by the building types.
1.04
PRD by Building Type — Actual Sale Price vs. TASP
t PR❑ (Actual Sale Price)
PRO (TASP)
AAO Upper Bound (1.03)
1.03 --------------------------------------------------------------
0
a 1.02
4-
W
1.01
a
1.00
Of
C6
a ❑.99
0
.98 ----------
[AAq Lower Bound {0.98}
Manuf Home Modular Single Fam
Building Type
Parcel Count - Building Type
Manufactured Home Modular Home Single Family Home All
107 41 3865 4013
14
The graph below shows the PRD of the useable sales (excluding outliers) and time adjusted sales sorted by Census Tract.
1.05-
PRD by Census Tract - Actual vs TASP
--- IAACt Lower Bound S0.g81
--- IAACI Upper Bound(1.03)
PRD(Ac[Udl]
1.04
PRD[TASP]
1.03 ---------- ------ ----------------------------------------------------------------------------------- --- ---f--- --¢--¢-- ---{---------------------
IL i
1.02
c
0 1.01
i
ai
°C 1.0❑
d,
u
a
0.99
0.98 ------ - - -- -- -- --
0.97
rl Ln M:) rn CO M 0 N m '�I' C 4 Cn It ry ry rn It Ln m rn It to r W M 0 '+ 0 0 0 0 o N m - ry N rn r N
r4 r4 0 0 0 0 0 0 0 a a o 0 a 0
0 0 0 0 0 0 r• OO w 0 0 C O1 C] C] r-i r-I r-I r-i r-i N N N N N N N r•7 � u'1 r• CO G1 G1 � r-I r-1 rq N N
C) C] C7 C] O C7 O O O 9 C7 C7 0 r-i r-i r-i .--I r-I r-1 r-1 r-1 r-1 r-I .--� r-1 r-1 r-1 r-I r-I r-I r-I ri r-1 r-1 r-1 N N N N N
rH ,-1 rl rH r-� ri r-I rl r-1 N ri ri r-1 rl rl rl rl ri rl rl rl rl r-1 .--I r-1 r-I r-I .-i rl rl rl r-I rl r� rl rl r-I rl r-1 r-I
Census Tract
Parcel Count-Census Tract
10701 10705 10706 10707 10708 10709 10710 10802 10903 10904 10902 10903 10904 11001 11002 11103 11104 11105 11106 11107 11204 11206 11207 11208 11209 11210 11211 11300 11400 11500 11700 11800 11902 11903 11904 12101 12102 12103 12201 12202 All
80 121 141 17 13 13 77 160 105 35 157 71 77 202 262 88 251 148 75 320 101 74 52 182 91 78 92 26 83 59 40 51 86 47 84 72 64 70 104 144 4,013
15
Price-Related Differential (PRD) Results of Commercial or Non-
Residential Properties
There are five charts that show the PRD calculated for Sales of Non-Residential
Properties. The IAAO upper and lower standards are shown on the graphs. The PRD for
both Actual Sale Price and Time Adjusted Sale Price (TASP) are graphed. However,
reviews are based on the PRD of the Actual Sale Price and is indicated by the darker,
more noticeable blue. Outliers have been removed from the sales, and the criteria to
remove them are sales that are more than 25% lower or higher than the corresponding
property value. Commercial / NON-Residential is based on a smaller sample size, and
several categories have limited data. The PRD does not factor in Income, which is a
primary valuation method for commercial, or non-residential properties.
16
The graph below shows the PRD of the non-residential useable sales (excluding outliers) and time adjusted sales sorted by
quintiles of the sales prices. The quintiles are ranges of sales prices that include approximately an equal number of properties.
PRD by Quintile - Actual vs TASP
1.06 t PRQ (Actual sale Price)
PRID (TASP)
r. 1.05
°- 1.04
— IAAO Upper Bound (1.03)
1.03 ----- ----------------------------------------------------- ---------------------
L
1.02
42 1.01
1.00
L
0.99
IAAO Lower Bound (0.98)
0.9$ ----------------------------------------------------
`'�°o a°goo oA
0
53
Quintile Sale Price Ranges
Parcel Count - Quintiles
$0-$215,700 $215,800- $290,500 $290,600-$507,600 $507,700-$2,331,478 All
114 169 208 133 624
17
The graph below shows the PRD of the non-residential useable sales (excluding outliers) and time adjusted sales sorted by the
building types.
