(Georgia Institute of Technology, 2023-05)
Knight-Scott, Ethan
Property taxation forms a pillar in the U.S. system of public spending, but policymakers in Georgia have expressed increasing concern that commercial properties are being under
appraised. Underappraisal would lead to a loss of government revenue to spend on public projects and social well-being. To analyze the extent of underappraisal, I use a dataset collected by Georgia Tech’s Urban Research Group from CoStar of 2,015 properties appraised in Fulton County, Georgia between 2015 – 2020. I find that the median commercial property is appraised for nearly half – 57% – of what the property eventually sells for. After running a series of one way ANOVA tests, I conclude that property use and property value are significant potential determinants of commercial property underappraisal. Time-related variables are also significant, suggesting a need to better control for underlying economic and financial changes in a future regression model.