A decade or two ago, Becky Boyd recalls, two neighbors living in a house across the street had to leave their home. It wasn’t by choice — they were priced out of their house because of rising taxes, Boyd said.
She was sad to watch them go. She never thought the same thing would happen to her.
But Boyd, now 69, is at the point where she must sell her house. Taxes, she says, are the reason.
“I resent being forced out of my home that I’ve had for forty-plus years,” she said in an interview.
Seniors like Boyd are finding themselves in a crisis: As taxes rise, their fixed incomes do not keep up. Some people, particularly retirees, are realizing that as property taxes keep climbing in Ada County, houses that are otherwise completely paid for can suddenly become too expensive to keep.
It’s hard to say how many seniors are selling their homes and moving because they cannot afford the property taxes, because there is no documentation of it happening. Ada County Assessor Bob McQuade, who saw homes’ median assessed property values rise more than 16% last year, said he hasn’t received reports himself but “can’t help but think people are in that position.”
Rising property values affect some homes more than others, but local government spending determines how much homeowners overall are taxed. For the past decade, most homeowners’ taxes have gone up faster than inflation.
In 2000, the median Ada County property tax bill was $1,116. In 2018 it was $1,996, a 79% increase. Consumer prices nationwide rose 44% in that time, according to the Bureau of Labor Statistics inflation calculator.
From 2008 to 2018, median tax bills rose from $1,339 to $1,734, an increase of nearly 50%. That compares with 20% inflation.
Boyd said she paid $10,000 in 1972 for her 1,600-square-foot, single-story farmhouse built in the 1890s. When she bought it, she didn’t yet understand what escrow was.
“The goal at that time was to have a house paid for,” she said. “I didn’t want to worry about a roof over my head when I got to be this age.”
The house is beautiful, with green paint she picked herself to match an old nursing uniform. It has white and brown trim, an open front porch, a covered back porch and a white picket fence. Her dog, a hunting dog named Bojack, likes to play in the backyard.
She said she has paid the house off multiple times after borrowing against it for repairs, and for a while, it looked as though that original goal had been achieved.
But then came a snowstorm that damaged her roof. Then came retirement, earlier than she expected, after she got sick. Suddenly her only income was Social Security.
Her house has almost quintupled in value since 2000, from $82,000 to nearly $400,000. Her taxes rose with it. In 2008, she paid $1,747 in taxes. By 2018, her taxes had risen 119% to $3,829. They’re now at a point where she can’t live there any longer.
Krista Broderick, a 60-year-old who once worked in marketing at Hewlett-Packard, said she and her husband can afford the property taxes on her home in Boise’s East End only because they rent out a cottage in their backyard.
The Brodericks, who are both retired, bought their house in 2004, when its assessed value was $262,900. In 2019, it is assessed at $693,000. Krista said her tax bill will be over $9,000, more than twice the $4,324 it was in 2008.
“If taxes keep going up at the rate it is right now, I’m going to have to leave the community,” Krista Broderick said.
McQuade, the assessor, feels their pain. Last year, sitting at his dining room table after he got his assessment notice, he realized he could one day be in the same position as Boyd and Broderick.
“I just thought, ‘I don’t know if we’ll be able to stay in this house after I retire if the taxes keep going up that way,’” McQuade, who earns about $103,000 a year, said. “That really brought it into focus for me.”
His 2,900-square-foot house in the Collister neighborhood is assessed at $522,200. Taxes in 2018 were $5,496, up from $4,493 in 2008, a 20% increase.
Taxes on the rise
The 2019 property assessments marked the biggest one-year increase at any time in at least 12 years.
According to the Intermountain Multiple Listing Service, the median home price in Ada County in June was $354,405. In June 2018, it was $322,317. A decade ago, in June 2009, it was $175,000.
Canyon County’s prices and assessed values are lower, but the rate of increase has been almost identical. In June, the median home price was $247,608, up from $223,350 in June 2018. In June 2009, it was $115,000.
McQuade told the Statesman in May that he attributed the surge primarily to people moving to Boise from more expensive areas, particularly on the West Coast.
Boise recently topped the list of “best cities for seniors” put out by apartmentguide.com, while SeniorAdvice.com listed Boise as a top 20 city to retire in, in part because of “lower cost of living and taxes.” That may be true for people who sold expensive coastal homes and moved in, but for people who have spent their lives here, it can feel more like a slap in the face.
Higher assessments themselves do not themselves lead to higher taxes. That’s up to taxing districts like cities, counties and school districts, many of which are in the process of setting their 2020 budgets over the next few weeks.
An increased population also plays a role, as more people living in the area make land more valuable. In May, McQuade told the Ada County Highway District commission that on average, 49 people move into Ada County every day.
On top of that, property owners are having to pay a larger percentage of their taxes as the homeowner’s tax exemption, worth $100,000, stays capped.
The exemption was created temporarily in 1980 to save 20% of taxes, worth then up to $10,000. In 1982, a citizens initiative made the exemption permanent and raised it to 50% of the value of a house (land notwithstanding), capped at $50,000.
The cap was raised to $75,000 in 2006, when the Legislature tied it to the housing price index. It reached a peak of $104,471 in 2009. In 2016, the Legislature capped it at 50% or $100,000 to bring predictability to taxpayers.
The trouble is that with skyrocketing property values, that $100,000 is worth less each year.
