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Oklahoma County Board of Equalization hears appeals over valuations of three Section 42 housing projects
Summary
At a May 26 special meeting, the Oklahoma County Board of Equalization heard appeals from owners of three Section 42 (low‑income) properties — North Point, Cross Creek and Red Cedar Village — whose requested valuations were substantially lower than the county assessor’s reworked market estimates; the board will set values at a Friday meeting.
The Oklahoma County Board of Equalization on May 26, 2026 heard appeals from representatives of three Section 42 low‑income housing projects — North Point, Cross Creek and Red Cedar Village — seeking lower fair‑market values. The county assessor told the board he had reworked the files using normalized market inputs and indicated he would recommend no change in at least two of the three accounts, leaving a significant gap between owners’ requested figures and the assessor’s valuations. The board said it will meet Friday to determine final fair‑market values and will notify appellants in writing next week.
The appeals centered on different inputs to the income‑cap approach used by both sides: owners submitted audited profit‑and‑loss statements, rent rolls and management data showing lower recent NOI and higher expense ratios; the county assessor said he must normalize expenses and vacancy to reflect the market when setting market value.
At the first hearing, BOE case 143 (North Point, account R1134440550 at 11800 Northwestern) owners described the property as a 2022 Section 42 project and reported a 2025 occupancy near 79.3 percent. Representatives applied a loaded capitalization rate of about 7.34 percent, capitalized a projected NOI and requested a value of roughly $14.1 million. The assessor, presenting for the Assessor’s Office, said reworking the file with a lease‑up allowance and market vacancy produced a valuation near $16.17 million and said, "As of now I would be in a no change on this one," signaling the assessor’s current position.
In BOE case 144 (Cross Creek, account R14312995), owners described the property as a 44‑unit senior restricted Section 42 building with a 2025 actual NOI near $60,000 and a stabilized NOI assumption of about $123,000; they requested a valuation of $1,595,000. The assessor said he normalized the inputs to typical Section 42 market expectations and offered a reworked value of about $3.41 million. Board members and representatives focused discussion on the differing vacancy and expense assumptions driving that spread.
For BOE case 145 (Red Cedar Village, account R21099000), a 40‑unit senior Section 42 property built in 2012, owners requested $1,335,300 and provided audited financials showing NOI declines over three years. The assessor reported a normalized valuation of $2,958,700 (above the county’s current valuation), saying he used market‑consistent expense and vacancy rates; he noted a 10 percent downward sensitivity still left his estimate well above the owners’ number. Owners’ counsel (Tim) pointed the board to audited schedules in the packet and urged the board to consider actuals: "page 13 of our packet is the pro forma loss for ’24 and ’25. These have been audited by [their CPA]," he said, asserting those audited figures reflect real operating performance.
A central point of contention was expense ratios. Owners argued audited, entity‑level expense levels and tenant characteristics (especially for senior properties) produce higher expense ratios that should be reflected in market value calculations. The assessor countered that using actuals without normalization would produce inconsistent results across properties — for example, rewarding a single manager’s unusually low expenses while penalizing others — and that market‑based normalization is required to capture fair‑market value. Participants explained that Section 42 senior properties incur specialized compliance, annual CPA audits, and restrictions under land‑use restriction agreements (LURAs) that limit rents (and therefore compress NOI) while maintaining higher operational and compliance costs.
No final values were set at the May 26 hearing. The board said it will reconvene Friday to vote on fair‑market values and will notify appellants by email and written notice early next week. The meeting adjourned after a voice vote.
What happens next: the board will meet Friday to set fair‑market values for the three appealed accounts. Participants should expect written notice of the board’s determinations on Monday or Tuesday following that meeting.
