The value of homes in Arlington County has soared during the pandemic.
Residential property values in Arlington are up 5.6%, while commercial property values slumped 1.4% from last year, according to newly-released stats. Arlington County is starting the process of mailing the new assessments out to homeowners and commercial property owners.
“Arlington’s overall property tax base grew modestly from last year due to continued residential growth despite a slowdown in some commercial sectors due to the impacts of the COVID-19 pandemic,” the county is saying in a letter to property owners. “Property values increased 2.2% overall in Calendar Year (CY) 2021 compared to 4.6% growth in CY 2020. New construction contributed to 1% of the 2.2 % overall property assessment growth.”
The sharp rise in residential property assessments shows “the continued attractiveness of our Arlington community, even as our businesses and residents face the burdens and challenges brought by the COVID-19 pandemic,” said County Manager Mark Schwartz. The average value of existing residential properties is now $724,400, up from $658,600 two years ago.
The average value of hotels, meanwhile, plummeted amid the pandemic, while apartment and office buildings increased in value — with the latter propped up by the arrival of Amazon.
“Overall commercial property assessments decreased by 1.4% over the previous year, mainly driven by a double-digit decrease in the hotel sector where operations have been significantly impacted by the COVID-19 pandemic,” the county said. “Apartment and general commercial (malls, retail stores, gas stations, commercial condos, etc.) property values saw small decreases offset by new construction. After strong growth in CY 2020, apartment property assessments increased by 0.8% overall in CY 2021. General commercial property assessments increased by 0.1% overall.”
“While many office property assessments decreased due to increases in vacancy rates and changing demand for office space, total office property values increased by 0.8% over last year,” the county added. “The overall office market tax base increased, in part, due to the increased presence of Amazon and the related development activity.”
Last year, assessments rose 4.6% on average — 4.9% for commercial properties and 4.3% for residential properties. The big rise in 2021 residential assessments will likely result in another effective tax hike for homeowners.
Last year, Arlington’s property tax rate — $1.026 per $100 in assessed value — was held steady despite the higher property values. This year, budget pressures brought on by the pandemic have prompted the county to warn of the likelihood of both budget cuts and tax rate hikes.
The height of Arlington’s budget season is set to kick off on Feb. 20, with the release of the County Manager’s proposed Fiscal Year 2022 budget. The final budget is expected to be adopted on April 17. The county’s new fiscal year begins July 1.
“The County continues to feel the economic impacts on local revenues, including the slowdown in sales, meals and hotel taxes, as well as cost increases and additional costs related to the pandemic,” the county said in a press release today. “The projected budget shortfall remains at more than $40 million, excluding the needs of the Arlington Public Schools (APS).”