Two legislators — Boise Democratic Sen. Maryanne Jordan and Nampa Republican Rep. John Vander Woude — introduced a bill in March to remove the cap and once again tie the exemption to the housing index. It was not given a hearing, but Jordan, who was once president of Boise City Council, told the Statesman that she hopes to bring the bill back in the 2020 session.
“For the Legislature to have capped that exemption was a real disservice,” she said in a phone interview.
She anticipates the bill will have more co-sponsors when re-introduced because skyrocketing property values are being felt by taxpayers all over. The pain of growing taxes is “not just in Boise anymore,” Jordan said. “It’s all over the state.”
McQuade said he would like to see the exemption indexed again. The diminishing value creates a problem for homeowners, particularly people whose homes are worth more than $200,000.
“When you get to $200,000, you now have the maximum homeowners exemption,” McQuade said. “As soon as you cross over that, you see a very rapid increase in taxable value.”
Rising government spending
Idaho law allows local taxing districts to boost the revenue they collect from property taxes up to 3% per year without voter approval. They also increase their tax revenue from growth — that is, when new construction or annexed property is added to the tax rolls.
Boise Mayor David Bieter’s proposed 2020 general fund budget takes the full 3% plus 1.8% for growth. City Budget Manager Eric Bilimoria said property taxes pay for two-thirds of the $241 million general fund budget, which pays for police and fire protection, parks and libraries.
Nonetheless, taxes for some homeowners could rise more than 3%, especially if their assessed values rose at a faster rate. Taxes could go down for homeowners whose appraised values increased at a slower rate.
Data from the city shows that Boise’s average city tax bill will rise nearly 9%. A city chart shows that the city’s levy rate would fall 13.5% to offset this year’s sharp rise in property values, but the average homeowner would pay $105 more. The average bill for city taxes would rise to $1,314, from $1,209 now. Those figures are based on a rise in the average home’s assessed value to $330,200 from $283,100.
“Because we’re bound to this 3% increase, every year, it’s looking at who is responsible for paying that increase on the overall burden,” Bilimoria said in an interview. “It really is the rate of increase and what proportion that homeowner makes up of the total pie that represents taxes paid.”
Increasingly, that pie is paid more by residential property owners than commercial ones. Residential values are have risen faster than commercial values in recent years. That has moved part of the tax burden off commercial properties and onto homes.
In 2017, residential property owners paid 68% of Ada County’s total property taxes, while commercial property owners paid 32%, McQuade said. In 2018, residential property owners paid 70% while commercial property owners paid 30%. That’s a big shift in a single year, he said.
There are programs in place to help protect seniors like Boyd, though the help is often limited. The most well-known is the “circuit breaker” program, which allows certain people to reduce their property taxes.
The requirements include being on a limited income, which for the 2019 tax year was $30,450 or less in 2018. A person must also meet at least one “status” requirement, including being at least 65 years old or disabled, as recognized by the Social Security Administration.
The reduction can be as much as $1,320. There is a limited window from January to April to apply. The reduction does not automatically renew from year to year, though people who received the deduction in Ada County one year are automatically sent a new application for the next.
Despite population growth, the number of approved applications in Ada County has been consistently around 4,000 people per year since 2007, according to data from the assessor’s office.
McQuade thinks not many people know about the program, even though his office visits senior centers to talk about it. Those who do know can find it difficult to qualify, especially because the annual maximum income for those eligible has risen slowly. In 2016, the annual maximum income for those eligible was $29,470. In 2019, it’s $30,450.
Another program is tax deferral. The income limit is higher, but it places a lien on the property. If a senior defers taxes and then dies, that property cannot be transferred to another owner until the lien is paid. Some seniors, particularly those who want to pass their homes down to relatives, don’t want to put that burden on loved ones.
Boyd tried using the circuit breaker program twice a few years back. She says she was given $600 in relief one year only to have her taxes jump $1,000 the next year.
“I wish there were better resources,” Boyd said. “No matter what I do, it’s tight ... especially when they keep jacking up the taxes.”
Around the country, other places have found different solutions to keep seniors in their homes. In Washington, D.C., for example, seniors can apply for tax relief that reduces a qualified person’s property taxes by 50%, as long as they are 65 years or older and make less than $133,100 in the 2019 calendar year.
McQuade is hoping to form a task force to study the problem. The first step would be to verify that seniors are getting forced out, he said. The second would be to brainstorm solutions to stop it from happening in the future.
‘Most devastating thing that’s happened to me’
Any potential relief won’t come soon enough for Boyd. Her house is listed for $505,000. She said she has a few serious potential buyers.
If she could, she would sell the house to her adult children or someone who plans to live in it rather than flip it. Now, her goal is to just get it sold.
She stills finds herself living off credit cards, falling deeper into debt. Her retirement plans, including a 401(k), have been cashed out. She took out a home equity loan, but she’s already used up half of it. Besides her car, a 2005 Chevrolet Trailblazer with 125,000 miles, her house is her last remaining asset, she said.
Giving up her house also means giving up her home, a place she lived with her loves throughout the years (she was married twice but refers to her fiancé who died in the 1980s as her husband as well) and her children. It means leaving behind a place that has had the love of a dozen people invested into it, from a beautiful custom window frame made by an artist friend to a giant kitchen with ornate blue-tile floor.
The money she makes from the sale of her home has to last her for the rest of her days.
“This is probably the most devastating thing that’s ever happened to me,” Boyd said. “I don’t want to live anywhere else, except right here in this neighborhood. I want to live in my house with my plants and yard and street. ... I have no idea where I’m going next. I just know I don’t want to be anywhere but right here.”
Business Editor David Staats contributed.