Lucas County auditor Anita Lopez disagrees with any proposal to re-evaluate real estate property on an annual basis.
“If we get into the habit of trying to adjust the values every year, during the tough times, and then during the good times do we want the values to go up every year as the market improves? So, do you really want to identify trends in the market?” Lopez said.
“Citizens aren’t going to like that either, say, when unemployment decreases, income starts to solidify again, people start buying homes, add more wealth, the country starts doing better again, do you want to increase the values every year which generates an increase in inside millage, for sure, in taxes? That will be an increase in taxes if we do that every year.”
Lopez, a Democrat, is being challenged in the November 2 election by Republican Gina-Marie Kaczala. Lopez spoke to the East Toledo Club during its monthly luncheon at the Weber Block. Kaczala was invited to appear in a debate-format, but could not attend.
Kaczala has over 21 years experience at the Lucas County Auditor's Office, and says she “will represent all taxpayers and not a chosen few” on her Facebook page. She is supported by Ohio Veterans United.
Lopez, who took office in 2007, said she was criticized by Kaczala during a debate for not readjusting property values on an annual basis. She says the auditor’s office is required by state law to evaluate properties every three years.
“It won’t work in the good times. People will be very angry, and during the tough times if you jump off too early we would have missed exactly what would have happened in ’08,” Lopez said.
Instead, she recommends property owners challenge the values if they believe it needs to be adjusted. She said her office gets about 4,000 citizens in a two-week period challenging values, and many get adjustments,
Lopez said in 2009, property values in Lucas County had fallen 13 percent, which caused a 13 percent reduction in revenue for the county from inside millage. In one year, from 2008 to 2009, when the latest evaluations were done, values fell 10 percent, and the county lost $1 million in revenue, or about five percent of its budget. Property values will be re-evaluated again in 2012.
The Wall Street effect
Lopez blames the downfall of Lucas County’s real estate market on Wall Street. She says it’s nationwide.
“We’d have had a small decrease in ’07, but then in ’08 everything crashed. The entire deck of cards crashed. Wall Street crashes. We find out all the irregularities and the lack of regulation in the lending industry — all the pensions, all the investments — all that starts falling down.
“Why? All these loans are going bad and all these investments were based upon what was happening on Wall Street, what was happening with the banks. When they start losing their shirts and their investments, guess what? We were putting in individuals who were being very generous with our loan-to-value. We’re loaning more than what the value was really happening.
“It’s a national trend. People challenging their values — it’s a national issue. We were lucky. I mean, we had maybe 30,000 people come in over the last three years. I mean, Florida, Michigan, Vegas, out in Nevada — I mean everywhere people were challenging their values. It’s not just an Ohio issue.
“So as people are losing their homes, and then all of us start to lose our equity because the banks are looking at the value decreasing because they know they are losing their shirts on the loans that they made. So they start locking up their lending.
“The irony of it, with all due respect to the President, I said the yahoos who got us into this problem with issuing bad loans in the first place ended up getting our federal stimulus dollars. I’m like, ‘Unbelievable.’ Had there been tighter regulations, had there been more scrutiny, we wouldn’t have it.
“Anyone in the real estate industry in the ‘90s and around 2000, they were having a hay-day. They were making money hand over fist. But yet, who ended up paying for it? Our investments, our pensions, and who is still paying for it? It was our taxpayer dollars that ended up going to the banks. Give me the dollars, by all means. I mean, you are going to give it to the same people that ended up creating the problem in the first place.”
Lopez does not see things getting any better.
“What we’re seeing is the unemployment spike and the number of foreclosures is on the rise,” Lopez said. “They steadied in ’10 slightly, but now you are starting to see the spike again because unemployment has not been controlled. So, what you are going to see now with all these foreclosures, and these foreclosures then are hitting the market.
“The State of Ohio does not allow us to use foreclosures when we are trying to determine the true value of most steady homes in Lucas County — stable homes that are not being forced into a sale. If it’s a forced sale, like a short sale or a foreclosure, the State of Ohio does not allow us to use that when we generate the value of properties.”
Lopez says those forced sale prices do affect the value in the long run.
“But, the post foreclosure sale, once that foreclosure occurs and that home that sold for $8-16,000 which was actually $60,000 three years ago. When it goes back onto the market again and it’s listed and it’s advertised, it sits on the market for about 90 days, and it’s between a brand-new buyer and a brand-new seller, that second sale is now legally permitted into the evaluation.”
She says to keep an eye on the real estate market do not pay attention to unemployment numbers.
“People fall in love with, ‘Oh, unemployment is down, unemployment is up.’ But really there are only two other places that people can go after unemployment — one, they go to Jobs and Family Services, which is welfare, so their income drops further. Or two, they go back to the market and get a job, and right now, what’s happening is individuals are not getting wages of what they were earning prior to ’06. So do not fall in love with the media or any elected officials saying, ‘Oh, unemployment is up’ or ‘Unemployment is down.’ Ask the next question.
“If people can’t afford their homes they are going to get abandoned. They are going to get vandalized; they are going to get stripped. They become blight. They are thankful for just getting rid of them. They are not cutting the grass because there are so many foreclosures on the market that it is too costly to try to maintain them. They are getting them off their books as fast as possible. They are selling them for pennies, and the post-foreclosure sale is really what’s crushing the entire equity of everyone’s property. So, it is a very uncertain time.”