Building on the Tax Base

Construction, Prime Locations and Fewer Subprime Mortgages Push Arlington's Overall Assessments Up Despite a Slumping Economy

When Arlington's assessor released numbers recently showing that the county had healthier-than-expected finances, one reason was Obidio Gonzales.

Despite the recession and sagging home values, he and hundreds of other construction workers stayed busy in Arlington last year on a host of commercial and residential projects. Those emerging buildings, such as the Residence Inn near the Courthouse Metro station where Obidio strung cable in icy winds late last month, are what nudged the county's tax base up this year.

The increase was a scant 0.4 percent, but the performance helped cut the county's projected budget deficit from $40 million to $35 million and gave county officials some moderately good news in a region where the effects of the downturn have been felt unevenly.

"It's a relatively healthy real estate market, from what I know about surrounding areas," said Tommy Rice, the county's director of real estate assessments. "There are still some cranes in Arlington."

The construction helped offset the effects -- on the county government's finances, if not on individual homeowners -- of the national recession and sagging property values locally. The value of the average single-family house in Arlington dropped, on average, 2 percent in the assessments for this year, to $520,100. That follows a dramatic rise in values through much of the decade.

Arlington's modest declines are in sharp contrast to those in some of Washington's outer suburbs. "The farther you move away from the District, the more dramatic the changes are in values, mostly declining residential values," Rice said. Real estate assessments in Prince William County, for example, dropped 30 percent last year and are expected to go down 15 percent this year.

Arlington's average masks the depth of the declines in some parts of the county. The southern end of the county experienced more significant drops. A section of the county just north and south of Columbia Pike, for instance, had the steepest fall: 7.7 percent. The average assessment in that area in 2009 is $386,359. Assessments in a neighboring section that covers Four Mile Run Drive dropped 6.7 percent, to $355,663, according to the county figures, which are based on a long-running analysis that slices the county into 11 pieces for comparison.

The three sections on the county's northern end had increases in value of about 1 percent. The area east of North Glebe Road, which has the county's highest average property assessment at $934,054, increased 0.7 percent.

"Property at the lower end of the price spectrum seems to have declined in value more than property at the upper end," Rice said. One reason, at least anecdotally, is the financial crisis, fueled by the subprime mortgage mess, Rice said. More buyers of lower-priced homes took out loans that were difficult to sustain.

"The frequency of foreclosures seems to be greater with properties at the lower end of the price spectrum," Rice said.

New County Board Chairman Barbara A. Favola said a county priority remains promoting development near a planned streetcar line through the Columbia Pike corridor.

"The next generation of development in this county will take place along Columbia Pike," Favola said. "Arlington has enjoyed many successes because we are willing to plan for a future that supports a high quality of life for businesses and residents."

A key goal is to preserve affordable housing in that area as growth emerges, she said. "The loss of affordable housing along the pike is almost certain" without a concerted county effort, she said.