Worksession re 2026 Valuation Report

All right, everybody, good afternoon. Today is Friday, January 9th. We are gathered to discuss the annual property evaluations with the assessor, Mr. Jeff Davis. Start with introductions. Erin Baldwin Day, in room.

Christopher Constant on the phone. Mr. Johnson? I'm here. Thanks. Mr. Myers?

Yes, thank you. Anyone else?

All right, that's everybody. Slow start to the year. Mr. Davis, you have the floor. Welcome. Yeah, thank you.

So again, my name is Jackie Davis. I'm the municipal assessor, and typically every year I do the evaluation. So thank you for your attention to this, and if you have any questions throughout this, by all means please just ask them and I will try to answer the best I can. I often like to start off the presentation with just really, at the end of the day, what we do. At the bottom you can see we administer exemptions and we value property.

That's basically our two jobs that we do. We administer exemptions on a year-round basis. You look— we also value personal property. So, you know, the first two-thirds of the year we're valuing current returns and then we're— our goal is to inspect property every 6 years. For that, you can see we do that year-round.

Then we have January 1st. That is the big statutory lead date. That's the value of the product. That's what the value is as of January 1st is what we're trying to get to. That does kick off a series of dates.

The first one is the appeal period, and then late in the year we get into evaluation for the following year. Just quick question, quick question for Ms. Ryan. Yeah, thanks. Um, uh, just I'm curious, with your inspection, you say you do them every 6 years, are those, um, desk inspections or is that physically going to a property? Yeah, through the chair, T. Brawley, it's a combination.

We have been very— this last year we had 2024 aerial imagery, so that's certainly one of of the, uh, ways that we've been expecting to try to find efficiency, but we also physically inspect property as well.

For this 2026 tax year, I have two pie charts here. On the left side, you can see the total value. This is basically the total value of Anchorage right here, so $59.8 billion comprised of primarily the bulk of it residential, yet commercial about just under 19, they have personal property about 6, and then you have the 2 yellow pie slices. Those are generally your fully exempt properties. When you look at the right-hand side of that, we have the taxable value, or basically the tax base.

This is what the mill rates are based off of. It's, it's taking out all exemptions. So your partial exemptions, think residential, and think your fully exempt property as well. Net pie changes were about 68% for residential, about 25% for commercial, and about 8% for personal property.

Looking at that tax base from a historical perspective, this is spanning about 41 years, putting into real dollars You can see that we are this year at close to the all-time high, uh, with everything. What's interesting is I think if you look at— well, tax year 2023, we saw a little dip. There's two reasons for that. One, there's a high inflationary period during that period. The other one is we also have the residential exemption increase from $50,000 to $75,000, which took out about 3% of Private taxes.

You go back one side real quick. You betcha. So this is the total taxable value, and it's somewhere between 20 and 25% is the commercial, depending on whether you're in property type total or the with exemptions taken out. And then 62 or 68. Now go to the next Why is— oh, it's personal property.

I'm sorry. Yes, not commercial. The colors threw me off. Okay. Yeah, my— yeah, I— yeah, thank you for that.

We unfortunately, for this spanning 41 years, we— I don't have the detail of the split out residential, commercial for the total value. Yeah, thanks. Personal property. Now, is there any change anticipated with that personal property for this year, or is that next year relative to the shift that we made? You're, you're going way ahead of me there.

No, so we do anticipate— I can, I can do a spoiler alert here, okay? We anticipate probably about a less than a half of a reduction to the total tax base. When you look just at personal property, it'll be probably like a 4% drop because of the personal property exemption. So for those folks The personal property exemption starting this year is going to be $100,000 for the exemption, whereas prior it was $20,000. Thank you.

My question is—. User error. Same pie chart, so this is the last one I'll talk about with the tax base from a broader perspective. So that same pie chart we talked about on the right-hand side with residential about 68%, commercial 25, and personal property. I think there's kind of two stories here.

The first one is that single family is a predominant bulk of the value, or really a single family home municipality for everything. When you look at the commercial, we have industrial is the highest, but we just have a lot of industrial. We just have a lot more number of properties for industrial. Um, About a quarter of our total value is exempt. So if you did the math between the total value and taxable value, it's about $15 billion is what we have exempt.

I have it here broken down by two main buckets. The first one, mandatory. So this is either going to be state or federal requirements that we have to exempt this property. The biggest one, the senior disabled vet, is about $3.2 billion, and we have over 20,000 exemptions for that bucket. When you look at the next several, we have municipality, education, federal, state.

Those are all generally going to be government property. And then some of the remaining charitable, religious nonprofits. I'll talk briefly about that in a couple slides as well.

Anna? Yes, I have a question, and if you cover it later, let me know. I am curious, and this could be offline as well, what the trend line is on the senior disabled vet exemption. So I mentioned it's more common for folks to become a senior than to become a disabled vet, but, but I'm curious if that's been increasing, like the number of properties. And so if you don't have it here, that's fine, but I'm interested in that.

