Suit alleges city illegally inflated home values

The city of Minneapolis is defending its property tax assessment system after a new lawsuit alleged the city inflated property values in some neighborhoods an average of 50 percent above what owners paid for the properties in the previous year.

Attorneys who filed the lawsuit say they have found disparities between property assessments in some lower income neighborhoods - Camden and Near North in North Minneapolis and Phlilips in South Minneapolis - when compared to assessments in more affluent neighborhoods.

The Minneapolis City Attorney Susan Segal said the city's methodology is sound and the city disputes the lawsuit's allegations.

"What we do know is that state law dictates which sales data that our assessor should look at in doing their property valuations and that is what our city assessor has used," Segal said.

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The lawsuit asks the city to reassess property values for thousands of homes. Attorney David Wilson said the inflated assessments don't reflect the true market value of the homes.

"It's not just that people are being asked to pay higher taxes. We understand that no one enjoys that and that is a consequence of living in a city that is running out of money," Wilson said. "Our goal is to make sure that at least the tax burden is shared equally across the city in proportion to the value of your home and that is not happening"

Wilson said they are seeking class action status for the case.

The Minneapolis City Attorney said the city stands by its assessment methodology.