Greek chapters at the University Nebraska–Lincoln saw their building values jump nearly $1.2 million on average in one year, according to data from the Lancaster County Assessor’s Office.
“It was sticker shock,” said Assistant Director of Fraternity and Sorority Life Jon Gayer. “Some of these groups are probably looking at a $100,000 increase in taxes.”
The jump comes after the Lancaster County Assessor’s Office reassessed Greek house values after they hadn’t changed during the pandemic. And this time, the office looked at how houses were valued near other Big Ten campuses.
Farmhouse Fraternity saw the largest increase out of all the Greek chapters. Their valuation in 2022 was $250,300, but that didn’t account for a complete remodeling of the house.
Now, their new valuation is $7,241,100.
Alpha Xi Delta’s valuation on their property increased 534%. Their building value rose the most out of sororities, according assessor data.
Lancaster County Assessor Dan Nolte was not in office until this year, but he said COVID and the housing market during the pandemic years may have led to the lack of change in building valuations.
“We are tasked by statute with valuing property as close to market value as we can,” Nolte said.
There are 17 fraternities and 12 sororities with chapter houses on or near UNL campuses.
Most men and women part of the designated house will live in the facility during their college years. Some houses have designated sleeping rooms where the beds are and others have individual rooms shared with roommates. Chapters eat meals and host meetings and events at their house.
Greek chapters were caught off guard by the increase, especially because they had not seen a major change in property value in recent years, Gayer said.
Greek buildings are a subgroup of property and do not get assessed every year. Chapter buildings at UNL had not been since 2015. The Assessor’s Office began looking at re-evaluating the facilities after receiving calls about Greek chapter building values not being accurate and other “equalization concerns.” There were also a few building sales and new construction that indicated there was a valuation issue, said Phil Hughes from the Lancaster County Assessor’s Office.
“Everything is treated the same,” Nolte said. “The goal would be similar-sized properties would be at the same rate because that is only fair to you and your neighbor.”
The five Greek houses that had the highest percent increase
How the Lancaster County Assessor’s Office evaluated the houses
Property values increase for a variety of reasons, but the Greek chapters saw a 293.21% average increase because of renovations and the current housing market, Hughes said.
“We need to value property, real estate, as close to market value as we can,” Nolte said.
Statute requires property to be valued at 100% market value, and there are three approaches: sales, income and cost. The sales approach compares properties that are similar and looks at what they were sold for. This method could not be used because Greek chapter houses are not sold often, and they are hard to compare to similar-sized properties. The income approach is used with most commercial properties and determines the value of the building based on the amount of money brought in. Since Greek chapters are 501(c)(3)’s they don’t have an income to look at.
“Most of them operate in the red or very, very near in the red,” Hughes said.
The Lancaster County Assessor’s Office used a cost approach, which looks at cost tables produced by a national company, Marshall and Swift, to determine the worth of the property. These cost tables determine values based on replacement costs for square footage, materials used and quality of materials, and more Hughes said.
When beginning to assess the property, the Assessor’s Office said they did on-site inspections of the outside of all the chapters and inside most of them. They noted updates and areas with deferred maintenance. From these notes, they looked at the cost tables and had a number.
“Every time we re-value, we start completely over with new sales data. We don’t base any of our new values off prior data,” said Lancaster County Appraisal Operations Manager Alice Lauer. “It is all new market data, all new income data, all new cost and depreciation data. The old data is there, but we don’t look at it and apply a certain percentage.”
To ensure the numbers “logically aligned,” the office said they looked at Greek properties at the universities of Iowa and Wisconsin to compare. They chose campuses in these states because they were similar to Lincoln and in the Midwest, assessed at full market value and had information available online. The office did not base their numbers off the comparisons, said Hughes.
“If they value something at $10 million that we value at $100,000 that just would not be logical,” Hughes said. “We looked to make sure more or less trended up on a square foot basis.”
“There is less of a concern that our value is wrong and more of a concern of the increase of value and what it does with their budgets. Though we certainly empathize and sympathize with the position it puts them in. If the levies don’t change and the tax rate increases, that is a large increase in tax burden, but we have to follow the state statute.”