And then other question is under Native, is that Native corporations or Native allotments, or what is the required native exemption there? Yeah, thank you for the question. So the first one, with respect to the senior disabled vet, overwhelming majority of that 21,853 are seniors. I forget what the exact number is, but we're talking 70, 80, 90%, something like that. I have been watching that.

So the senior exemption's capped at $150,000 for that. And for several years I've been— I was seeing that increasing 3-4% on average every year for that. And I think the biggest reason is because we're just having that number increasing for that. The last— this year what we are seeing is that number is staying relatively the same for that. I think one reason may be that we are just doing a better job with reviewing exemptions and staying on top of it, and I think that is one reason for that.

But March 15th is the deadline for that, so we really won't have the full picture of what will be at landing for this coming 2026 tax year. And then for the follow-up question for the Native, yeah, it's going to be largely your Native corporations, so think like the Klut Naik. Can we go back one slide since we stopped? So your tiniest number on the bottom there, 0.2 billion, so $200 million, oil and gas. There's a bill moving, are you tracking that, that the governor is proposing to change the way we calculate oil and gas taxes at the local level to support the gas line development?

I have not yet. Through the chair to council, I am not tracking that one. That has not been on my radar. I know there's a couple other property tax-related ones I have. I don't— I'm not aware if that is a property tax-related or if that's more of a— yeah, it's—.

So it's a local government property taxes for oil and gas. The governor is looking at reducing by some 80% for the purpose of making his proposal for a gas line more economic for the, the company that he's contracting.

With. And so it certainly is something to be tracking internally as the legislative session moves forward. I, I don't think it has a high likelihood of passage, but you just never know. So yeah, well, through the chair, thank you so much for bringing that to my attention. I might talk to you offline a little bit about what the exact bill is going to do.

And the answer is no, I'm not aware of that right now.

Mr. Ganes, would you go back one slide? Yeah, this is great. You guys have great questions.

So we assess— so we think of taxable value of anything over 5 units as a commercial property.

Yeah, through the chair to Walden Day for that. So one of the things that we have been trying to do, so this last year I historically had fourplexes in the commercial bin. Fourplexes— and so one of the requests last year with the someone that they brought to our attention is, let's be consistent with planning and zoning and fourplexes being in residential for that.

We— the fourplexes are kind of that gray line where, you know, they can get— they can get funding through a residential loan for that, so they often can behave like a a private small investor from that. So, you know, as you can see, we did put it in the residential market. It doesn't change the value at all for us. It's more in some ways almost semantics, but it certainly has a meaning. Yeah, that just— that caught my— that caught my attention because I, um, yeah, yeah, I understand it doesn't change the value at all, but it it does paint a slightly different picture in terms of sort of like our overall real property.

Is it—. I think some— is it a place where someone is living or not living? Um, so yeah, that's just— I'm just curious. Thank you. So yeah, through the chair to Baldwin, you're very, very astute with that.

Um, what— when we change it this year, so back to that pie chart, right, this combination of the commercial went down by, I think it was like 7.5% because of moving it over for that. So, you know, something else to consider, you know, when you're looking at the bigger picture about how that pie is divided. Thank you. Jamie, did you know the stream might have gone down? Uh, it's telling me that the connection is unstable and it's trying to reconnect, but you know I figured as much.

I saw you react when I got the number that said it was not working right. So, okay, okay, moving on. So we talked about the exemptions. The last thing I'm going to talk about in this slide is the bottom, so the optional. That's what we as municipality have chosen to do.

Obviously the residential is the biggest one of not just optional but of all buckets there, $3.6 billion. Over 48,000 residential exemptions we have. So it becomes, from an administrative perspective, relatively simple for each one to evaluate, but when it's a number game, it can be complex and, um, complicated. The economic development, we have $65 million exempt for that, but that doesn't show the picture of what happened this last year. There was a lot of activity that is basically provisionally approved or, um, contingently approved that is not reporting that 65 million.

The first one is last year under the economic development property, a deteriorated property, 1235. We had 2 that were approved by assembly. The other thing I wanted to highlight here is the tax incentives for housing. If you recall, we did a big overhaul of the tax incentives 1260. Since then, we've had 5 applications that are provisionally approved.

And provisionally approved, they basically means that if you build this, we will exempt you. If they build everything according to plan, there'll be 157 new residential units. So not only do we have 5 applications, we've also had lots of questions from various developers with Yes, so this has been popular. The other one—. Is that in a year?

This is all within calendar year 2025, yes. And, um, just from your memory, under that first one, the economic development one, the Grateful Bread, that was about $2 million?

And then what was the Northlink one? It was like a huge amount, right? Northlink was significant. Yeah, we're talking single digits for Grateful Bread. Northlink, I think there is about $200 million of investment they were looking to do.

Right, just so the— if anyone is seeing this table coming up, they're on the same line, but they are of an extraordinarily different scale. And when you look at the sum of the 65, the vast amount of that is going to be not the one tiny little one at the top that stands out because it's first. So just for the record, the, the other one that we have is 1280. So that's also a new section of code similar to 1260. We've received lots of interest from this.

