In February property owners throughout Alexandria received something in the mail from the City, and unfortunately it was not a Valentine's Day card. Earlier last month the City released the assessments for each taxable and non-taxable property within our limits. Individual property owners can view their assessments (for this year and previous years) online.  

This year's assessment report is a mixed bag for the City and its taxpayers. Overall, the City's real property tax base increased by 3.5% to $37.15 billion. That's a larger increase than the last two years and in a very challenging environment regionally, it shows that the market still perceives Alexandria as a valuable place to live and conduct business. 

Yet, when we peel apart the numbers a bit, there are storm clouds on the horizon. Overall, the City's real estate tax base has just now returned to our 2006 peak, prior to The Crash. 

While the real estate tax base grew by $1.24 billion, $504 million of that increase (nearly half) came from new development. A full $424 million of that growth comes from residential new construction. While still typically a net gain to the City's taxpayers, residential properties do generate additional costs at the same time. 

Our real estate weakness continues to be with our commercial properties. While our commercial tax base increased 2.37%, that number is fairly deceptive. In Virginia, a multi-family apartment building is considered a commercial enterprise and thus is taxed as a commercial property. If you remove the residential properties that are taxed as commercial properties, the City's commercial (non-residential) properties increased by 0.53%. If you drill down even further and remove the $80 million of new (non-residential) commercial development from the mix, it means that the valuations of existing commercial property (non-residential) in the City actually dropped by $36 million this year compared to the previous one. 

Shrinking demand for office space that is not in close proximity to transit is having a devastating effect on our office vacancy rate. 

As a residential taxpayer, this should be very troubling. This means that nearly 75% of the City's real estate tax base is residential, a new high. Said another way, the homeowners and renters in our City are paying the highest share of the cost for our government than they ever have, and the problem may in fact be getting worse. 

This is exactly why economic development initiatives like Potomac Yard Metro, Landmark Mall redevelopment and the Waterfront Plan are so vitally important to our City's future. Each of those efforts are designed to improve our business environment, to increase our commercial real estate tax base and increase commercial consumption-based taxes. 

The report also noted that overall $1.22 billion of our City's real estate tax base has been developed within the past 5 years. That property brings in over $12 million a year in real estate tax. That means our City's real estate tax rate is about 4 cents cheaper as a result of the development in the past 5 years. 

The City does not always get the assessment right the first time. If you believe that your assessment was incorrect, the first step is to request a review. These requests can be filed online or on paper and must be filed prior to Monday March 16th.