BVSCA's April 18, 1998, E-mail to Christopher Zimmerman, Chairman, Arlington County Board

Subject: Exemption for Renovated Parcels

Dear Chairman Zimmerman:

Unfortunately, I arrived too late to testify at the County Board Meeting today on Agenda Item 12, Approve the Five-Year Consolidated Plan for FY 1999-2003. I was delayed while trying to photocopy two sets of documents for you, other members of the Board, and the County Manager (Acting). I gave this information to the Clerk of the County Board, Ms. Sabra Jones, after she commented that Agenda Item 12 had already started and the rules would not allow me to speak. I said okay, and I understand, but asked her to please provide the two sets of documents to you.

I would like to briefly summarize this information. The first document is the BVSCA 1997 Neighborhood Survey Results, which reflect an increased concern about parking and traffic in our neighborhood from the past four years of annual survey. Our community is most concerned about the lack of "on-street" parking in our neighborhood with 72.6% of the 70 respondents indicating that it is a problem or critical problem (See item 2.b.). Under Item 7.b., 89.4% of the respondents indicated "yes" in support of the County establishing Visitor Parking Requirements for Residential High-Rises and Townhouses. On behalf of the Association, I would appreciate the County providing increased consideration for this most troubling problem in our neighborhood.

Had I testified today, I would have thanked the Board for their vote this morning to limit the real estate tax rate increase to only $.012. For increased perspective about the BVSCA 1997 Survey Results ("www.bvsca.org/survey97.html"), I had planned to state that only 33.9% of the 70 survey respondents indicated that real estate taxes in Arlington County were a "problem" or "critical problem" and conversely, 66.1% of the respondents said that it was "not a problem" or a "slight problem" (See Item 3a.).

What is a problem to BVSCA members is the County's continued emphasis on subsidized rental housing with 57.4% of the survey respondents indicating that they would like to see "less" spending on this activity. Only 8.2% would like to see "more" spending and 34.4% would like to see "no change" in the spending (See Item 6.c.). Along the same lines, 72.9% of the 70 respondents said "no" to the County's Goal of 10% of Rental Housing to be Subsidized by Year 2000 (See Item 7.r.), 67.7% said "no" to proposed Single Room Occupancy Units or Group Homes (See Item 7.e.), and 67.2% said "no" to a proposed Day-Time Drop-In Homeless Shelter-In Our Neighborhood (See Item 7.g.).

The second document I provided to Sabra Jones is my research on the Commonwealth of Virginia's jurisdictions' implementation of the state approved program for partially exempting certain rehabilitated, renovated or replacement structures. As you may recall when I testified last year at the April 12, 1997, County Board meeting, Agenda Item 8b. Draft Consolidated Plan for FY 1998, I briefly described Chesterfield County's creative initiative to provide tax exemptions for improvements to properties for a period of up to eight years if parcel owners fix up homes that are 25 years or older. Also, I encouraged the County Board to consider such initiatives to increase the supply of quality affordable housing in Arlington.

At the April 1998 Arlington County Civic Federation Meeting, we discussed the draft Consolidated Plan and Infill Development issues affecting the County. As a Delegate to the Civic Federation, I inquired of Staff what action(s) Arlington County had taken similar to the Chesterfield County initiative, and other Virginia counties, to provide such incentives to private parcel owners to renovate or rehab their properties. Given that the draft Consolidated Plan stated that more than 50% of the Arlington residential properties are 50+ years old, I commented that this type of program would seem to be most appropriate for our county. Staff discussed the County's grant assistance program to assist the elderly and low income and described the County's program to rehab the Buckingham project and others, but did not address the County's implementation of the state approved program to provide such tax exemptions to renovate older housing.