Um, we have 3 applications that were provisionally approved in 2025. I can report that we also just received another application for this, um, on— so that'll be in 2026, but nonetheless similar with it being very popular. It was so popular that we, we also did create a little flyer. We also had an FAQ for property owners. This typically is like your, you know, do-it-yourself investor.

Here's the last slide for exemptions, then we'll move on. Okay, I wanted to just bring this to your attention that we have been doing a review exemption of the charitable, religious, and nonprofit. So our goal this last year was to do a better job reviewing these particular exception. And for 2025, that's just what we did. I brought it into a 4-simple process here, as you can see.

And in step 1, I put a little picture of a filing cabinet because that's effectively what we were doing. We were pulling out some of these applications that were very old, physical papers, evaluating those exemptions.

If we did— we review it, we look for it. If there's any indication of a change of ownership or if we had— we didn't have all the information on that, we would flag that, try to contact the property owner, and require them to do an annual certification for that. And at the end of the day, you know, we do have to make a determination. So the annual certification, they have until March 15th to file that with us. Right now we have about 42 charitable religious nonprofit properties that we have reached out to.

We've asked them to submit that annual certification, have not received that yet. So, wanted to bring that to your attention. We are working, we're finding various ways to contact them, whether it's phone, email, looking at their Alaska Business Search. We also, if we don't hear from them shortly, will be physically visiting that property and so forth. So, we're trying our best to make contact with these property owners.

But at the end of the day, they do have to file the OMNIS on that.

Looking at new construction values, here's the taxable new construction. We're putting it into today's dollars. Often people like to look at the taxable new construction because it is one of the things that's excluded from the tax cap. This year overall, we're up 22%. You look at the blue there, the blue is the commercial bar.

And commercial is up significantly this year. There's really 4 big projects that came online last year. We've got the FedEx warehouse that was at the airport, we have the Marriott Hotel that's C Street, there's the big Kendall Auto Dealership down by Target, and a little bit of construction from the KeyBank— the old Page Holdings property— they did some final investment on.

For 2026. Yes, yes, I have a couple questions on new construction. So because I know that also of course relates to our tax cap, so, um, one, just to confirm, commercial here could and would include multi-family fiber morning, correct? Okay. And was there a lot of that, like, is, is that because you mentioned these 4 projects, how much of that number is also these multi-family projects we've seen?

Yeah, through the chair too, probably. When I looked at the commercial list, I was looking for the ones that was like $4 or $5 million or more. I didn't see any that were multifamily. So the ones that were provisionally approved under 1260, those were recently provisionally approved. They haven't come online yet.

I would expect— I hope that they'll be online in this year, 2026. For the 2027 tax year. Okay, thanks. And I know the timing is that factor. Then other question is, um, in new construction, so for example, we've seen buildings where, you know, they get taken down, uh, I think the old Key Bank building, you mentioned that one.

So if it's not something where you're necessarily building completely from scratch, is that— but you're increasing the value, obviously you're significantly renovating it.

Is that considered new construction for this purpose? Yeah, through the chair to Riley, yes. So if there is a renovation of some sort, we consider that new construction. Okay, thanks. Aaron?

Yeah, so I want to be sure I'm understanding correctly. So on this, on this graph, um, anything larger than a 5-plex is included in commercial construction and not residential? Yeah, through the chair, correct. Anything that's 5-plex or About that. Wait, I have to ask a clarifying question.

No. Are you certain? Because we just changed that. And so have you gone backwards and shifted somehow the numbers that were considered commercial when they were 3 units or 4 units? Yeah, through the chair, through council.

I can't verify that now. It's a good question. I can certainly look at that. Because we only recently changed where the 5 and above, it was lower. Right.

It was anything above 3, I think, right? Above a tri-class. And so, but that was only in the last 14 months. And so we don't— I don't know, that would be my question. Have we corrected this table to address that shift?

Yeah, I can look at that and try to get the report back to see what that is. I'm going to break down, and historically Yeah, so to clarify, um, you know, for property appraisal, what we have historically done is categorize, um, 4-plexes as commercial, and then 5-plexes and above, we've always done commercial. So this year, when we're looking at it, we're doing 4-plexes we're counting those as residential, and then the 5-plexes and above as commercial. But there is a shift, you know, similar to the zoning. We're also trying to mirror them, and we could certainly love to see—.

Yeah, it might be a huge difference, but there's some difference there because a certain portion of the properties that are historically considered commercial would now be considered residential, but only in this last year, but it's a small percentage. I would, I would presume so. And again, when I was looking at this from the, uh, you know, the list of everything we could look through, so if that's something that you want, I'm happy to evaluate that a little bit more. I, I think, I, I think that I'm just, I'm, I'm trying to sort out like how we actually— I mean, if you're looking at this from sort of like the macro uni level, it doesn't matter so much how we categorize commercial and residential, but if you are looking at this with an eye towards really being able to measure places where people live versus places where people don't live and how the new construction sort of balances out. I think that's sort of the question I'm kicking around.

