How are residents taking the news of the region’s highest increase in real estate assessments released by the Falls Church City Hall last week? Is it good news, or bad news, and is it an accurate reflection of value here?
It depends on the infamous “eye of the beholder,” most might say. Three real estate agents interviewed by the News-Press and one prominent local developer rehearsed the upsides, the downsides, and some remaining questions, in particular regarding the valuation of the commercial components of the City’s real estate.
According to Bob Young of the Young Group, Inc., a recent appointee to the City’s Economic Development Authority, despite the 2.37 percent increase in the overall assessed value of the City’s commercial properties, the City may still be ‘leaving a lot of money on the table” by way of under-assessing the true value of some commercial properties.
By law, as City Manager Wyatt Shields reminded the F.C. City Council in unveiling the assessment data last week (with individual assessments being mailed to all property owners at the same time), F.C.’s Assessor Ryan Davis is required to provide assessments that are 100 percent of the market value of properties.
Still, according to Young, the City uses “mass assessment techniques” that are “generally accepted,” and while assessments of residential properties may be in line, there is a missing of the mark on commercial.
“I know what my properties are worth,” he told the News-Press, “and I know in some cases people pay considerably more than the market value for something. Still, that should be reflected in the overall assessments. The mass technique has got to be costing the City money.
“The City has the luxury of being small enough that almost every property could be individually assessed without resort to a ‘mass assessment technique,’” he said.
“It is like the IRS, where Congress has cut its budget to impact its ability to do audits and they can’t answer the phone,” Young added, “Even though it’s been shown that for every $1 spent on examinations, $6 is raised.”
Among many popular local real estate agents, Louise Molton, Stacy Hennessey and Tori McKinney all concurred in their views about residential assessments in the City, saying they appear to be very accurate.
“Historically, the City has been notorious for not having a close link between the selling price and the assessment of a home,” Hennessey said, but this year may be different. “Usually, the assessors don’t catch renovations and improvements to homes,” although she sensed assessments overall were “too high” last year.
Annual assessments are clearly a “double-edged sword,” said Molton, just back in town from a real estate conference in Las Vegas. “If you are looking to sell, higher assessments are a good thing. If you’re staying put, they just mean you’re paying more in taxes. It’s just human nature to be disgruntled by higher taxes, but people should realize that with 5.75 percent single-year jump in assessments of town houses, for example, they’re very lucky to live in the City.”
“People don’t like change and more taxes,” she said. “But they need to look at the other side of the coin.”
She said that property values “have been on an extremely good run,” with “great schools bringing people to the City.”
She noted that it’s most common for families coming to the D.C. Metro area to look online to see where the best schools are. “They want the best for their children, no matter what,” and when they see how highly rated the City of Falls Church schools are, they are drawn here.
Molton added that citizens need to be reminded that, while assessments and tax rates rise, the City’s programs of tax relief for seniors and disabled residents have become more robust. “I a lot of people still do not know about this,” she said.
McKinney agreed with the view that assessments this year are “in line with market values and accurate.”
“People don’t want taxes raised, but when values go up, so do assessments. They also have to respect the size of the community and its limited tax base.”