The average housing tax increases by 14.8%
By JANE McCLURE
Homeowners in the area may want to open their mailboxes carefully in November. Statements of truth about taxation will likely result in a sticker clash with rising home values and property taxes.
Public school officials in St. Paul, Ramsey County and St. Paul have released information on 2022 property values and estimated 2023 taxes for median market value homes in the 17 planning districts and suburban communities of St. Paul, at a meeting of the Joint Property Tax Advisory Committee on Sept. 28.
A caveat is that taxes can vary widely from property to property and can be affected by comparable sales in an area and by physical improvements or property damage. But the look at a neighborhood’s median home value is an indicator of what may be to come.
County-wide, overall estimated market values are at an all-time high, which has continued strong growth due to strong demand and low supply of homes. But it raises red flags about a growing accessibility gap.
The trends are worrying for elected officials. County Commissioner Victoria Reinhardt noted that the median cost of living in Ramsey County exceeds the median income. The county commissioners are calling for the joint committee to do more to examine how to reduce the costs of government, in particular the costs of maintaining debt.
TRANSFER OF THE TAX BURDEN ON HOUSES
Of all property types in St. Paul and Ramsey County, home values have increased the most, said Corey Erickson, the county’s acting assistant assessor. But it means more of a shift in the property tax burden for landlords and apartment building owners, and less pain for commercial and industrial property owners. For example, the average building owner will see a 6.5% increase in property tax. Commercial property taxes would only increase by an average of 1.3%.
The median home market value in all of St. Paul is $266,300 for taxes owing in 2023. That’s up from last year’s value of $228,700. The increases due to tax transfers are $235, with further potential increases of up to $271 with the various maximum levies. This represents an increase of $506 or 14.8% from $3,418 to $3,924.
Local authorities are promoting property tax rebate and homestead credit programs in several neighborhoods, including homeowners in Frogtown and Hamline-Midway. St. Paul City Council members are already looking for ways to reduce the 15.34% tax increase proposed by Mayor Melvin Carter. (See related story.)
Of the neighborhoods in the area, Frogtown saw the largest increase in median market value in 2022 and property taxes payable in 2023. Median home value rose from $170,300 to $200,100, an increase of 17.5%. Property taxes would go from $2,412 this year to $2,821 next year, an increase of 17%.
The median value home in Hamline-Midway follows closely, with a 17% increase from $210,000 to $254,600. Property taxes on this median-value home would increase by 15.6%, from $3,097 to $3,579.
Como’s median home value rose from $258,200 to $294,700, an increase of 14.1%. Property taxes would increase from $3,927 to $4,397, an increase of 12%.
Median home values in St. Anthony Park increased 12.7% from $328,500 to $370,200. Property taxes would increase by 10.1%, from $5,139 to $5,656.
The Union Park neighborhoods of Merriam Park, Lexington-Hamline and Snelling-Hamline are seeing a median value increase of 12%, from $342,300 to $383,500. Property taxes would increase from $5,377 to $5,878 or 9.3%.
The highest median market value increase for taxes payable in 2023 is Payne-Phalen at 20.8%, from $194,500 to $234,900. Property taxes would increase by 20.2%, from $2,859 to $3,104.
The only neighborhood with a decline in market value was Downtown, when median home values fell 1.2% from $188,700 to $186,400.
A look at the value trends of 2018 and 2022 is striking. The area of the city with the biggest change is Dayton’s Bluff, where the median value increased from $130,500 in 2018 to $214,700 in 2022, an increase of 64.5%.
Neighborhoods in the surveillance area experienced varying impacts over this period, with Frogtown recording the largest increase in median value at 57.1%. The median home value was $129,200 in 2018 and $203,000 in 2022.
Hamline-Midway median values increased from $177,900 in 2018 to $242,100 in 2022, a 36.1% increase. Close behind are the median Como values, rising from $219,900 in 2018 to $296,850 in 2022, a 35% increase.
The median home value in St. Anthony Park has increased 30% over this period, from $348,800 in 2018 to $453,500. Merriam Park-Lexington-Hamline-Snelling-Hamline neighborhoods saw a median value increase of 26.8%, from $300,900 in 2018 to $381,400 in 2022.
Looking at the city as a whole, the smallest increase in median value was seen in Highland Park. From 2018 to 2022, the median home value increased by 21.6%, from $327,250 to $398,050. Values in Highland and other neighborhoods held up during the recession more than a decade ago, and this is reflected in recent trends.