PRE} by Building Type -Actual vs TASP
1.30 ---- IAA0 Lower Bound(0.98)
---• IAAO upper Bound(1.03)
PRD(Actual)
PRD(TASP]
1.25
1,20
a
m
C
° 1.15
7V
❑
N
1.10
v
1.os
------- ----------------------------------------------------- ------------------------- ------------------------------------------------------ --------- -------- ---------
1.00
0.95 C C) E N 7 N y c '0 ❑ C 0 CDY IA ❑ A L N
N =x 1p LN N � ❑7. qV v 7 y -V rn c V ad m I
t 03 LiC J0 -0G VLn
00
QL m p 0 5
m sa ° CI. ❑,NG 2a y'`❑NC°.
Ln 3 r
Building Type
Parcel Count-Building Types
Apt-Garden Apt-High Rise Bank-Branch Bank-Bsmt Bar/Tavern Carwash-Auto Carwash-Driv, Carwash-Self Condo-Res Conv-MultUse Day Care Dental Clini Fast Food Flex-Indust Laundromat Manuf-Light
97 2 1 1 3 1 1 2 504 1 2 1 1 2 2 2
Parcel Count Count-Building
Ofc-Condo Ofc-Conv Res Ofc-Med Ofc-Med Con Ofc-Modular Office Parking Deck Repair Garag Restaurant Retail Condo Retail Store Supermarket Whse-Distrib Whse-Mini-High Whse-Storage All
47 4 1 9 1 20 2 3 6 8 9 1 3 1 9 747
18
The graph below shows the PRD of the non-residential useable sales (excluding outliers) and time adjusted sales sorted by
Census Tract.
PRD by Census Tract -Actual vs TASP
--- IAAO Lower Bound 10.981
125 --
IAA0 Upper Sound[1.03)
PRO(Actual)
PRD(TASP)
1.20
0
a
a
1.15
QJ
a
v 1.16
v
a
a
V
1.00
fl.95
In n C9 01 N M N rrl V In LD n -t to n co Q O Q Q O M
Q Q Q Q P Q Q Q Q ❑ Q O Q Q Q Q Q O Q Q Q Q O Q Q Q Q Q Q Q
00 On Q Q [] .-[ '-i '-1 r-1 '-1 N N N N M c} 1O n D7 c1h 0 01 rl 'i N N
4 -4 N N N N
r4 -� '-i r� ri r� rl ri r� rl
Census Tract
Parcel Count-Census Tract
10705 10707 10708 10709 10804 10902 10903 11001 11002 11103 11104 11105 11106 11107 11204 11206 11207 11208 11300 11400 11500 11700 11800 11902 11903 11904 12101 12103 12201 12202 All
25 62 9 4 1 9 1 15 15 18 2 3 1 2 1 51 32 5 9 58 43 59 38 25 18 22 76 49 40 54 747
19
The graph below shows the PRD of the non-residential useable sales (excluding outliers) and time adjusted sales sorted by the
seven townships in the County. Note: Chapel Hill Township includes both Chapel Hill properties and Carrboro properties. A
map of the townships is available. There were no data points for Bingham Township.
PR❑ by Township - Actual vs TASP
+ PRID (Actual Sale Price)
PR❑ (TASP)
1.20
O
a
1.15
c
a�
L
pJ
�_ yy yy
1.1Q
M
N
aj 1.05 pprr AO L Boun 1.03)
----------- --- ---------------------- ------------------- ---------------
1.00
IAAO Lower Bound (0.98)
CPo a F cl\
,poi a�
Township
*There were no data points for Bingham
Parcel Count - Townships
1- Little River 2-Cedar Grove 4-Cheeks 4- Hillsborough 5- Eno 7- Chapel Hill Total
22 1 18 46 2 658 747
20
The graph below shows the PRD of the non-residential useable sales (excluding outliers) and time adjusted sales sorted by age
of the building.