Theta Xi Fraternity Alumni Association Treasurer Brent Ganey said he doesn’t think the valuations are entirely wrong. However, Greek houses being taxed as real property at 100% market value is not fair because of their unique purposes.
“I don’t look at the Greek houses any differently than I look at my neighbors who are experiencing increases as well,” Nolte said.
The Impact of Sigma Chi, Theta Xi and beyond
As valuations increase, so do property taxes. This will impact budgets and cost of living in a Greek house. Chapters will have to pay the expense through an increase in rent or changing budgets.
Blake Welker is a junior at the University of Nebraska-Lincoln and was the president of Sigma Chi from April 2022 to 2023. Their chapter’s value increased over a half million dollars. He said Sigma Chi has around 100 members, so they will be able to manage the increase better than smaller chapters, but the increase still impacts them.
“It does take away from things we can do. If we want to do something philanthropically or have some sort of formal that’s out of town, it does take away from us from that point,” Welker said. “It is not to the point that we can't run the house.”
Sigma Chi tries to stay 6% under the cost of on-campus living at the University of Nebraska, but the increase in dues could cause that benefit to members to not be possible.
Gayer said he doesn’t think it will necessarily affect recruitment numbers, but it may affect which chapter students choose because students coming in are looking at cost and value more.
“I don’t want it to turn into 'if you don’t have 120 guys, you are done.' I don’t think that’s fair," Welker said. “In Greek life, there is a variety of different temperaments, talents and convictions you can have in houses. It could turn into a more preferential treatment to a certain group of people.”
Theta Xi Fraternity has about 80 members. Their alumni board is working with the Lancaster County Assessor’s Office, but their executive team is keeping the chapter informed, said President of Theta Xi Fraternity Benjamin Morse.
“A lot of people are like, ‘Hey, if this does happen, I’d have to drop. I won’t be able to afford it. Can we figure something out?’” Morse said.
If the fraternity pays more in taxes, their cost of living would increase and their budgets would change. They would have less money to put into brotherhood and community service events. Theta Xi could still put on events, but they would be significantly smaller and lower quality, so the increase hurts the house and the Lincoln community, Morse said.
“We are just a bunch of college kids,” Morse said. “It’s already hard for college kids to afford these dues and afford to live in a fraternity or sorority. With these increases, it will deter people from wanting to.”
When these valuations were released, a number of chapters called the Office for Sorority and Fraternity Life. The office organized a meeting with the Lancaster County Assessor's Office where chapter presidents, advisors and friends were invited to come and ask questions. At the meeting, chapter representatives asked questions directly to representatives, Gayer said.
The assessments will not change through conversations with the Lancaster County Assessor, but chapters are able to file an appeal between June 1 and 30. Chapters can submit a formal protest in June through the County Clerk’s Office and have a hearing with a third-party private appraisal.
“We are totally out of it at this point,” Nolte said.
Chapter advisors and alumni boards are working to put together appeals explaining why their value should be lowered for their individual chapters. Chapters will be using a variety of different arguments in the appeal including some being university approved houses and or historic landmarks and the purpose of their chapter, Gayer said. Welker said their advisors are encouraging them to speak to the new chancellor about the issue as soon as the person is named.
Gayer said he asked if the chapters could file a joint appeal and was told “no.” Nolte said this is because each property is separate.
“There are some compromises and some agreements that can come from this (appeal process) that signify what these facilities are used for,” said Gayer.
The Lancaster County Board of Equalization will make a decision on all appeals by August 10. After that decision, chapters could appeal to the Nebraska Tax Equalization Review Commission, said Nolte. If the chapters continue to appeal, they would eventually be heard by the Nebraska Supreme Court, Gayer said.
“I think we lose sight that these are for the most part student housing,” Gayer said. “You can't flip this overnight to be an apartment complex. You can’t. They collect rent nine months of the year. Only members can be there. Only a certain sex, depending on the fraternity or sorority tenants, can live in that facility.”