At the end of the last article I called equity the other approach to value. Ideally it should be called the other approach to assessment, because it isn't an approach to market value estimates at all. Equity is all about fairness. Specifically that your property tax burden is fair when compared to your neighbor, or your competition. Most states that I have worked in require that tax jurisdictions must assess based on equity, or "uniformity." This is to ensure that the tax burden is distributed fairly. The exception that I know of is Florida, where equity isn't a valid reason to appeal.

I touched on the equity argument throughout article 2, The Three Approaches. When I talked about having the same quality codes in the CAMA cost approach, or the same depreciation schedule, that's equity. When everyone's cost approach value is adjusted up or down based on the same sales from the same market area, that's equity. When all neighborhood shopping centers in the same market area have the same market rent estimates, the same expense ratios, and the same cap rate, that's equity.

When market areas are being developed and there is a lot of new construction the assessments often start out as equitable. But over time, after many reappraisals and different property owners appealing there assessed values things begin to change. Now the competing property down the street has a lower quality code in the cost approach because the owner appealed two years ago. Or the competition has a higher expense ratio in the income approach because the property owner appealed. These are the types of differences to look for.

If you can get the assessor's detailed property record cards for your property and your competition, you can go through them all and identify the differences. Often these computer generated property records have a lot of codes that can't be understood without a "key." Ask the assessor's office for this key so you can make sense of the cards.

If you can get the assessor's detailed property record cards for your property and your competitor's you can go through them line by line and identify the differences. If the other properties are similar to yours question the differences. Call the assessor's office and ask for a key to unintelligible codes that may appear on the record cards.

Generally, equity is a good complementary argument to support a cost, sale comparison, or income approach argument. Although many states consider equity, it often is not considered on its own. It does require a lot of work, but it may be one of your best arguments.

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