CLAYTON — A surge in home values across ºüÀêÊÓƵ County this year has sent tax bills soaring, and nowhere more than among small homes in lower-income neighborhoods.
From aging brick homes in Wellston to bungalows in Lemay, the appraised values of many small, single-family homes have jumped by double-digit percentages.
And with that has also come a rise in taxes.
The average appraised value in Wellston, which saw the biggest increases in the region, doubled from about $33,000 in 2021 to $67,000 this year, according to a Post-Dispatch analysis of assessment data in ºüÀêÊÓƵ County. Taxes rose almost 60% or $400 on average to over $1,000 this year. Other modest communities across ºüÀêÊÓƵ County saw similar increases.
In contrast, the average appraised value of homes in wealthier Ladue rose just under 11%, or about $113,000, to $1.2 million. And the average tax bill there went up by 12%, or by about $1,600, to a total tax bill of about $15,000.
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Skyrocketing demand for single-family starter homes has driven the imbalance, said experts and county officials. Some of that happened during the pandemic, when fewer homeowners put their houses on the market, driving up prices. And some came from a surge in investment firms buying up homes, especially starter homes.
Altogether, the demand caused ºüÀêÊÓƵ County home values to double in some areas for the type of house a first-time homeowner might want to buy.
“It’s counterintuitive,†said County Assessor Jake Zimmerman. “It’s not what you’d expect a normal real estate market to look like.â€
As a whole, the Post-Dispatch analysis found 2023 was an unusual year:
The 2023 reassessment brought the biggest countywide increases in appraised value, 18%, and tax amount, 11%, since 2013.
Property values went up nearly everywhere in ºüÀêÊÓƵ County, but they took off in North County. Total appraised values there jumped 29% from 2021, compared with 15-18% in the South, Mid and West County areas.
Homes appraised between $50,000 and $125,000 saw a bigger increase in tax bills, 18%, than homes worth $500,000 or more, where tax amounts went up just 8%.
The 3% of single-family homes that saw their appraised values drop or stay the same tended to be larger and more expensive.
Lemay, Oakville and Tesson Ferry townships in South County saw the biggest jumps, 19-23%, in their tax bills, driven in part by school district increases to property tax rates. These were the only townships where tax bills grew more than property values did.
The next biggest tax bumps, 18-19%, were in Norwood and Ferguson townships, which include Kinloch, Ferguson, parts of Berkeley, Jennings, Dellwood and others.
The trend sends tax bills with the steepest increases to homeowners least able to afford them.
The mother of a special-needs adult daughter in Lemay knows she’ll have to delay retirement until she pays off her mortgage — in 14 years. An 82-year-old grandmother in Wellston expects she’ll have to ask her children for help to pay her tax bill. And a stay-at-home mom and her husband, also in Lemay, are trying to figure out how they’ll afford feeding their four children and their tax bill, which increased by more than 300% this year.
The increasing sales prices can lead to overassessment — and higher tax bills — in lower or moderate-income neighborhoods, said Peter Hoffman, managing attorney for neighborhood advocacy at Legal Services of Eastern Missouri, which provides free help to low-income people.
Those neighborhoods can have a lot of vacant homes or homes that need major repairs. That can mean fewer sales, and less data for the assessor to analyze.
But everyone agrees home sales have risen markedly across the county in recent years. And, again, the biggest boost came in North County, where the average price jumped 90% since 2020 to almost $78,000 in 2022 in 63133, which includes parts of Hanley Hills, Pagedale and Wellston, according to sales data provided by Mark Gellman, CEO of real estate firm The Gellman Team.
Clearly, it’s good that homeowners are seeing their investments grow, experts said.
But the increase happened so quickly, and so sharply, that it created a painful reality, for some.
