Bernalillo County assessor outlines new property tax evaluation methods for multifamily housing

In a recent budget hearing held by the Bernalillo County Commission, discussions centered on the pressing need to address property tax evaluations, particularly for multifamily housing. As the county grapples with an aging population and a growing demand for affordable housing, officials are keen to implement strategies that mitigate the financial burden on property owners while ensuring the availability of rental units.

Commissioner Benson raised concerns about the potential for "tax sliding," a phenomenon where property taxes increase sharply, particularly affecting newly constructed multifamily properties. In response, the county assessor outlined a multifaceted approach to property valuation that aims to soften the impact of these tax assessments.

The assessor explained that state statute allows for three primary methods of evaluation: the cost approach, the market income approach, and the sales comparison approach. The cost approach, which estimates the cost to replace a building minus depreciation, is often the most utilized. However, for new constructions, the assessor proposed a shift towards using a modified income approach. This would consider the expected rental income rather than the construction costs, particularly in the initial years when properties may not yet be fully rented.

This strategy aims to prevent new property owners from facing steep tax bills during their first year of operation, a time when many units may still be vacant. By stabilizing income assessments over a longer period, the county hopes to alleviate the financial strain on landlords, which could, in turn, support the availability of affordable housing options for residents.

Additionally, the assessor emphasized the importance of collaboration with the multifamily housing industry. By working together, they can ensure accurate sales data is used for property evaluations and consider factors like property upgrades that could affect valuations. This cooperative approach is designed to encourage investment in housing while maintaining affordability for tenants.

As Bernalillo County continues to navigate the complexities of housing and taxation, these discussions highlight a proactive effort to balance the needs of property owners with the critical demand for affordable rental units. The outcomes of these initiatives could significantly shape the housing landscape in the county, fostering a more sustainable and accessible environment for all residents.