It's like, how do we get an accurate reflection of what is actually space for people to live in versus space for people to not live in? So—. [SPEAKING CHINESE] And maybe that's not germane, but it feels that way given Well, particularly even the confirmation hearing we just had. So what I think— you're on to something there. That's like the nexus between the property appraisal system and the land use system, right?

And so in some ways, this is a conversation for our friends over at the Permitting Center to look at the properties and do that conversion, if you will. This is the conversation about taxes and how we levy et cetera. So it is germane, but I think it's germane to the other side of the house. And it's an important question, like, how do we see this through the lens of where people live versus where they work and store things? And so, yeah.

You have another question? No, good, thank you. So I just want to have a couple of thoughts on this graphic. It's always so interesting to see it. When you see that huge drop there in construction.

It really centers around 2008 and the global housing crisis and the meltdown that happened, and kind of a status quo of staying in that doldrum for now going on 20 years. And, uh, then you can see the drop in commercial construction that happened around the pandemic, 2020, '21, '22, and seeing a little bit of restore, restoration, or kind of activity. The housing piece is a little bit confounding, why it would be dropping in the last 5 years like that. But, um, it's just this slide provides an interesting kind of perspective to search scenarios of how we are, where we are, and why that is pretty important for us as policymakers. Not so much for the tax question.

Thanks, sir. Thank you.

Looking at— moving away from the new construction and looking at just the property summary of 2026. Residential, the total change this year is about 4%. We have about 90,000 properties for that. Commercial, we're at about a little under 8% change for commercial. We'll talk more about that.

Personal property, I have a little asterisk. We don't get the 2026 data yet, but I am expecting about a drop for personal property. Slight drop with a, like I mentioned before, about a 4-ish percent drop when you include those exemptions. So I wanted to start off with the residential—. I'm really sorry, Mr. Kadamis, would you go— would you track back 2 slides?

This one? Yes. Okay.

I'm comparing the timeline, that second residential drop after sort of the recovery, um, you know, post-2018 or 20— uh, 2008, housing in Boston, you know, start to recover, and then there's that like next sort of significant drop that begins the rest of the decline. And I'm not mistaken, that's when the new Title 21 went into effect.

Yeah, that was certainly a factor. Thanks. Yeah, yeah, I think the other speculation I would make is we're looking at number of dollars, and so one office building is, is always going to be much more— it's going to be valued much higher than a whole bunch of single-family homes, even though you could, you know, it's looking at, I guess, number of units versus the, the monetary value of the property. Um, and so that might be why it's harder to parse this out because we don't have any sense of volume, what's been built. Again, It could be a whole bunch of single-family homes, right, that are— can be valuable individually but not add up to, you know, a $15 million office building, something like that.

And so I wonder, it'd be interesting to look at this outside of this meeting with the money value and the number of parcels or the number of units. I think that would actually be a way to kind of sort through this a little better. Okay, the nerds will stop now. Yeah. I'm not a speaker, so I'm a nerd.

I also, on the context of what we previously talked about, sussing out why it's important for this conversation, the difference of, you know, heads in beds versus, you know, restaurants and other commercial properties. It would be interesting to see in the 2026 numbers in particular if there is a substantial number of commercial residential units that are in that category, right? So the understanding if that is in fact new commercial, you know, business buildings being built, or if that is a stack of, you know, Debenham, you know, units that are going to come in and be put online, or where they're at in the context of the housing conversation. And so it might be helpful for us to see that number in 2026, the blue column, broken down a little bit into kind of what's the gist. Yeah, so through the chair, we could— I could take a look at that, could look at it by the land use of what that property is.

Yeah, I'm not getting to be, you know, property appraisals, land use of what the predominant use is regardless of the zone. Yeah, and when we see that it's 15 or 25 projects, then we could probably just kind of take a sense of the project and see what it is. But yeah, thank you. Fun with camera. Yeah, fun with camera.

Maybe take a drive Yeah, very, very good question. So thank you for that. That's what happened. I wasn't able to answer. My apologies.

Nerds rule. Okay, so I talked about the property summary a little bit. I'm going to get into the residential value change for this year. So for this year, we have condos that they're up just under 6%. I would say majority of that is just the activity from 2025.

I would say that it probably is maybe like a percent of playing catch-up. If you recall, last year we had a big.

The next slide, right? Uh, duplex, triplex, about 5%. The big change here, double digits, almost 12%, is fourplexes. I would say for this one is majority of this is looking at some of the data that we have that come to us recently that we need to do a correction. In other words, we're playing catch-up for that.

We're a non-disclosure state. Um, the last— and there's kind of a little bit of a saying where We often in non-disclosure state, we chase an upward market and follow a downward market. We try not to chase that market, we try to be right there with that. I think this is one of the— within the residential that we are increasing. You'll see in the commercial there's also some adjustments as well.

The bottom table is the average change of the single family. With or without an ADU. North Anchorage/Eagle River is up the most this year. East Anchorage is up about 2.3%, so that's the lowest from that. There is some variance within this, or variation within that percent change, and as I just mentioned before, I want to talk about some of the modeling changes we've done.

