Fellows in Focus: Designing a New Approach to Property Tax Appraisals

The Lincoln Institute provides a variety of early- and mid-career fellowship opportunities for researchers. In this series, we follow up with our fellows to learn more about their work.

Determining the value of property is a complex and often controversial job, but new tools are making it easier for appraisers to ensure the fairness of their work. Those tools include an approach developed by Paul Bidanset, a doctoral candidate at Ulster University in the United Kingdom and former C. Lowell Harriss Dissertation Fellow. The fellowship, named for a longtime Lincoln Institute of Land Policy board member and Columbia University economics professor, assists PhD students whose research complements the Lincoln Institute’s interests in land and tax policy. As founder and research scientist at the nonprofit Center for Appraisal Research and Technology, Bidanset has now advised officials from the United Kingdom to Moldova. He described his efforts to help democratize and modernize the appraisal field in this interview, which has been edited and condensed for clarity.

JON GOREY: What is the focus of your work, and how did your fellowship help advance that research?

PAUL BIDANSET: I came from a data science background, where I was forecasting anything people wanted—forecasting revenues based on advertising expenditures, forecasting pass-fail rates based on number of hours studied—anything where you could put in some inputs and try to forecast an output. That led into predictive algorithms for appraising property, specifically for property taxes—looking at recent sales and creating models that would estimate how much certain property characteristics determine what a property would sell for, then using those to appraise all the properties within a jurisdiction, so the government can tax them based on their market value.

There’s a quality control that we do in this industry that tests how accurate those models are, and not only if they’re accurate, but if we’re being consistently accurate across all properties. Are we being consistent? Are we being fair? Are we being equitable? A lot of research I do goes into making these predictive models more accurate and more consistent for taxpayers.

In this dissertation, I took an algorithm that was already being used in the industry that brought in a lot of really granular location data, so it’s much more sensitive to local fluctuations across neighborhoods and even within neighborhoods, and I modified it to not only be more accurate with regard to location, but also to the current time of the market. So making sure that old sales, for example, if they happened before COVID, weren’t counted the same way as recent sales.

The research is all done, and all the algorithms were actually improved as far as government standards and property tax standards and governing documents are concerned. I don’t like to brag, but the valuation oversight authority in the UK actually took this algorithm and used it to revalue properties in Wales. So it was cool to see this research taken out and actually used.

JG: What are you working on now, and what are you interested in working on next?

PB: I founded a think tank, it’s a 501(c)(3) called the Center for Appraisal Research and Technology. I’ve been working in Moldova, and in Romania currently; I’ve done some work in Estonia and Ukraine, and I’m starting to work in Asia as well with the Asian Development Bank and the World Bank. A lot of the stuff that I’m teaching or working with them on is more basic modeling and technology, so it’s not directly tied to my thesis or my dissertation, but I think it is a result of my experience in the doctoral program.

And recently our nonprofit partnered with the Lincoln Institute to create this vertical equity app dashboard that governments can use. So when they’re done with their valuations, they can upload their spreadsheets . . . to test to make sure that taxes are fair across those price points. You upload it, you click a couple buttons, and you get this nice generated report that breaks things down for you very simply. We’re looking to get that type of help in the hands of governments all around the world.

JG: What’s the most surprising thing you’ve learned in your research?

PB: I think the most interesting thing to me is it doesn’t matter where you are, the issues and questions are the same. I started in Norfolk, Virginia, working in a government office, that’s where I cut my teeth in this industry. But [there is] continuity from Norfolk, Virginia, to Chişinău, Moldova, to post-Soviet countries, to developing countries in Asia—it’s amazing how similar it all is, when you’re talking about relationships between the government and taxpayers, limited budgets, outdated software, staff being spread too thin. Even the questions that the taxpayers have when they come in, their questions, their protests—I mean, it’s copy and paste. It’s fascinating.

JG: What do you wish more people knew about the appraisal industry?

PB: I wish people knew how much people in local government—at least the governments that we work with—care, and how much they actually do. Because I don’t think people realize that. I used to work for a different nonprofit and when I tell people that we would host conferences where government practitioners would come to learn how to get better at valuing properties and do things more equitably, they’re like, ‘Governments [care] about that? I just thought they threw a dart at the highest number they could get away with.’ I think if people just knew how much your average government assessor cares, how much work goes into this, how much due diligence and continuing education and hard work . . . the majority of them are really trying hard to get better at this and do a good job for the community.

JG: When it comes to your work, what keeps you up at night? And what gives you hope?

PB: Something that keeps me up would be just how much people ignore good statistics and research. It’s very convenient and easy for people to just dismiss something because it doesn’t jibe with their preconceived notions.

Something that gives me hope? I would say the open source ethos. We don’t want to foster a consultancy dependence, we want to empower these countries with limited resources. So in Moldova, for example, we were teaching them how to use free open source software that they don’t have to pay for, and really put the power in their hands, which is going to help them hopefully develop faster and comprehensively across the entire country.

JG: What’s the best book you’ve read lately, or best show you’ve streamed?

PB: As far as shows go, Silicon Valley. I’m a huge Mike Judge fan. The book that I’m reading now is by Nassim Nicholas Taleb, it’s called Fooled By Randomness. He talks a lot about financial markets, but it’s really just a very pragmatic way to look at statistics and make sure we’re not drawing the wrong conclusions or putting false hope in certain things, which I think is massive when it comes to vertical equity and ratio studies. We’ve got to make sure that we’re not drawing false conclusions and thinking we’re good when we’re not, or vice versa. Because it’s a tough job as it is—we don’t need any more confusion.

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Jon Gorey is a staff writer at the Lincoln Institute of Land Policy.

Lead image: Paul Bidanset in Beirut, Lebanon. Bidanset traveled to the city for a project with the Lincoln Institute and Beirut Urban Lab. Credit: Courtesy photo.