“There’s been a lot of talk about the income letters I’ve sent out. If you’re an owner-occupied business, all you have to do is write ‘owner-occupied’ on the paperwork and send it back to me and you’ll never get another letter,” he said. “It’s not required. If you want to ignore it, feel free to ignore it. It’s just another approach I’m trying.”

He added that the income-based method of valuation is usually only used when a property owner files a lawsuit against the assessor’s office, but it is an appropriate tool when there have been no recent comparable sales.

Bill Hobson, a resident of rural Marshalltown in attendance, had several questions for Wurr, including how many other counties use such a system – Linn, Johnson and Polk were some examples the reviewer cited.

“I think there are some districts that are sending out information, but not enough data has been collected to be able to use it,” Wurr said.

ATTACHED PHOTO – A photo of the letter sent to property owners in Marshall County.

Hobson asked if a new law would be needed to change the assessment formula from market value to a rental income-based system, and Wurr responded that county assessors across the state already use three different approaches – sales, cost and income approaches.

“For brand new properties, we typically build using the cost approach and then as sales occur, adjust our prices accordingly. But if there are no sales for a particular type of property or something like that, the revenue could be another base that can be built up and that usually benefits the taxpayer if sales don’t happen,” he said.

The income process is also used internationally and in other states, and Wurr said both sides typically use it when an assessment is contested in court. Asked further by Hobson which businesses received the letter, Wurr said it was sent to golf courses, gas stations, hotels and motels, mobile home parks, retail stores, apartments, condominiums and duplexes.

Ultimately, however, Wurr admitted that due to the lack of responses, he was unlikely to be able to obtain any usable data from the letters.

“Are you saying we shouldn’t do it?” asked Hobson.

“If you want, you can. If you don’t want to, you don’t have to,” Wurr replied.

Hobson pointed to a section of the letter that cites a specific section of Iowa Code, 441.24, which “requires the property owner to assist the appraiser in the appraisal of his property,” but Wurr said he would “not follow the other half of the code.”

“If I have two identical buildings next to each other and I operate a business in one and rent out the other, how would you value them?” asked Hobson.

Wurr responded that if enough data was available, he could create market rents and capitalization rates and do everything “as a whole,” but if there were sales, Iowa was a sales state and he had to go that route. Hobson noted that filling out the forms would be a lot of work for property owners, and Wurr reiterated that it was optional.

Board Chairman Jarret Heil said he and his colleagues had received mail from several residents about the letters and he believed the voluntary implementation was a “win-win situation” because the income approach could actually be beneficial to the property owner in some cases.

“It’s great that they don’t have to fill it out, and I think that for a lot of people who have reached out to us, knowing that will be enough,” Heil said.

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Contact Robert Maharry at 641-753-6611 ext. 255 or

[email protected]