NEWS

Final reappraisal: Nashville property values soar by record 37 percent

Joey Garrison

USA Today Network - Tennessee

On average, property values have increased 37 percent across Nashville.
If you want to know whether you’ll be paying more or less taxes, 37 percent is the key.
Properties that experience appreciation higher than that figure will pay higher property taxes.
Those below that figure will pay less in property taxes.

Cleveland Park, McFerrin Park and East Hill used to be parts of East Nashville ignored by developers.

But now this area is a magnet for home makeovers, new restaurants and urban-inspired condos, setting the pace for the city’s massive increase in property values.

Reappraisal notices are in the mail, and the spike is even larger than expected.

Spurred by Nashville's breakneck growth, Davidson County's property values have soared by a record median 37 percent since 2013 under a reappraisal performed by the office of Davidson County Property Assessor Vivian Wilhoite. The reappraisal accounts for commercial and residential properties.

Wilhoite, in her first year in that role, informed Metro Council members of the final reappraisal figure in a letter Friday. She said property owners should begin receiving mailed notices of the changes in values as early as Friday.

In Nashville's most rapidly gentrifying neighborhoods — including large stretches of East Nashville, parts of North Nashville, The Nations in West Nashville, and Wedgewood-Houston near the city’s fairgrounds — values have skyrocketed the most.

It means these neighborhoods will be taking on a significantly larger tax burden than they’re accustomed.

“The growing demand for real estate in the Nashville market drives up values,” Wilhoite said.

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Leading the way, with a median increase in values of 93 percent over the past four years, is East Nashville's Metro Council District 5, which includes neighborhoods near Dickerson Pike, Gallatin Pike and East Trinity Lane.

This area was once considered poor, but it now attracts college graduates and young families moving into Nashville.

Eighty-four-year-old Vernon Winfrey, a former Metro councilman for the area and father of Oprah Winfrey, has seen a lot from the barbershop he’s operated in Cleveland Park since 1965. But he said he’s never seen anything like the growth happening right now.

“Since they’ve been giving homes a face-lift, I guess they need to go up in value, and taxes also," he said. “I hear a lot of folks complaining that, ‘We won’t be able to live over here and they’re moving us out,’ and I said no, we are selling out.”

State law requires the reappraisal of all taxable property every four years. Values vary by property. A property’s change in value could be much higher or much lower than its neighborhood’s average increase.

For the first time since 2000, commercial assessed values are greater than residential assessed values.

What neighborhoods are increasing the most?

In Metro Council District 21, which encompasses areas near Charlotte Avenue and Centennial Park, and North Nashville, including neighborhoods around Tennessee State University and the suddenly hot Buchanan Street district, property values have jumped by a median 77 percent.

Councilman Ed Kindall, the district’s representative, said he’s concerned about the assessment and is encouraging his residents, particularly the elderly, to appeal if they think it’s too high.

“My concern is we’re just one of the lowest-income districts in the city, or close to it,” he said. “And I’m just trying to figure out how we came in second highest in terms of valuation.

“It has its positive and negatives because actually it increases the value of people’s properties and some people will be very pleased about that.”

Other top appreciation neighborhoods by council district are:

District 7, Inglewood in East Nashville — 66 percent median increase since 2013.
District 19, downtown, Jefferson Street, Salemtown, Germantown, the Gulch, Music Row — 63 percent median increase.
District 20, West Nashville, The Nations — 61 percent median increase.
District 17, parts of 12South, Wedgewood-Houston — 55 percent median increase.
District 6, East Nashville’s Lockeland Springs, Edgefield, Cayce Place — 53 percent median increase.

Metro offers tax relief options for the elderly, disabled and poor, but the deadline to qualify was April 5.

Councilman Scott Davis, the District 5 representative, said he’s tried to prepare his constituents for this year’s reappraisal for more than a year and get as many enrolled in relief options as possible.

“I knew that we would be in the top two (of districts with the highest property value increase), but I didn’t think we would hit 93 percent," he said. “To neighbors it’s great news because their property values are going up, and to some of my older neighbors, it might be a little scary.”

Tax bills go out later this year

Tax bills go out in October. During a reappraisal, Metro must still collect the same amount in property tax revenue after the 2017 reappraisal. This is accomplished by an automatic readjustment of the property tax rate, which is currently $4.516 per $100 of assessed value.

Home values have soared so high over the past four years that the adjusted tax rate could drop below $3.25 after the reappraisal. That would be the lowest since 1984, when it was $3.17.

The Metro Council will vote on adopting the reappraisal and the adjusted rate in June.

The previous appreciation increase record for Nashville was a 33 percent median property value jump from 1993 to 1997.

Nashville’s property reappraisal projections in December had showed a 34.5 percent median increase, meaning the appreciation has ticked up a few points in just a couple of months.

All 35 Metro Council districts across Davidson County have seen property values jump by a minimum average of 25 percent. The smallest bounce is Goodlettsville and Forest Hills, the latter of which is one of Nashville’s wealthiest communities.

Properties are appraised by taking into account property sales on a neighborhood-to-neighborhood basis.

Home values are still highest in affluent neighborhoods such as Forest Hills, Belle Meade and Green Hills, but on average residents in these places will be paying less in property taxes than they're accustomed as others elsewhere pay more.

If you want to know whether you’ll be paying more or less taxes, the number to remember is 37 percent, the countywide median increase.

Properties that experience appreciation higher than that figure will pay higher property taxes. Those below that figure will pay less in property taxes.

Property owners who disagree with their assessments are allowed to request an informal review by May 19. To appeal, Nashvillians can complete an online review at www.padctb.org. Davidson County residents can review individual property assessments on the assessor's website.

Reporter Kirk Bado contributed to this report. Reach Joey Garrison at 615-259-8236 and on Twitter @joeygarrison.