Values of commercial properties in Polk County will likely grow an average of 20% in 2023, with increases varying across property type, Polk County assessor officials said.

However, not all of 2022’s commercial sales have been researched, so the estimate could change, officials said.

“Since our last re-assessment in January 2021, we have been in an appreciating market,” Bryon Tack, Polk County’s deputy assessor, said. “That means assessments are increasing.”

In Iowa, countywide reassessment of properties occurs each odd-numbered year. Around April 1, about 190,000 assessment notices will be mailed to Polk County property owners informing them of the new values of their commercial and residential properties, county officials said.

Property values are part of the formula used to determine owners’ property tax bills. In Iowa, 90% of a commercial property’s value can be taxed after application of the state’s business property tax credit. With the growth in valuations, commercial property owners will likely see larger property tax bills, county officials said.

“We’ve seen [hotels] come back quite a bit, but I don’t think they’ve come back all the way to where they were pre-pandemic.”

Bryon Tack, Polk County deputy assessor

How much commercial property tax bills grow will also depend on tax rates set by taxing bodies such as cities, schools and counties. Those rates are expected to be set in late February or March.

In 2021, the overall value of the county’s 9,329 commercial properties rose an average of 9.2%. However, 2021’s assessed valuations varied widely between sectors. The values of warehouse properties grew an average of 35%. Hotel, theater, restaurant and bar, and health and recreation property values fell an average of 30%. Office, retail and grocery properties saw their property values increase an average of 3%.

Tack said he doesn’t expect to see as wide a difference in commercial valuation growth as occurred in 2021. Many of the properties that saw declines in valuations were adversely affected by the pandemic. Hotels, for example, saw dramatic drops in overnight stays because people stopped traveling for several months, both for pleasure and business.

Many of the county’s more than 120 hotel properties will likely see significant increases in their property values, Tack said. But the increases won’t bring valuations back to the levels they were at in 2019, he said.

“We’ve seen [hotels] come back quite a bit, but I don’t think they’ve come back all the way to where they were pre-pandemic,” Tack said. “But they are getting there.”

Assessors will look at the sale of hotel properties and occupancy rates to help them determine values, Tack said.

County assessor officials are grappling with valuations for downtown office buildings, said Randy Rippenger, the county’s assessor.

“I think office property is going to be a huge challenge for us,” he said. “The values may drop; I just don’t know by how much. … Part of the problem is that we don’t have any sales, and that’s the No. 1 thing we rely on.”

Tack said he expects to have all the commercial sales data and research compiled by late February so that valuation notices can be mailed by April 1.

Property owners will have until April 30 to appeal their assessments.What’s the forecast for residential property values?
Polk County’s residential property owners will see the values of their properties rise sharply this spring, the county’s assessor said. The area’s strong residential real estate market, coupled with low interest rates for home mortgages, has fueled the increase in valuations, which are expected to increase an average of 22% countywide, said Randy Ripperger, the county’s assessor. The expected increase is the largest jump in the past several decades, he said. Continue reading