Arlington County to Eliminate Tax Incentive for Apartment Renovations

Comments At Arlington County Tax Hearing, April 23, 2020

Buried in the FY21 Budget Book, is the proposal now before the Board to repeal the partial tax exemption for renovation of multi-family properties.

At a recent County Board meeting I commented that this initiative is directly contrary to several goals outlined in the Affordable Housing Master Plan, among them to:

  • “1.2.1 Incentivize the production of moderately-priced ownership housing through land use and zoning policy.
  • “1.2.2 Encourage production and preservation of family-sized (e.g. 3+bedroom) moderately-priced ownership units.”

Christian Dorsey responded that the partial tax exemption incentive is never used. Yet according to the County Manager:

Repeal of the ordinance will not impact the FY 2021 Budget. Current applications will be allowed to continue to utilize the tax exemption. It is estimated that the collection of otherwise foregone revenue will not be realized until FY 2022 or FY 2023. (Budget Book 87-97)

Mark Schwartz, Arlington County Manager

If indeed the incentive is not used, then no past revenue has been foregone and no future revenue will be realized. What then is the purpose of the ordinance other than to cut off the only remaining mechanism for preserving market rate affordable housing in the County?

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Arlington County thinks it’s doing taxpayers a favor with no increase in the real estate tax rate this year. Yet comparison of the numbers in the County’s own FY21 budget book with Bureau of Labor statistics indicates that taxes have increased at double the rate of inflation over the past ten years (web 119).

This taxpayer rip off can be absorbed in a thriving economy. But the unemployment rate has skyrocketed, and there is no end in sight to the pandemic that has throttled the U.S. economy.

As a result, hundreds of people may be faced with foreclosure before the year is out. Under these circumstances County Board should reduce the current tax rate not maintain it.

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