1.40 -
PRD by Age of Building (AYB) - Actual vs TASP
t PRD{Actual Sale Price]
1.35 PRD(TASP)
1.3D
a
1.25
v
1.2D
0
v 1.15
v
1.10
u
L
d
1.05 IAAd ll er Boun
--- - PI'---- --_03]-------- ------------------------------------- -- -----------------------
1.DD IAA0 er Bound (0.98) y
O�x
ro
1�
Decade Built
Parcel Count -Age of Building
1939 or Older 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s+ All
9 8 12 101 121 193 80 178 41 4 747
21
Attachment 2
ORANGE COUNTY TAX OFFICE
228 S CHURTON ST,STE 200
HILLSBOROUGH,NORTH CAROLINA 27278
Phone 919-245-2100 tax@orangecountync.gov Fax 919-644-3091
Chad Phillips,Deputy Tax Assessor
On June 171",the Tax Office began a county-wide neighborhood level review on vertical equity based on
concerns brought forth by the Orange County Property Tax Justice Coalition.This review was completed
on July 301".The initial review was based on neighborhoods that had a statistically significant number of
sales available to calculate a Price Related Differential (PRD). Based on the recommendation from the
UNC School of Government, additional consideration was also given to conduct calculations of the Price
Related Bias (PRB).After this review, it was determined that 86 neighborhoods county-wide fell into the
category of being outside of IAAO standards for both PRD and PRB, as well as having a statistically
significant number of sales available. One of these neighborhoods (T706) has already been corrected
through Board action on July 23 d.This leaves 85 neighborhoods.
IAAO Standard for analysis states that a minimum of 5 sales should be used to calculate a PRD, however
at least 30 should be used in order to provide "reliable and stable measures."
IAAO Standard for PRD shows an acceptable range of.98 to 1.03 where> 1.03 indicates regressivity and
< .98 indicates progressivity.
IAAO Standard for PRB shows an acceptable range from -.05 to+.05, However, it states that the
"unacceptable range" is-.1 to+.1. IAAO guidance from the 2013 Standard on Ratio Studies clarifies this
as saying that the .05 standard implies that the results are questionable, and the .1 standard implies that
inequity is likely.
IAAO recommends using the PRB in addition to PRD for more comprehensive equity testing. It says that
while the PRD is easier to compute, the PRB is preferred.
There are multiple methods that can be used for vertical equity review in neighborhoods that have
under 5 sales. None of them alone should be considered significantly reliable, and IAAO suggest
performing more than one. Due to the lack of sales, no PRD or PRB could be calculated on these
neighborhoods, but based on review, in our opinion 76 neighborhoods warrant closer inspection.
The original challenge brought by the Coalition pointed to 19 specific neighborhoods that they were
reviewing. Of these 19, 8 have a statistically significant number of sales and are out of standard for both
PRD and PRB. 9 have a statistically significant number of sales, and are either in IAAO standard range, or
come into range if outliers are taken into consideration.The remaining 2 do not have enough sales to
calculate, but are recommended to be reviewed based on review.
The Tax Office also contracted with a third party vendor to run equity analysis countywide.The Tax Office
is currently reviewing this material and how it relates to our neighborhoods.
22
Lastly, we received information from the Vice President of Homeowner Services for Habitat for Humanity
of Orange County on July 281", with follow up additional context on July 301". Some, but not all Habitat
homes in Orange County have a "capped" sale price restriction written into their deed agreement based
on the Area Median Income. We do not know which properties currently have this restriction, but in the
opinion of the UNC School of Government; "deed restrictions impact highest and best use in the clearest
way possible,through restricting the legally permitted use,just like a statute or zoning regulations.The
appraiser would need to determine the impact of the specific deed restriction, which can vary...if you
can determine that the deed is restricting the legally permissible sales price, it seems to me that the
NCGS 105-283 true value as of the appraisal date has been restricted. We can't appraise the home above
its legally allowed sales price"
The Tax Office request that the Board instruct staff to review these 161 neighborhoods and make
corrections as necessary. It should be noted that this request does not imply all 161 neighborhoods will
be changed, nor does it imply that all properties within any single neighborhood will be changed. Any
changes that occur due to this directive would result in the property owner being sent a new notice that
would permit them to appeal that value to the Board of Equalization and Review within 15 days. As a
matter of thoroughness, the Tax Office would also request the Board to instruct staff to review the 9
additional neighborhoods brought forth by the Coalition for issues that may not have been evident in the
vertical equity analysis. Further, any additional neighborhood that is identified through the review of the
third party vendors analysis should be included in this review. Lastly, the Tax Office would request the
Board to instruct staff to review the Habitat homes in Orange County to review for the sale price
restrictions, and adjust values accordingly and if necessary.
