Assessments of properties along Cougar Creek this year have seen 10 to 30 per cent reductions in the value of land and buildings.
Assessment values dropped as a result of being re-evaluated after last June’s flood, which affected 120 properties along the mountain creek.
Assessor Frank Watson explained the method by which the properties were reassessed came out of meetings with other municipal assessors from flood-affected communities in Alberta.
“Just after the flood in July, a number of assessors in Alberta for municipalities that got flooded knew that we were going to have an evaluation issue at the end of the year,” Watson said. “We came to the conclusion that yes, there has been loss of value.
“The range being talked about in the City of Calgary and surrounding areas was that an adjustment anywhere from five to 20 per cent of the assessed value was going to be the amount that was going to be reduced on a go forward basis.”
Assessments are based on value of the land and buildings on it. The value represents the typical real estate market conditions as of July 31 and the physical condition of the property as of Dec. 31.
Homes along Cougar Creek were assessed into categories of: eroded backyard and major structural issues; eroded backyard and foundation or other structural issues; eroded backyard, but minor damage to decks; some minor erosion and no damage to the home.
Watson said all 120 properties affected saw a 15 per cent reduction in the assessed value of land. Homes with the most damage saw a range of 30 to 50 per cent reduction on the buildings depending on the per cent reconstructed. Subsequent categories saw 20, 15 and 10 per cent reductions to the value of buildings representing the extent of the damage.
“Homes without damage, but on the creek, had 10 per cent reductions,” he said. “The reason for that is there were a couple of (home) sales on the creek that were not damaged, the water didn’t reach them, and that is sort of the range of the sale price.”
Watson said he will look to the marketplace for guidance on prices, and he expects building and land assessments to return to pre-flood values.
Cougar Creek homeowner and local mortgage broker Garth Lyon said future assessment values are dependent upon ongoing long-term mitigations on Cougar Creek.
“My only concern is we need to maintain that debris net going forward. It is great that they are repairing everything today, but that is the easy part. Every year that is going to have to be repaired and unless there is funds budgeted for that and it is done, then no, the value won’t come back,” Lyon said.
“I think there is a stigma attached to those properties now and without the comfort of knowing that it is being taken care of in the long run, then the houses will never return to what they could have been otherwise.”
He said ongoing mitigation is also important for the confidence of mortgage lenders, which also affects property values in the real estate market.
“Lenders are skeptical of lending on the creek, so when you have restrictions on financing, and not as many options, the values decrease.”
