Apartment buildings may bear the brunt of property tax increases in 2021
By Jane McClure
Some Saint Paul homeowners are likely to get a break in 2021 from the seemingly perennial large property tax increases. Although the Saint Paul Public Schools is projecting a maximum 5 percent increase in its property tax levy nest year, the Saint Paul City Council and Ramsey County Board have voted to hold their property tax levies flat.
Combined, the maximum levy for city, county and school district would increase by 2.2 percent from 2020 to 2021. If that holds true, property taxes on the median-valued home in Saint Paul will see a relatively small $36 increase in 2021.
Property taxes are based on the assessed value of a property. The assessments are in turn based on the sale price of comparable properties in the same neighborhood and any improvements that are made to the property.
The assessed values of Ramsey County properties for the 2021 tax year were established before the COVID-19 pandemic struck last spring. Still, home values continue to rise, according to Ramsey County auditor-treasurer Chris Samuel and county assessor Luis Rosario. That is largely due to the demand for homes outstripping the low supply of homes on the market, they said.
The market values of properties in Saint Paul are increasing in the double digits for 26 percent of homes, 77 percent of apartment buildings and 41 percent of commercial and industrial properties, Samuel said.
However, that trend could change with an economic downturn, Rosario said. He cited the commercial sector as being especially vulnerable with many retail business, restaurants and offices having closed in the past six months.
The median-valued home in Saint Paul has seen an 8 percent increase in market value over the past year—from $199,800 in 2020 to $215,800 in 2021. The property taxes on that home were $3,030 in 2020. With shifts in the property tax system, gains in fiscal disparities and the homestead exclusion benefit, no increase in the city and county tax levies and a 5 percent increase in the school district’s levy, the property taxes on that median-valued home will increase by 1 percent—to $3,066 in 2021.
The median-valued commercial property in Saint Paul has seen a 4.9 percent increase in market value—from $464,000 in 2020 to $486,600 in 2021. Taxes on that property will decrease slightly from $16,030 in 2020 to $15,950 in 2021.
St. Paul school district is poised to increase its tax levy for 2021 by 5%
By Jane McClure
The Saint Paul School Board has adopted a maximum 5 percent increase in its property tax levy for 2021 in support of the school district’s budget for the fiscal year beginning in June 2021.
Saint Paul Public Schools officials are concerned about a possible decrease in state aid for the schools, according to district lobbyist Mary Gilbert Dougherty. The COVID-19 pandemic has sent state revenue into a downward spiral with a $2.426 billion deficit projected for the current biennium. Another concern is an expected 6 percent decline in school district enrollment and the resulting drop in state per-pupil funding.
The school district’s property tax levy would increase $9.38 million—from $187.63 million in 2020 to $197.01 million in 2021. The levy makes up about 22 percent of school district revenue, according to Marie Schrul, chief financial officer for the Saint Paul Public Schools. Other revenue comes from the state and federal government.
Estimates of the overall effect of the maximum property tax increases for 2021 will be mailed out to Ramsey County property owners between November 10-24.
Ramsey County will hold its truth-in-taxation hearing at 6:30 p.m. on Monday, November 30, virtually and in-person at a location yet to be determined.
The city of Saint Paul’s public hearing on the tax levy is scheduled for 6 p.m. Wednesday, December 2, at City Hall.
The Saint Paul Public Schools’ tax levy hearing is scheduled for 6 p.m. Tuesday, December 8, either virtually or at a location yet to be determined.
Continued growth in the market value of larger apartment buildings (those with four or more units) is likely to make rental housing less affordable, according to Samuel. As pandemic-related rental assistance programs expire, there will likely be a spike in evictions and apartment vacancies, he said.
The median-valued Saint Paul apartment building has seen a 16.6 percent increase in market value—from $878,100 in 2020 to $1,024,000 in 2021. Property taxes on that apartment building will increase by about 8 percent—from $17,827 in 2020 to $19,165 in 2021.Continued growth in the market value of larger apartment buildings (those with four or more units) is likely to make rental housing less affordable, according to Samuel. As pandemic-related rental assistance programs expire, there will likely be a spike in evictions and apartment vacancies, he said.
Saint Paul neighborhoods seeing the largest percentage increases in home market values are the Greater East Side, West Side, Payne-Phalen, Como, North End and Sunray-Battle Creek-Highwood.
Neighborhoods served by the Villager are seeing varying levels of market-value increases, but because of shifts and changes in the property tax system, even homes seeing larger value increases may see lower property taxes in 2021.
The greatest home market value increases over the past year have been in Summit-University, where the median-valued home has seen a 7.1 percent increase—from $230,200 to $246,500. Property taxes on that home will decrease slightly from $3,576 to $3,573.
In the West End, the median-valued home has seen a 7 percent increase—from $195,650 to $209,300. The property taxes on that home will increase slightly from $2,956 to $2,958.
Union Park’s median-valued home has increased 4 percent—from $324,000 to $337,100. Property taxes on that home will decrease by 3.5 percent—from $5,257 to $5,072.
The median-valued home in Macalester-Groveland has seen a 2 percent increase in market value—from $350,000 to $356,900, and its property taxes will decrease 5.7 percent—from $5,725 to $5,400.
Highland Park’s median-valued home has increased 2.2 percent—from $334,950 to $342,400, and its property taxes will see a 5.4 percent decrease—from $5,455 to $5,160.
Summit Hill’s median-valued home has seen a 5.5 percent increase—from $402,450 to $424,500. Its property taxes will decrease by 2.2 percent in 2021—from $6,664 to $6,519.
Downtown Saint Paul has seen a 1.6 percent increase in its median-valued home—from $179,500 to $182,300. The property taxes on that home will decrease by 5.8 percent— from $2,667 to $2,511.
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