Once all of the neighborhoods and properties have been reviewed,the Tax Office will bring back to the
Board of Equalization and Review an information item that will provide the results of the reviews. It will
include any properties that had value changes,the category of review,the neighborhoods the properties
were located in, and the old and new values.
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In total, we will review 171 neighborhoods, plus any that are identified through review of the third party
vendor study. We will also review Habitat Homes based on the additional information that was provided
to us on July 30th.The BOER has directed the tax office to review and make changes as necessary. For any
property that is changed, a value notice will be sent, and the property owner will have 15 days to appeal
back to the BOER.After this review is completed, an information item will be provided to the BOER of
the neighborhoods that experienced changes, as well as a map to visually show where in the county
these changes occurred.
Please note that this does not imply that all 171 neighborhoods, or even all properties within a
neighborhood will experience a change. PRD is an indicator that there may be an issue, it does not
identify that there is an issue or what that issue may be.
NBH Limited
These are neighborhoods that have less than 5 sales and are unable to have a PRD calculated at a
statically significant level, but through review, it is my opinion that they should have a second look by
staff.There are 76 total of these neighborhoods.
NBH Out of Standard
These are neighborhoods that have five sales or more, and a PRD and PRB were calculated, and the
neighborhood is outside of IAAO standards for each.There are 86 total of these neighborhoods, but 1
has already been addressed by the BOER, leaving 85 for review.
OCPTJC
These are the 19 neighborhoods that were highlighted in the slides by the Coalition.There is some
overlap as 10 of these neighborhoods are in the other list.The neighborhoods highlighted in grey are
outside of IAAO standards for both PRD and PRB. The ones in orange have less than 5 sales and a
significant PRD could not be calculated, but in my opinion,they should be reviewed. The green highlight
are neighborhoods that are within IAAO standard for PRD.The blue highlighted are the neighborhoods
that would be inside IAAO standard if outliers are taken into consideration.As a matter of thoroughness,
and to review for issues that may not have been evident in the equity review, all 19 neighborhoods will
be reviewed by staff.
Neighborhood Adjustment Example:T706-Southern Village Townhomes
This neighborhood consists of 70 properties.Through the appeal process, it was discovered that the
units on Highgrove Drive sold for about 15% less than the units in the rest of the neighborhood. It was
learned that this subset of units was constructed with a lower quality.After the individual appeal was
settled, staff went back to the BOER and asked that a similar adjustment be made to all properties that
fell into this category.This resulted in a change in grade and value for approximately 20 properties out of
the 70 in the neighborhood.This change resulted in the PRD going from outside of IAAO standard at
1.034 to being within standard at 1.022.
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NBH Limited NBH out of NBH
Standard OCPTJC
1601 7120 1002 7158 4005
1604 7305 1004 7162 4306
1606 7306 1006 7200 7042
1616 7307 1007 7203 7102
1622 7308 1009 7204 7104
1624 7311 2006 7301 7124
2005 7317 2008 7370 7162
2012 7319 2009 7420 7200
2014 7324 2011 7430 3302
2300 7325 2016 7435 4316
2301 7329 2023 7440 7032
2408 7330 2414 7445 7130
2418 7413 3002 7464 7505
2602 7428 3005 7470 4007
2606 7433 3008 7492 7134
2607 7439 3009 7498 7160
2624 7446 3010 7507 7170
2634 7447 3416 7525 2300
3403 7509 3612 7530 7120
3411 7510 4004 7552
3614 7809 4005 7568
4304 7812 4305 7758
4307 7905 4306 7766
4406 7907 4317 7790
4606 7912 4428 7915
4616 7936 4430 7922
5300 CO22 5004 C002
5400 T512 5310 C003
5407 T709 5402 C006
5411 T789 5410 C010
5608 7023 5620 C203
5614 7052 6007 C204
5625 7101 6009 C408
6403 6011 C511
6603 6012 C803
6605 7021 H002
6613 7025 K003
6622 7027 L001
6624 7042 T008
6627 7044 T706
6702 7048 7110
7009 7102 7124
7013 7104 7156