So one of our goals this last year was to was to do some modeling improvements from that. And so we did, we did just that. We hired a consultant from the War 48 to help us with that. The first thing we did is we refined the cost tables with a focus on size adjustments. Additionally, we also simplified how the quality of construction is handled.

The example here of the quality of construction I have is we historically had some type of base, whether it's an average, good, or excellent, and then we have like a minus and plus on that base. And at the end of the day, we just don't have enough data to really warrant us to have that kind of accuracy for that. And on top of that, we just want to simplify for the taxpayer. And so we're going away with that, with the minus and plus, and we're just doing the base. That does create a little bit of movement between the properties because of that.

The other thing we're doing— we did this year— is we did a consolidation and unification of geographic market areas. So that's a mouthful, but really at the end of the day what it is— I have a little exaggerated for illustration here— we had a lot of market areas, and similar to like the quality of construction, we just don't have enough data to be that accurate for that. And on top of that, when we were working with the consultant this year, we didn't— we did believe that we were over-stratifying that. And so to better align with the assessment practices, we consolidated those. And you can see where we're moving towards now is just a consolidated of just having a few.

So now this year we have about— we went from about hundreds of market areas down to about 17 or or 18 market areas on that. And on top of that, one of the benefits will be to the property owner is it'll be a little bit more intuitive for them. So historically we had something like a 06-I00 market area neighborhood. We're just calling it Spinnard now.

So again, one of our goals is just to try to simplify things for, for us and also for property owners.

Thank you. So when— so does— are you, are you going to— actually, I think I'm curious whether you are actually doing appraisals by geography. I mean, are you— when you're doing this modeling, are you appraising all of the properties in a geographic area simultaneously, or is it sort of just scattershot? I mean, you said it happens every 6 years, but is that like every 6 years you look at like this part of town, and then like, and then the next year you look at this part of town? I mean, how does that, how does that actually work in practice?

Yeah, through the chair, good question. So we have 2 things going on. We're trying to inspect property every 6 years. The goal for that, and the reason for that, is just to verify the accuracy of the whole value of the property. Regardless of whether we go and visit the property every year, we're putting out a— we're assessing the property with our appraisal software system.

So basically, you know, the models that we use and so forth. So every year that property is going to have a valuation on that property regardless of who is in or not. So hopefully that answers your question. So then when we look at the geographic areas, that's more about trying to get to a value based on that. You know, the old age saying, location, location, location type of thing.

You know, that's what we're trying to do is account for location. So every property done as an individual property, right? Every 6 years it gets reviewed based on the CAMA settings for this year, every year. And then there's this other layer, which is the area, and that factors in how? The area factors in on the value portion.

Just like square footage, quality construction, age of the property, it's another attribute that we're looking at to get an assessment. So you're essentially modeling this every year, but you're verifying in— you're verifying the accuracy of an individual home's profile or to build structure, I guess, in this case residential, every 6 years. Is that what I'm hearing? That I would say that's a reasonable characterization. Yes.

Okay, I'm close. Yeah, you're— okay. Um, so when you do the verification piece, do you do that by geographic area, or is it just sort of scattershot? I mean, there's— you're sort of all over the place. Yeah, so historically it just looked like a scattergram where it's like, oh, this property we have to go inspect, and then this one two blocks down we do, and then the one a mile down the road we have to And that is really inefficient.

And so what we've been doing as a result of that is actually— so this year, this past year, 2025, we actually hit all of Durham. And so we're now starting to be more strategic, trying to be more efficient with government resources to be able to, um, just hit the whole area, um, for this. So we're moving that direction for that. But again, that's, that's more for that um, this spreadsheet. Okay, thank you for— thank you for indulging me the rabbit trail.

Sorry, this is looking at our sale ratios. So the sale ratios, the top here, this is bolded. Our goal is a 96% ratio. In other words, what that means is that for every, for every dollar that we, um, you know, that the property sells for, our goal is to assess it for about 96%. You can see single-family home, we're just a smidgen under that, 95%.

For condos, we're just above that at 97%. A couple takeaways. One is that there's no real indication of over-assessing. The other thing I want to mention is yesterday I was presenting to the budget Advisory Committee. I thought they had a really good question about regressivity for that.

So one of the things is, I've mentioned before, there's anything you hear is we're a non-disclosure state, and so we don't have all the sales. This is of the sales that we know about this whole year.

One of the things, you know, that question is on our radar, is one of the things that we have spoken and discussed this past year with our appraisal consultant. There are statistical tests for measuring regressivity, and everything that we have, we're well within those expectations, uh, threshold. But nonetheless, we are continuing to monitor. I thought that was a really good question that the budget advisor can be brought up yesterday. So I want to bring that up.

And at the bottom there is— that's not bolded, that's kind of more just an interesting little, um, comparison of our average assessed value compared to the MLS average sale price for that. But nonetheless, those are numbers that are interesting. First, and then here, and then here. Thanks. First, I just want to react to the fact that a condo in this town, the average is $200,000, almost $300,000.

