Dixie & the Bitter Pill

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Working with frustrated property owners is part of Dixie Phair’s job. As Commercial Real Property Analyst for the Any Municipality County Assessor, she often has to explain the property taxes as they relate to the valuation process. Today she’s using the owner’s analogy...

Owner: My property taxes are too high. I wish there was a pill for that.
Dixie: If we had a pill for that, are you sure you want it?
Owner: Yah, if it helps lower my taxes.
Dixie: The pill we have available has proven bitter for some, I should warn you.
Owner: What part is bitter?
Dixie: The actual market value of your property will be reduced.
Owner: Why do I care if I don’t intend to sell it?
Dixie: If the value is reduced, the income generated from it will be reduced.
Owner: But I occupy it, and I don’t pay rent, so I don’t get the bitter part.
Dixie: The production or other benefit you derive from occupancy will be reduced commensurately with the loss in market rent and market value.
Owner: I just store cars in it. I don’t see how my benefit will be reduced. I think I’ll just take the pill.
Dixie: The pill will diminish the property desirability in every way, The roof, plumbing and heat may fail, the surrounding area (and your stored cars) will be less safe.
Owner: This isn’t fair. I didn’t do anything wrong!
Dixie: You aren’t wrong, you just decided to own a much cheaper property. Your property tax burden underpins the overall quality and desirability in the local market, and you have decided to support only a property quite inferior to what you had.

After thinking about it, the owner decided to avoid the bitter pill.