Putting A Price On A View: Another Tax On Homeowners?

I read with a great deal of interest a recent newspaper story about some California residents who were slapped with a "view tax" because of their proximity to the beach.

Officials in Port Hueneme, a small community just north of Los Angeles, were trying to balance their budget by tacking on additional property taxes of $66 to $184 a year, according to an Associated Press report. The tax amount was determined by the size of the house and how much of the sea the homeowner could see.

I could only imagine what would happen around here. With waterfront and view property so plentiful, a majority of the population would face a view tax. How would you like to pay an extra $100 because you live close to Carkeek Park? Or the baseball fields at Magnuson Park? Or the Armeni boat ramp in West Seattle?

Many local homeowners with views and waterfront already pay higher taxes than their neighbors who do not have those amenities. Comparable sales show their homes are worth more. The residents of Port Hueneme already face stiff taxes, too; the additional view tax was simply an attempt to generate tax money over and above an already high base.

The value of a view will always be what someone will pay for it. It can be foreground, middle ground or background. It's similar to a house, or a painting. You can establish a market value by recent sales, but people often will pay more or less than the established price.

A few years ago, Burnell Thorley, a real estate appraiser, tried to determine the view value of a vacant lot for a master's thesis in regional planning from the University of Washington's Department of Landscape Architecture.

Thorley compiled statistics on 94 lots in large subdivisions in Bellevue, Federal Way and Mukilteo. By considering 14 variables, including the date of sale, shape, square footage, location, water and degree of view, he tried to arrive at the value of the view. In many cases, the view was worth more than 50 percent of the selling price of the lot.

Jim Hebert, the Bellevue-based statistics specialist whose company, Hebert Research, conducts surveys in every area of growth and planning, has a customized rating system for view property.

Hebert assigns view property numbers from 1 to 10 depending on what, where and how much can be seen. A 10 would be a 360-degree view that includes freshwater, saltwater, Seattle skyline, Mount Rainier and the Olympics. If the average lot in the area is selling for $40,000, an optimal 10 lot could sell for as much as $400,000 ($40,000 times 10). A view lot assigned a 6 could sell for as much as $240,000.

"Views in this market have become critical," Hebert said. "This is not an ordinary place to live, and people coming here are demanding simply more than the ordinary."

Hebert's data shows that southwesterly views are the most popular and that more and more buyers are seeking some sort of peek at the Seattle skyline.

I'm in no hurry to establish a price tag on views, even though such inaction could keep us out of step with more upscale sections of the country.

It reminds me of the time we were living in West Seattle with a knockout view of the ferry lanes, Olympics and Puget Sound. A Southern California broker attending the same real estate conference I was asked me what "type" of view I had. "Gorgeous," I responded.

The broker looked at me as if I had just arrived from the moon. You see, in beach cities, properties often are priced by the type of water in the view. A "white-water view" (waves crashing, white-water foam) is much more expensive than a "blue water view" (one with no coastline). If you can barely make out water in the distance, it's called a "horizon" view.

After this was explained to me, I said, "I guess I have a blue water and horizon view. We rarely have waves on Puget Sound."

The broker responded, "Oh, really. Why's that?"

Tom Kelly is a private real-estate consultant. His column runs Sundays in the Home/Real Estate section of The Times. Send questions and comments to Tom Kelly, P.O. Box 70, Seattle, WA, 98111.