Is that accurate? That's another— maybe follow-up. I would love to see a trend line on what— at least with valuations, I understand the point about non-disclosure, but from what we know, That seems crazy, but I'm interested in what the spread of the values is because I know that they can vary. And I guess the other question is, do you have a sense of what share of properties get sold in a given year? Like, you know, is it 100, is it 1,000, and then how many of those do actually voluntarily disclose?

And then I will say on the record, I voluntarily disclosed our sale, but I know we're not required to. I'm just curious, what universe of data are you working with knowing that it's not everybody? I have kind of a— let's see if I can pull that up here. While you were pulling up the land value of my house, I too voluntarily disclosed, but it was because I was assessed $50,000 more than I was worth.

There is definitely— there is definitely a cultural—. Like, wait a minute.

So this slide, this is not—. Mr. Gudenus, sorry, before you go on, can I ask you a question on the previous slide? Sure. So I'm curious, why is 96% the sale rate, sort of the goal number?

It seems like a strange number for a goal. And then looking at the sort of this, we've got, you know, single family slightly under, condominium slightly over. Does that mean that we're like— I'm— should I interpret that to mean that we're doing a pretty solid job of assessing the value, the true value of these properties? I mean, is that like the general takeaway? Is that where We're doing a fairly solid job.

Yeah, through the chair, Paul Wende. First, you're the first person to ever really ask the 96% goal, so that's great. Um, one of the main reasons— there's kind of two reasons for the 96% goal. So, um, the standard, the recommendation from a national perspective is that anything that's market value, if you are a jurisdiction assessing market value you should be within 90 and 110. So there's a big range there.

We, uh, our goal is 96% for the primary reason because of the lien date, January 1st. We get a property that's sold in the summer, there is a seasonality component that on January 1st, that's the worst time to sell your property. And so we want to be very mindful of that And so we're cautious, and that's, that's the main driver of the 96%. The other reason too is just we want to be a little cautious not to over-assess too and really push those boundaries for that. So those are two main reasons.

Hopefully that answers your question. Thank you. Well, there is a follow-up. Is that an industry standard then, like for governments to aim to 96%, or is that just an Anchorage adopted, like, goal? It's not uncommon.

I won't say it's a standard nonetheless, but it's certainly for that. Oh, I was going to say also too that the other takeaway from this is it— from all the data that we have here, um, I would, I would agree with Baldwin Day that we have some pretty good numbers, um, for what we have. Again, stressing especially in a non-disclosure state and with a little historical context Context, the condo piece is the last one that needs to be corrected, right? There was an issue underlining the assessment process for condos, and that was a big jump. That's right.

And our goal is not to do those jumps. We don't like those jumps. But here's a good example of the data and the challenges of being non-disclosure state. So we, this last year, we tracked about 1,200 listings. We don't value based on listings, but they certainly can help us, especially when we don't have data.

The number of sale inquiries we sent to the seller, 53— 5,322. Now, we sent it to the seller and, um, the buyer. So we have 10,644 letters we sent out, and of that, we had 489 returned to us. So about a 9% disclosure rate for this.

So the obvious question on this slide then is why did we have 3 times as much in '24 or even higher? Right, so another great question on that. The appeal process is where we get a lot of information and data, and so as much as the appeal process is— can be timely and expensive It is actually a process that we need, we need that constructive feedback.

So you're saying in 2024 we had a high number of appeals? 2024 We have— well, I wouldn't say a high number of appeals nonetheless to say that, but we just had that much more sales disclosed to us from that. We did, you know, through the chair to council, we did have more appeals last year than the prior several years. Okay, so basically you I don't know the answer to why it wasn't the appeals. It was— who knows?

Well, I, I would say majority of the reason— this is typical where we have the, the most recent year we have the lowest number of sales, and then we get more during that appeal period from that property. So the number of sales, uh, you know, the number of sales in 2024, we have 1,000. would say probably, you know, a good chunk of that was during the appeal period. I can't tell you, you know, the exact number. Does that answer your question? It just—.

It's fuzzy, but 3 times or twice as many as this year, and then even a couple hundred more than the year before, it's, it's high, higher than usual. I would expect next year that the number of 2025 sales we have will be hopefully double.

So there's a bit of a lag, is one way to say it. When it comes to commercial values for this, the first one to Largely driven by some of the market data that we received on that. Apartments, industrial, as well as retail, up around that 7-ish percent mark for that. I would say majority of this is really, again, probably just playing catch-up a little bit, right, for that. The bottom one, hotels, up almost double digits.

This one is really just about another notable year of hotels increasing largely from the post-pandemic recovery from that. And to put that in— yes, these are big changes, but to put some of this in perspective is to just do like an index comparing it, looking at from 2017 to 2026 as far as the values. When you look at the CPI, the CPI is that dotted purple line there, and the industrial is the only one that just beats it out, and then followed closely by the apartments The hotels, you can see, did a big dip during the pandemic. So the ones that got hit hardest, but they're not the only ones that got hit. There's also office and the retail that got hit much less though from that.

So yes, we have big increases this year, but when you put in perspective, especially when you look at from that inflation standpoint, we have some substantial recovery. And we might have more as we move on next year. So, Anna, you had a question, I think, on the previous slide. Oh, it was on this side. Okay, good.

