City of Virginia Beach Real Estate Assessment Issues
A CACI UPDATE AS OF AUGUST 4, 2003
by Bob O'Connor, President
The mission of Virginia Beach's Real Estate Assessor is to appraise ALL taxable real estate properly fairly and equitably.
The Citizens Action Coalition, Inc. (CACI) believes
that mounting evidence clearly demonstrates serious real
estate assessment disparities that cause residential
homeowners to be unjustly taxed.
During the past 2 years, CACI has brought the problem to the attention of the Mayor and other Councilpersons at the City's annual budget hearings. In June 2003, CACl's E-mail outlined the reasons justifying an independent study of the City's assessment system. CACI again recommended that Council initiate a study of the real estate assessment system.
By letter dated July 8, 2003, the mayor advised us,
in essence, that assessments were
done in a manner that meets professional industry standards. And Council believes we have a very professional, well trained, and competent Real Estate Assessor and staff.
It is apparent that the mayor does not favor or support an independent study of the assessment system.
CACI still believes the City's system is seriously
flawed and CACI will continue its quest for a thorough study
of this issue. Further, CACI plans to survey facets of the
real estate assessment issue and bring the results to the
Council, Virginia Legislators, and public attention. This
paper contains initial results of our follow-up.
OF HOTEL AND RESIDENTIAL REAL ESTATE ASSESSMENTS
CACI has discovered what appears to be a very
disturbing pattern. It seems that hotel real estate
appraisals are generally declining while homes, in many
neighborhoods, are soaring.
During the past 5 years, the rate of growth for hotel
assessments averaged less than 2 percent per year. The FY 04
assessments totaled about $522.3 million which represents an
increase of $26.7 million over the prior year. However, that
increase included $23.9 million of new construction leaving
a net appreciation rise of $2.8 million or less than 1
percent over FY 03.
Additionally, CACl's review of 12 hotels located at
the oceanfront uncovered an alarming pattern. For these
hotels, the City's assessed values for FY 03 totaled $60.2
million but new assessments for FY 04 dropped to $59.1
million down $1.1 million. Devaluation occurred in 8 cases,
three other assessments went up slightly, while one had no
Especially noteworthy is that of the 12 cases, the FY
04 assessments for ten hotels
showed NO CHANGE in land values. Total land values for two hotels increased $221,620.
These assessments seem incredible when land values
throughout the City are going up significantly especially when
one takes into account the millions spent by the City on
physical improvements at the resort strip, including extensive
widening of the beach and boardwalk improvements.
On the other hand, the City's real estate assessments of residential properties are moving in the opposite direction, the assessor's report for FY 04 shows that residential assessments rose an average of about 7.17 percent. According to the Virginian Pilot, Virginia Beach assessments in some neighborhoods rose 20 percent or more, as illustrated by the following examples:
With regard to Sandbridge, it should be noted that it
has a major on-going beach replenishment program which is
partially funded by an additional real estate tax on
Sandbridge properties. Such an additional tax is not levied at
the resort strip.
CACI is unable to accept the status quo stance
advocated by the Mayor. And we again call for an independent
study of the system to identity its shortcomings and provide a
fair and equitable basis for real estate taxation.