Chairman Zimmerman, and members of the Board, the first page of the second document that I gave Ms. Jones to give to you is Code of Virginia, Section 58.1-3220, Partial exemption for certain rehabilitated, renovated or replacement residential structures. Under Subsection A., the Code prescribes that the governing body of any county, city or town may, by ordinance, provide for the partial exemption from taxation of real estate on which any structure or other improvement no less than fifteen years of age has undergone substantial rehabilitation, renovation or replacement for residential use, subject to such conditions as the ordinance may prescribe...The governing body of a county, city or town may establish criteria for determining whether real estate qualifies for the partial exemption authorized by this provision and may require such structures to be older than fifteen years of age, or place such other restrictions and conditions on such property as may be prescribed by ordinance.

Chesterfield County: The second page of document 2 is the Ordinance requirement adopted by Chesterfield County, Sec. 9-32. Partial exemption for certain rehabilitated, renovated or replaced residential structures. Please note under (4)(d) of this ordinance, that Chesterfield County authorizes exemptions to become effective on January 1 of the year following the determination made by the assessor and shall run with the real estate for a period of eight tax years. The amount of the exemption shall not change over such eight-year period. (This ordinance was adopted on June 12, 1996.) Page 3 describes Chesterfield County's Incentive Program for the Rehabilitation of Residential Properties and Page 4 is the Application Form for the Incentive Program. On April 13, 1998, I received an e-mail from Chesterfield County that indicates they have six properties currently in their rehab program, and seven pending applications.

City of Fairfax, Virginia: Page 5 of the second document is a description of the City of Fairfax's Residential Rehabilitation Program ("www.ci.fairfax.va.us/realestate/re01008.html") To be eligible under their adopted ordinance, homes must be at least 15 years old and structural improvements of additions must increase the assessed value of the building by at least 15%. Homeowners need to acquire appropriate permits and apply for the exemption before remodeling. The exemption is based on the increase in property value and is applied to the property for a period of 10 years on a sliding scale. Currently, the City of Fairfax has 55 houses in their program, including four that are pending application approval. Previously, the City of Fairfax used a 25% requirement to be eligible, but reduced the percentage to 15% to encourage more parcel owners to join the program. Under their current ordinance, the amount of the exemption is "no" tax on the improvement value for each of the first five years. Beginning in the sixth year, the improvement portion is taxed at 17% of assessed value, and each year thereafter an additional 17% is added. The exemption is phased out at the end of ten years. Page 6 of document 2 is the Real Estate Tax Exemption form for applying to the City of Fairfax, VA, program. It is readily available on the Internet Web at "www.ci.fairfax.va.us/taxapp.html/."

Fairfax County, Virginia: Page 7 of the second document is a description of the Tax Exemption Program for Rehabilitated Property, Fairfax County, VA. This description is readily available on the Web at "www.co.fairfax.va.us/comm/hcd/backro.htm"), which shows that thirty Virginia jurisdictions employ limited tax exemption to encourage property improvement or redevelopment. Many programs have been in operation for more than five years and have stimulated redevelopment without a negative fiscal impact. Pages 8-13 show that Fairfax County, VA, adopted their Tax Abatement Ordinance effective September 1, 1997, and include the details about the ordinance ("www.co.fairfax.va.us/dts/taxabat.htm"). Currently, Fairfax County, VA, has 49 properties in their Tax Exemption Program, which is not yet eight months old. Under their program, property improvements are exempted at 100% of appraised value during each of the first ten years, and 20% of the improved value is exempted for each of the next five years after the initial ten years of exemption. The exemption is fully terminated in year 16. It is interesting to note that once the tax exemption is approved it attaches to the parcel and can be transferred upon sale of the property to the next owner.

Given the concerns stated in the County's Consolidated Plan about the aging residential stock of housing in Arlington and the decreasing numbers of quality affordable housing, I recommend that the County Board initiate action to adopt the Virginia Partial Exemption Program for Renovated Residential Structures. If adopted, I believe this action could also help reduce the current market demand in Arlington for infill development and help protect the integrity of all Arlington neighborhoods. More importantly, if adopted, this program in the long run should increase the total assessed value of both residential and commercial properties in Arlington, increasing our tax base and adding additional revenues for our county government and services provided. Thank you.

Ernie Ragland, President
Ballston-Virginia Square Civic Association

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