“It is a huge problem,†said Christy Kramlich, a Maplewood-based real estate agent who frequently represents first-time homebuyers. “It’s really rough on my lower-income people who want to buy because they’re approved for like $120,000. Well, you can’t find a house for $120,000 that is decent.â€
“People were paying just stupid amounts for houses, even the modest-priced homes,†Kramlich said. “There’s no inventory out there, so people are bidding way more than the house is worth. It’s just an ugly battle.â€
Modest home, big increase
Tia and Kevin Masters of Lemay saw their home’s appraised value increase by a whopping 364% this year, to $139,000 this year from $30,000 in 2021, even after they won a slight decrease in an appeal with the assessor.
The two own a modest three-bedroom home built in 1902 and live there with their four children. Kevin Masters is a truck driver, and Tia Masters stays at home with the kids, ages 21, 15, plus a 3-year-old and a 6-month-old. “I didn’t expect the last two,†she said.
But since they moved in, right next to the River Des Peres, the house has flooded eight times. They have foundation problems, and they’ve gone through three furnaces and a handful of water heaters. Their $1,900 tax bill, up from $450 two years ago, doesn’t make sense.
“I feel like if I’m paying all this money, I should live in Ladue,†Masters said.
ºüÀêÊÓƵ County assesses all properties — 400,000 of them — every two years. This year just wrapped up.
For the most part the using a mass appraisal system. A computer program considers sales of similar properties, the property’s size, the number of rooms and if there have been any building permits, among other factors.
The assessor then determines what each property would have been worth on the market.
“We take this magic snapshot in time of what your house would have sold for if you sold it on January 1,†Zimmerman said.
But when the market goes haywire, so do home assessments.
In Lemay, they jumped 17%.
Belinda Butler, 58, saw the tax bill for her home on Brook Avenue increase by nearly $400 this year on her 800-square-foot, nearly 90-year-old bungalow. Her home’s appraised value increased to almost $137,000 this year from $100,000 two years ago.
Butler works about 65 hours a week on the showroom floor for a construction equipment rental company. She loves her job, but she knows she won’t be able to retire on time because she also supports her adult special-needs daughter.
“I have 14 more years before I can pay it off,†said Butler. “But I’m tired now.â€
“Gas has gone up. Insurance has gone up. It affects every aspect of living.â€
Why taxes rise unequally
Tax bills don’t go up because of skyrocketing home values alone. School, fire and ambulance districts each set their own tax rate, as do municipalities.
And when there are fewer homeowners in any one community paying taxes, tax rates are higher because costs are spread over fewer people. Some also have fewer businesses to help cover costs.
The Riverview Gardens School District, which includes several small North County municipalities, had the highest tax rate in the county, at nearly 7.6%. Clayton, Ladue and Kirkwood school districts, in contrast, had among the lowest tax rates — between 3.6% and 4% last year.
So Butler, the Lemay resident, is paying a cumulative 7.3% tax rate on her home this year, or $1,900 in total.
But Pearl Hughes, 82, pays nearly 10% on her home in Wellston, tax records show, or almost $1,300 on a house valued at half as much as Butler’s.
“It’s going to make me beg my kids for donations,†Hughes said with a chuckle.
She suspects the value of her home, where she has lived with family for 50 years, went up because of a new housing development around the corner.
The suburban-like homes in Eskridge Estates go for about $200,000 and up. And the assessor’s office used sales of those homes last year to determine the value of Hughes’ home.
“It was just a shock, and I mean that for real, to see how much my real estate taxes had went up,†said Hughes, a retired bus driver.
Developments like Eskridge Estates threaten to send longtime residents such as Hughes packing, said Farrakhan Shegog, a Wellston housing advocate with the Urban League of Metropolitan ºüÀêÊÓƵ and a Democratic committeeman. He wants to see new development in Wellston, but not at the cost of pricing residents out.
“There’s people right now making the decision between paying their taxes or using their money to fix the deplorable conditions of their homes,†Shegog said.
Hughes says she won’t have to make such a decision. She has five caring kids, and a bunch of grandchildren and great-grandchildren who call her “Sunshine.†They’ll likely come to her house for Christmas for turkey, mac and cheese and candied yams.
But she still worries about how much that meal will cost — not to mention all the work she needs done on her home.
“Everything is going up,†she said, “except for my Social Security check.â€
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