Terra Malmstrom couldn’t believe her eyes. The postcard she received from the Ouray County Assessor’s Office said her off-grid 1,500-square-foot Earthship home was now 2,500 square feet and $200,000 more valuable than her last assessment. She described her reaction as “shock and awe.”

The appraiser she spoke with during her protest hearing explained a list of reasons for the increase.

Assessors now measure homes from outside corner to outside corner instead of livable space, and th...