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Land appraisals move closer to City of Missoula authority under new ordinance

Who sets the fair market value of undeveloped land and how the process works is at stake in the debate.

Members of the Missoula City Council this week placed their unanimous support behind a proposal to shift the appraisal of undeveloped land from developers and place it under the responsibility of the city.

While the outcome of the appraisal could benefit the city by funding its cash-in-lieu of parkland program, city officials say the process will be more transparent – something they contend is lacking under the current system.

“We have two private entities, a subdivider and appraiser contracting with one another under the current system, and we’re arguing there’s no transparency there,” said city planner Grant Carlton.

The measure has bounced around government boards and committees for several weeks now, starting with the planning board, which voted against the changes on a 5-4 vote. Opponents labeled it as a “power grab” by the city that could give it more power to set land values.

After more deliberation, however, City Council members appear satisfied with the language changes and the intent of the ordinance, especially as it pertains to the procurement process, or the method the city will use to hire appraisers.

That includes language around appraisal fees, transparency, maintaining a pool of appraisers, and ensuring the timeline for an appraisal isn’t needlessly extended under the weight of city processes. The measure won’t impact zoning designations either, Carlton said.

“There is no material change proposed as part of this language,” he said. “We’re simply clarifying language that was a bit ambiguous in current subdivision regulations.”

The number of subdivision applications in Missoula have grown with the rising demand for housing. Depending on their size, those subdivisions are either required to dedicated 11% of their property to parkland, or donate a “cash-in-lieu” of parkland payment to the city.

That “cash-in-lieu” payment lies at the heart of the changes. The payment is set by the fair-market appraisal of the undeveloped parcel. Currently, it’s up to the developer to contract an appraiser to gage that value.

But the city contends the process has yielded wide values with no predictability. In the end, it contends, the range of values takes cash away from the city’s goals around parks and trails. Placing appraisals under the city’s responsibility is expected to resolve the disparities and render a more predictable outcome, Carlton said.

“This is a more predictable, clear and efficient process,” Carlton said. “We’ve seen such a broad range of fair market values among appraisals, anywhere from $2 to $12 a square foot over a short span.”

While the measure was sent to the full council for a vote on Monday, some remained skeptical over the changes. Appraising a vacant piece of ground that hasn’t been subdivided is different than appraising a home during a sales transaction.

“That’s a different thing than looking at a bare piece of ground and putting a value on it,” said council member Julie Merritt. “We’re still talking about the same pool of appraisers who have done these in the past that have given us those big discrepancies.”

Carlton said it remains unknown how many appraisers the city’s request for proposals would yield as it works to build a qualified pool. He said “a few” appraisers have already offered to be part of the process.

“We have heard from some,” he said. “We certainly continue to reach out to them. I can’t speculate on how many will be interested.”

City wants control of appraiser contracts in parkland pricing for new development