Yeah, um, one, just wanted to, um, I did have a question on the hotel increase, but I think this tells the story, which is that it's not continually going up. It's like you said, it's recovering. Um, but I guess just backing up from this, um, you know, your job isn't— you're monitoring the market, but you're separate from the market rate, the setting the prices So properties there. I'm curious though how much we can interpret this as, you know, kind of the properties that are already there as they are now without any work, that they're just increasing, or is it that we're seeing maybe improvements to some of these, like, right, is it that the properties themselves are changing and that's increasing the value, or is it more kind of the relative maybe demand or other factors in the market that are And again, I know this is separate from market, but you're looking at that data. I'm just trying to think about how to interpret these changes in these different sectors.

Yeah, for the chart too, to broaden. I'll take— the data that we have here, this is basically looking at the assessed value for that. So look at more from like that tax-based perspective than anything really else from it. But when we do report the percent changes every year, we try to take out things like new construction or any like significant thing, um, you know, anything that's extreme like that. What we're trying to do is just get what the bulk of the real estate is, you know, whatever it is, your average office, what's the increase for that given tax year.

Does that answer your question? Yeah, I think I'm just still getting my head around kind of how to think about this stuff. Okay, moving on to personal property. So just to refresh everyone's memory, personal property is comprised of many different things. Inventory, you have your commercial airplanes, you have machinery equipment, various types of personal property.

Basically anything that's owned by business that's not permanently fixed to the property.

As I mentioned before, we don't have 2026 data. This is just looking at the historical taxable for personal property from it. As I mentioned, we do expect to have about a 5-ish percent reduction for 2026. We'll see where that goes. The main reason for that is that increase in the personal property exemption.

So for this year, we will be seeing that exemption go from $20,000 to $100,000. We.

As I mentioned, it'll be less than about half a percent to the tax base. What we've done so far is we have notified those businesses of this change. The other thing, and I remember in the assembly workshop this last year, was the notion that, you know, some property owners may not even be aware that they have to file personal property information. So because of this, we will be freed up a little bit, and we— our goal is to be proactive with a goal of higher compliance.

This slide is looking at— basically, it's a histogram. It's a count of the businesses, and it's, it's broken down by the assessed value of that business. And again, this is for personal property. I have, I have in 3 different colors. The first color is that light, light red.

That's the fully exempted property now. So that's property that's $20,000 or less. And then you have the count of that, so it's about just under 200. And then you have the property or the businesses in dark red. Those are the ones that we expect that will be going fully exempt to come 2026.

It's a little over 1,000 when you count those two red bars. And then you have the blue, which will still be taxable even after that $100,000. So about 36% of the businesses come 2026 will be fully exempt from that, and about 58 roughly will expect to be remained. Again, being more proactive with our enforcement. Question: are we sending letters out to them?

Yes. Are they going to say something great like, "The mayor and the assembly have relieved you of these taxes"? I think— I forget the exact wording, but we were pretty dry. That's not shocking. It's fair.

Yeah, I think we want to be cautious of putting political statements in, like, a— Political statements in tax bills. I think we have a good section on that. Yeah.

But I think this is also just to flag another interesting example of the volume versus value thing, is that, like, as you said, there's 1,000 businesses that are exempt, or would be fully exempt. And so the number looks big, and yet what they were actually taxable for was relatively small, versus that other one on the very far right, which is probably a relatively small number of businesses with a huge amount of assets. And so it's an interesting— is it the Pareto principle, 80/20? Anyway, just to flag, because I think when the discussion happened, we knew that most most of the taxpayers are very large taxpayers, and then there's a whole bunch of folks who are small taxpayers. So it's like large number on this side, small number but large dollars on the other side.

Thanks. Yeah, this is kind of a different way to look at that chart. This is by value now to basically show exactly what you were just saying, that's, you know, count and value are two very different things.

Okay, so the evaluation notices. This is the last thing, and I want to be mindful of time. I think we have just a couple of minutes left, so I'll try to be really quick here. The evaluation notices will be mailed on Monday, so they're coming out. The back of the card— actually, thanks to the ombudsman last year, we got some constructive feedback.

I think we made it a little bit better, a little bit more intuitive for the average reader, so thank you to the help us for that. The deadline this year is going to be February 11th, the appeal deadline.

This slide here does talk about the timeline of the appeal process for things. So January 12th, like I said, we're mailing them. We do have a 30-day informal review period. I have green, yellow, orange, red, specifically because the main point is come early if you have a constituent that has a question about that property. Often we can resolve that issue or question without them having to file a formal appeal.

It saves everybody lots of time from that. February 11th, like I mentioned, that's the deadline to file an appeal. And then, you know, come mid-February, we're going to be working with the property owners The Board of Equalization starts about late March, early April, and we hope to be wrapped up by early June. Emma. Thanks.

