Has new construction declined in Tarrant County? Elected officials question appraisal numbers (2024)

The taxable value of new construction in Tarrant County went down this year, according to the appraisal district. Elected officials aren’t convinced.

“Perhaps that’s not a real decrease,” County Commissioner Roy Brooks said at an Aug. 15 meeting. “I think it’s a function of what’s going on at TAD, and their inability to come up with precise numbers that we can work from.”

Precise numbers — or the lack thereof — have been the name of the game this budget cycle. Taxing entities across the county received unofficial tax rolls showing strong growth in estimated property values throughout the spring, only to be caught on their heels when the July certified tax roll reflected almost none of that anticipated growth.

Due to the unexpected gap in property tax revenue, Fort Worth is considering its first tax rate increase in 30 years, while Tarrant County is primed to cut its budget by $50 million.

The reported taxable value of new construction has drawn the most scrutiny. County commissioners received a briefing on this year’s values from County Administrator Chandler Merritt during an Aug. 15 budget meeting. Merritt said the certified values for new construction this year have dipped around 10% compared to last year — the first time since 2021 those values have decreased.

Commissioners found those numbers hard to square with the development they’re seeing around the county. Commissioner Manny Ramirez, who represents northwest Tarrant County, said he’s hopeful the appraisal district is correct, because every taxing entity relies on their accuracy, but said he’s concerned their conclusions are wrong.

“If we had a significant slowdown in construction or property values had gone down like they did in ’08, OK, but that doesn’t appear to be the case this year,” he said. “So it is a bit questionable.”

Arlington City Manager Trey Yelverton said his city has seen a lot of inconsistencies from the appraisal district over the years. He pointed to technology issues the district has faced, like the rollout of mass software appraisal system Aumentum in 2014, which resulted in millions of dollars being left off the tax rolls. The district is currently looking for a new appraisal system to replace Aumentum.

“That inconsistency leads to the kind of skepticism that you’re hearing about,” Yelverton said. “Are we sure that’s right? You know, are we sure they’ve got all the columns and rows the way they need to be? We just rely on them to do it.”

The district’s new construction values also contrast sharply with its neighbors to the east. The Dallas Appraisal District reported an increase in new construction value across the county this year, and Dallas specifically saw a $16.9 billion increase in total value, $5.1 billion of which are from new construction.

“I would argue Tarrant County is the hotter market, if you will,” Yelverton said. “There’s more growth and activity in Tarrant than Dallas at this point. It probably will be that way for the future.”

Residents have previously raised the possibility of missed commercial development in Tarrant County during appraisal district board meetings. When reached by email, Chief Appraiser Joe Don Bobbitt said he hadn’t seen the comments made by commissioners. However, he did know of one commercial property in Flower Mound that was omitted from the tax roll and brought to the district’s attention, and said the issue will be corrected.

Tax records reviewed by the Report show that when the certified tax rolls were approved, the property in question was designated as vacant residential property with a market value of $521,756. Now, the property is designated as commercial, with a market value of $5,439,822.

“I have not seen evidence of a systemic problem with the new value calculations or other missing properties,” Bobbitt said. “We would be more than happy to correct any additional missing properties if any are found in the future. We are looking at some solutions to help identify the possibility of new or missing structures, but cost will determine our potential timeline.”

Local tax consultant Chandler Crouch, a vocal presence at appraisal district board meetings, said there are two scenarios in which the appraisal district should be alerted to new construction: when a construction permit is filed, or when someone purchases new construction. Keeping track of all of those sales is a difficult proposition, he said, but overall the district does a decent job.

“The appraisal district owes it to everybody to make sure that their records are as accurate as possible,” Crouch said. “And so any error like (the Flower Mound property), you’ve got tons of people that are paying the price for that error, and it’s not fair, it’s not right, and it should be corrected. But the number of errors that I’ve seen that are that egregious are pretty small.”

Crouch was hesitant to label this year’s decrease in new construction values as inaccurate. He pointed to fluctuations in the real estate market over the past two years, including boomerang interest rates and increased inflation. When it became apparent that interest rates would remain higher in 2023, he said, builders ran into trouble.

“Builders were getting under contract, making commitments to buyers and then, during the six-month timeline that it takes to build a house, the price of lumber shot up, and they no longer had their profit margins, and so they would cancel the contracts and basically screw buyers,” he said.

The annual certified values don’t tell the complete story, he continued, because they don’t capture any of those ups and downs throughout the year. Higher interest rates and decreased demand in 2023 all add up to a new construction market that could be less appealing than in 2022.

For the taxing entities, whether or not the numbers are accurate eventually becomes a moot point. Individuals get to protest their valuations, Yelverton said, not taxing entities like the city of Arlington. Helen Giese, director of budget and risk management for Tarrant County, echoed those sentiments.

“The (county) commissioners have that ability to doubt the information,” Giese said. “I work with the tax roll that I receive from Tarrant Appraisal District, as did every other entity in Tarrant County. And we just have to work with the numbers we have.”