Depending on where you live in Southeast Boise’s Barber Valley, your property tax bills could be wildly different.
There are roughly 600 homes in the Harris Ranch development paying into the city’s only community infrastructure district. This special taxing district charges an extra levy on a property owner’s tax bill. The money goes to paying for improvements in the area, like the Warm Springs bypass and a drainage basin located in the area to protect the area from landslides and flooding. The concept is as the neighborhood grows, new residents will foot the bill for the costs associated with them moving into the area. Growth paying for growth.
But, not everyone in the area in and around Harris Ranch is paying into the district even though they all reap the benefits of the taxes. And as the property values in the Treasure Valley continue to climb, the property tax burden continues to rise with it leaving some residents blindsided by the extra cost.
Why are some properties included, and not others?
The Harris Ranch CID does not cover the entire neighborhood, and there are some pockets of the area where homes who pay into the district are only a street away from those who don’t. The reason the district is not covering the entire area is due to the land ownership at the time when it was founded in 2010. For example, there is a pocket of homes in the northwestern section of Harris Ranch outside of the CID. The Harris family sold that land just before the creation of the CID to Boise Hunter Homes in 2009.
Only landowners can decide to join the CID. At the time of the district’s creation, the Harris Family owned large portions of the land they wanted to develop and opted these parcels into the district. Those areas, which were built into the subdivisions you see today, have since been sold to homeowners and other developers to build on, but they still are in the CID and owe the extra taxes. Boise Hunter opted not to join the district for its sliver of land in the project.
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Doug Fowler, who oversees the development of Harris Ranch, said he understands why some people in the CID would like to see more of their neighbors included, but it’s not that simple. It would require a two-thirds vote in an area for residents to choose to join the CID, which would require residents to agree to pay more taxes.
“You’re not going to be able to go to these people here and say ‘do you want to pay more taxes?’ because they’re probably not going to say ‘you bet I do’,” he said.
How does it work?
Harris Ranch is a long-term project, which Fowler estimates has another 10 or 15 years before completion. He said the goal in starting the district was to make sure there would be a steady stream of funding available to complete projects and the necessary infrastructure in the event of a massive financial fallout at the investment banking level, like the Great Recession. Creating the district allows it to have a bonding capacity of up to $50 million to pay for projects over time. So far, nearly $16 million in bonds have been taken out.
The district will end, and the taxes will stop being levied, when all of the bonding capacity has been used and the debt has been paid. There is no concrete date for this to happen because it will depend on what projects happen when, and how many new homes are added and when a planned commercial district is added. Fowler said the CID could end as soon as 2032 or as late as 2050.
This is different than a typical subdivision where the infrastructure costs and amenities are priced into the cost of the home directly and improvements are built only by agencies like the city, county or highway district. Fowler said the CID allows the developer to keep lot prices competitive when they sell to builders to keep the upfront cost for the homes down in comparison to the amenities you receive, but it results in higher taxes later.
Harris Ranch is not the only CID in the Treasure Valley, but it is the largest. There is also a CID in the planned community Avimor off of Highway 55 with 355 homes. The City of Eagle also has a CID in Spring Valley, near Avimor, but it has never set a levy rate or collected any taxes. There are only five homes in the district, according to the Ada County Assessor’s Office.
The City of Boise also considered a CID for Syringa Valley developed by CBH Homes in South Boise, but there is no discussions ongoing currently.
The Idaho State Legislature passed a law laying out the CID process in 2008. The district is managed by the City of Boise and has a city staff member working on the finances, but the developer completes the projects and determined how the taxes were set up. All of the expenses for administering the district are paid for by the taxes collected in the district, not the city’s general fund.
Of all of the taxing districts which levy taxes on the homes in the CID, only the City of Boise and the Boise School District have a higher rate. Each homeowner in the district pays an additional levy rate of .00289% of a home’s value each year. For a home assessed at $488,000 with a homeowner’s exemption, this is equivalent to $1,121 annually on top of what they already owe the city, Ada County, school district, and other taxing districts.
Tax assessments for properties inside and outside of the CID differ slightly. According to 2019 Ada County Assessor’s Office data for the area in and around the CID analyzed by BoiseDev.com, many homes inside the district were assessed for less when compared to comparably sized properties with a homeowner’s exemption.
For example, in homes on lots between .4 and .5 of an acre, the average assessed value inside the CID for 2019 was $785,662. The average assessed value for parcels of the same size outside of the CID was $869,650. Only homes on lots between .2 and .3 of an acre inside the CID came in priced higher, at $668,989 versus $600,054 for homes outside the CID.
Lot size Homes inside CID Homes outside CID .4 – .5 acre $786,662 $869,650 .2 – .3 acre $688.989 $600,054
‘Concerned about fairness’
The Barber Valley Neighborhood Association, which includes CID homeowners and those in all of the surrounding neighborhoods, takes a neutral position on the issue and is trying to educate residents about the CID and how it works before they buy.
Steve Moore, who moved to Harris Ranch in 2017 from Eagle, said he has been shocked in recent years at how high the taxes for the district are.
“I was aware of (the CID) when I bought in 2017 and I thought ‘oh that’s no big deal’ but I’ve come to learn just in the last couple of months what the impacts are and now it’s almost 20% of our tax bill,” he said. “It seems a little much, and the more I learn about it the more I am concerned about the fairness of it.”
The way the CID taxes are levied is unique. In most situations, when the property values increase and the number of properties paying taxes go up, the levy rate goes down unless the base rate is increased. More simply, the more people paying, the lower the burden per homeowner.
That’s not the case with the Harris Ranch taxing district. The levy rate remains fixed for each homeowner, which means as values continue to increase, so does the tax rate. Moore said he doesn’t necessarily object to paying the increased taxes or the concept of the district, but he would like to see it changed so as values increase or more homes are added the amount each resident pays decreases.
Fowler acknowledged taxes will continue to go up as values increase, but he said the tax increase is worth the appreciation in value for your home.
“The good news is once (the CID) goes away, all of the (things) it paid for stay,” Fowler said. “The conservation easements, the village green, the wide sidewalks, the 8-foot wide planter strips. All of those amenities will stay.”
Correction: A previous version of this story misidentified Steve Moore.