In Mecklenburg, 10% of all revaluation appeals came from just one corporate landlord

Among the 23,000 property revaluation appeals sent to Mecklenburg County this year is a name that appears again and again.

Charlotte attorney Lawrence Shaheen shows up in the appeals some 2,400 times, county data show. His main client, the publicly traded corporate landlord American Homes 4 Rent, is responsible for about 10% of all revaluation challenges in the county.

Revaluation — conducted once every four years — is one of the main factors used by local governments to help set the tax rates that go into determining your property tax bill.

In recent years, more and more single-family homes assessed by county staff are owned by corporate landlords.

These companies operate on a much larger scale than local firms and mom-and-pop landlords. In fact, such companies have amassed tens of thousands of homes in North Carolina, according to Security for Sale, a months-long investigation by The Charlotte Observer and The News & Observer published last year.

And those homes are especially concentrated in Charlotte and Raleigh.

With piles of cash, big investors become NC’s top rental-home landlords

A byproduct of corporate landlords

County officials were not completely caught off guard by the large number of appeals filed by American Homes 4 Rent.

The company was also the largest single filer of appeals in the last property revaluation, Mecklenburg County Assessor Ken Joyner told the Observer.

“We were expecting that from them,” he said.

The fact that the county saw more than 2,000 appeals from one property owner is a byproduct of corporations buying up large numbers of homes across North Carolina, Joyner said.

Shaheen told the Observer his client declined to comment about its appeals.

An Observer analysis found American Homes 4 Rent owns at least 2,365, properties in Mecklenburg County. Many of those sites are spread throughout neighborhoods in a crescent around Charlotte’s center city, from Steele Creek in the southwest to Interstate 485 in the north and The Plaza in the east.

The company is one of about 20 firms that purchased at least 40,000 single-family properties in North Carolina through early last year, according to the Security for Sale series.

The industry is meeting a demand and providing people with another option — in this case renting a home — David Howard, executive director of the National Rental Home Council, previously told the Observer. The council is the trade association that represents some of the largest corporate single-family rental firms in the country.

But tenants have complained about slow and shoddy maintenance, steadily rising rents and fees that wring profit from them. Meanwhile, would-be homebuyers have a tough time competing in the market against the industry’s well-funded machinery.

Reason for the reval appeal

The median value of real estate in Mecklenburg County increased about 51% since 2019, Joyner previously told the Observer. That includes a 58% increase for all residential properties and 41% for commercial parcels.

On average, the value of properties owned by American Homes 4 Rent increased about 68% since 2019, the Observer found. But some properties saw their values jump 500%, records show.

In its appeals, the company is arguing the properties it owns should be valued based on an income approach, according to Joyner. That method essentially values a home based on the amount of income it can generate.

Joyner said American Homes 4 Rent used the same argument in 2019, but ultimately lost its appeals bid.

Mecklenburg officials use a sales comparison method, meaning the county looks at recent neighborhood sales data to determine a fair market value of a home as of this year.

Homes are appraised as if the property was going to sell on the market on a given date. If American Homes 4 Rent decided to one day sell its homes, would-be buyers would be competing against other single-family homeowners, Joyner said.

Essentially, Joyner said, the use of the property is the same whether it’s owned by a large corporation or an individual.

“You can’t look at an American Homes 4 Rent home and one next door owned by someone else and see a difference,” he said.

No decision yet on American Homes 4 Rent

The county has not ruled yet on American Homes 4 Rent’s 2023 appeals. But Joyner said the volume from the company is not gumming up the works in the assessor’s office.

In 2019, the county assigned one staffer to handle all of the company’s appeals.

And both the county and American Homes 4 Rent decided to handle all individual appeals as one case instead of hundreds that year, Joyner said. The same approach could be used this year, as well.

Raleigh News & Observer reporter Tyler Dukes contributed.