I will say what I said yesterday in the Budget Advisory Commission, just a brief plug for the Board of Equalization, one of the few boards that the Assembly oversees directly and appoints people to, versus the mayor appointing most of the other boards and commissions. Most of their work, as noted, happens in the spring. I think we may have a prospective member, so just getting the word out there, and it keeps the assembly from meeting the Board of Equalization, which is great. And so just another plug, because if there's a member of the public listening to this right now, you may be the best candidate for this board. So please apply if you're interested.

Talk to the clerk's office. Thanks. Thank you. Karen? Thank you.

So if we are to send people who have questions about their notification to you early and often, who should receive those emails? To you directly or someone else in your office, or who's the appropriate person to direct people to? Yeah, so we have— I have some of the— the appeal hotline is one of our main tools, so it's at 343-6500. And yes, it can be kind of annoying, it's like press 1 for single family, press 2 for condos, and so forth. But that is a good system.

We try to get back to people within 2 working days. That's probably going to be the most efficient for them, but they can also come to City Hall from that. Also, you could visit our website as well. Those are probably our 3 best ways to do that. And then I have a couple of just process questions with respect to the Board of Equalization.

So, um, has any progress been made in the question about, you know, phone calls or automated messages being sent to folks who are actually scheduled for a hearing to try to minimize the number of no-shows. Yeah, thanks for the question. So thanks for bringing that up. Yes, last— the last year there was a request to change that, but that's largely going to be changed midstream, which we were very cautious about. As a result, this year we did have— we, we have that ready to go.

They will receive an automated call prior to the hearing. I believe we're having stuff for one day prior to the hearing. Awesome. And has there been any change in the language to the actual, you know, hearing notification that helps to clarify for folks that, um, you know, a no-show has negative consequences?

I'm not aware of any. I know that we did a slight change in language for that, but I can certainly review that to see if there's anything. We've historically been very cautious to not do like a threat or anything with the appeal deposit, um, and just, you know, try to, to, to work with that property owner. But typically, you know, the appeal deposits, you know, 90% usually get returned, at least 90%. I think this year you'll see, I can skip to it, but the 92% of the top properties this year were returned.

But I think one of the things that you're paying attention to and hearing about is the number of property owners that did not appear at a hearing. This time it was 26, which is about up 3 times of what we've seen before historically for that. So typically it's always been relatively low. For whatever reason, this past year was very high, so I'm hoping that the full cost will help. Me too.

Thank you.

I'll just keep on this slide. There is a, there is a one slide before this that talks about the number of appeals. I'll just kind of show you guys that this has been increased in the last couple of years for that, and, uh, Last year we had about 455 appeals.

This slide, the biggest thing I like to show on this slide is that 85% of the appeals of the 455, 85% were withdrawn without having gone to the Board of Equalization. And so in other words, words, the property owners signed, agreed on that value, whatever that is. 85 Of that 85% did have some type of reduced value. And it's not like our goal is to reduce the value, um, just to reduce the value, but I think there's twofold. One, it's really helpful that— I really like that my staff are not digging in their heels, but they're trying to be creative at it, looking at that problem.

Also, too, that does show that there's good evidence that warrants an adjustment, um, whatever that may be.

Anyways, that's pretty much the end of the presentation. I must say that I appreciated all your questions, whether I could answer them or not. My apologies if I couldn't, but thank you. So, Jack, before we finish, um, several years ago now, there was a commercial property that was in construction, a hotel, and a fire burnt it down, and then we changed the code to allow kind of an exemption based on— or I don't know, it's not an exemption, something else. It's like a disaster relief, like a valuation change.

And I know that that hotel is in construction now.

On that same lot that was kind of reduced back down to land. And I am curious what the process is for that being kind of brought back to its old tax rate, and if there are other properties that have been kind of pulled into that program. I know that when we created it, had some risk, um, and so I would love to kind of follow up, not here and now, don't want to put you on the spot for that, but on that question of how that program, that code section has been implemented and how it should work to get the property back to full tax value. And is it worth, uh, worth having it there? You know, is it the risk higher now, lower?

You know, kind of a subjective conversation. Yeah, I'll briefly speak to that right now without any, you know, any data. But so it is a section of code. It's not an exemption. It's called a disaster relief And basically what it— what the goal is, is to say, okay, your property burned down, and it does basically like a proration of what the value was for the number of days of the year that, you know, it was up and running, and then does like a proration on the taxes, not the assessment, for the latter, you know, the latter half of it was burned down.

Yes, I do remember that. I also remember during the earthquake period that there was discussion about maybe including earthquakes on that, but ultimately that, that was decided not to do. So it's still just residential, commercial. Anecdotally, I can tell you that majority are residential that come across my desk, which we really almost didn't do. And, um, I think we need to look at how it's— the numbers— let's look at the numbers sometime in the next month or two.

Okay. Okay, anyone else have questions? Very informative work session. Quiet people on the phone, sorry you missed out on the nerd fest in here, but it was very satisfying. Thank you, Jack.

We'll have you back when we can. Um, Anna, anything to add? For the record, Member Balderrandé and I did not coordinate on our sweater choice. Just want to put that out there. Thank you.

It's collusion. I'm glad I didn't put on my white sweater that I almost put on. So, okay, thank you. See you in a German, if you're back.