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So Many People, So Few Places to Build

Home Assessments Reflect Demand, Limited Supply

By Lisa Rein
Washington Post Staff Writer
Thursday, March 3, 2005; Page VA20

In the job and building boom of the 1980s, construction of homes in Fairfax jumped by 40 percent while the population grew 37 percent. Building slowed in the 1990s, to an increase of 18 percent, but population growth remained just below that, leaving enough homes to go around.

But in the first five years of the new millennium, the balance of people and homes in Fairfax has tipped the scale in the other direction: A 7.4 percent growth in population between 2000 and 2005 is expected to exceed a projected 7.2 percent growth in homes over the same period.

In Fairfax Station, Claire Hietanen, 6, and her father, Paul, get some exercise around Braymore Circle, where a sampling of home assessments showed an average increase of 19 percent, close to the 20.86 average for the Fairfax Station area. (Ann Cameron Siegal For The Washington Post)

_____Tools for Homeowners_____
How to Offer Input on the Budget
How to Figure Your Assessment
How to Appeal an Assessment
County Considers Fee Hikes for Services
A Fifth Straight Year Of Double-Digit Gains
Countywide Averages

This imbalance of supply and demand is one of the main reasons why real estate assessments shot up an average of 23 percent in the last year, more than doubling the previous year's jump of 11 percent.

While the spiraling values mirror increases in red-hot housing markets in neighboring counties and cities, Fairfax occupies a singular place in the Washington suburbs, county officials and local economists say.

The region's largest jurisdiction, now with an estimated 1,041,200 residents and 814,000 jobs, is virtually out of space that can be built on. At the same time, Fairfax is Northern Virginia's job engine, adding 25,000 of the 70,800 jobs created in the metropolitan area last year.

"It's the health of the economy and the inability of the builders to supply sufficient housing," Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, said of the county's rising values. "The county is running out of buildable sites, and the system is not designed to accelerate the supply."

To stem rising property tax bills, County Executive Anthony H. Griffin on Monday proposed a 10-cent cut in the property tax rate from the current $1.13 for each $100 of assessed value to $1.03. The Board of Supervisors has indicated it will push the rate lower still. But even with a 10-cent cut, homeowners will still pay $500 more on average in real estate taxes.

The sticker shock from assessment notices arriving this week spares no neighborhood. Inside the Capital Beltway and in newer areas outside, values jumped by at least 20 percent on average, from more than 25 percent in Herndon to more than 26 percent in the Alexandria area. The only properties to decline in value between 2004 and 2005 are slivers of land too small to build on -- and they are a rarity.

Lorton, with its industrial legacy of a landfill, sewage treatment plant and prison, was perhaps the biggest surprise, seeing the largest jump in values at nearly 30 percent. The county's southeast corner has boomed with new homes in recent years, thanks to rising demand and an ideal location near Interstate 95 and a Virginia Railway Express line. The county plans to redevelop much of the former D.C. Correctional Facility into a suburban version of Central Park, and a new high school will open there in the fall.

Permits for a total of 2,680 single-family homes, townhouses and condominiums were approved in 2003 and 2004 in the Mount Vernon district, which includes Lorton.

"All of a sudden, the community has become an attractive, exciting place to live," said Supervisor Gerald W. Hyland (D-Mount Vernon). "It's the fastest-growing part of the county, and the [real estate] values are reflecting that."

Another surprise was the zooming values in Centreville, where homes are now worth over 27 percent more, the second-largest jump.

People are used to thinking of Centreville as the growing corner of western Fairfax. "But there's not much land left," said Supervisor Michael R. Frey (R-Sully), who represents the area. "A lot of people think of Centreville as the Wild West, but it's not going to be a source of much new housing."

Frey cited job growth along the Route 28 corridor, rich with defense contractors, as a major factor in the area's popularity.

Defense workers and other federal contractors are driving Northern Virginia's job growth, Fuller said, accounting for 52 percent of the value of all federal money spent in Virginia, Maryland and the District last year.

Vendors, suppliers and other business services, plus a growing service sector, have spun off from the federal work, heating up the local economy and increasing the demand for housing in the county and neighboring jurisdictions.

With so little land left, builders in Fairfax are turning to condominium conversion and development, a shift reflected in the 33.5 percent jump in assessments in the condo market, the biggest residential increase. The shift is at the high and low ends, from the luxury market for professionals and retirees to starter units. The county issued 4,797 permits for condos and apartments last year, four times the number in 2003, planning data show, while permits for single-family homes plummeted 13 percent during the same period, to 2,554 permits.

One frustration for Fairfax officials is the declining share of commercial property in the county's tax base. While millions of square feet of office space were filled last year, the county still has a 12 percent vacancy rate.

Commercial property accounts for just 17 percent of the tax base, significantly under the county's goal of 25 percent. The more money the county can bring in from the commercial tax base, the less it has to rely on homeowners to pay for services.

While many homeowners will not be happy about the assessments mailed Monday, county officials said they do not expect a flood of formal appeals beyond the traditional rate of 1 percent. Fairfax tends to assess "on the conservative side," said Kevin C. Greenlief, the county's director of tax administration, because of the volume of parcels that are looked at. That means that values tend to lag behind a property's market value by as much as 8 percent, he said.

"We may get a few more emotional appeals," Greenlief said. "But simply appealing because your assessment went up won't be a bona fide appeal. I think people understand that the values are simply going up."

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