Washington Post Article 

How Fairfax Changed Home Values
Friday, February 29, 2008; B02
Although residential property assessments in Fairfax County are down an average of 3 percent, the underlying value of the land has in many cases increased markedly. County officials say they based the valuation on nearby land sales. Here are two examples of actual valuations:
A 1958 split-level home in Springfield
2007 valuation 2008 valuation
Home $308,180 $107, 800
Land $162,000 $327,000
Total $470,180 $434,800
Recent neighborhood home sales: $460,000 in February 2007, $464,000 in April 2007 and $470,000 in June 2007.
Recent area lot sales:$490,000 in June 2006, $350,000 in April 2007 and $475,000 in June 2007.
A 1984 single-family home in Great Falls
2007 valuation 2008 valuation
Home $457,020 $307,070
Land $495,000 $627,000
Total $952,020 $934,070
Recent neighborhood home sales: $1.4 million in March 2007, $1.1 million in July2007.
Recent neighborhood land sales: $930,000 in January 2007, $660,000 in March 2007, $950,000 in October 2007.
Source: Fairfax County Department of Tax Administration 

Washington Post Article 

Land Value 'Correction' Surprises Homeowners
By Bill Turque
Washington Post Staff Writer
Friday, February 29, 2008; B05
It was no surprise to Cathlin Bowman that the 2008 real estate assessment she received from Fairfax County this week showed a modest dip in the value of her three-bedroom McLean home, to $564,930 from $567,590 in 2007.
A barren housing market and a deteriorating economy have pushed residential property values down about 3 percent countywide.
What stunned her was the gaping disparity between the value of the 1951 brick-and-shingle house on Barbee Street and the land under it. The 11,500-square-foot lot, assessed at $301,000 last year, is now worth $501,000 -- an increase of 66 percent.
Her house, assessed at $266,590 in 2007, is now valued at $63,930 -- a decrease of 76 percent.
"Heck, $63,000 won't even buy you a decent kitchen these days," Bowman, director of learner-centered education at the American College of Cardiology, wrote in an e-mail Wednesday to the Fairfax Department of Tax Administration. "The county now believes my house is worth less than a mobile home or even a studio condominium."
Bowman is one of scores of bewildered -- and suspicious -- Fairfax taxpayers whose homes are shriveling in assessed value while the underlying dirt appreciates robustly. Some have suggested a massive software foul-up that flipped land and building values. Others wonder whether the county is trying to hang on to tax revenue in an economy sliding toward recession.
"Real estate interests have probably benefited in some way," said George Taft, a retired State Department lawyer whose home in the Wilton Woods neighborhood fell in assessed value from $431,070 to $267,480, while the land went up nearly $100,000.
County officials said there is no mistake, nor any bid to gain extra money. What homeowners are seeing, they said, is an attempt to raise land values that have remained disproportionately flat in recent years relative to the homes.
Officials said the elevated assessments are based on an analysis of sales of nearby vacant land. Because the supply of undeveloped property in the county is diminishing, it took more than a year of sales to document the change, they said. Included were neighborhoods with lots that once held older homes that were torn down and replaced by much larger residences.
The numbers, said tax department director Kevin Greenlief, reflect "a pent-up correction," but nothing more. Bottom-line assessments are unaffected; only the allocations of value between land and building have shifted, he said.
"In no way, shape or form is DTA cooking the books or propping up revenues because of the budget situation," he said.
Members of the Board of Supervisors, pelted with phone calls and e-mails over the past couple of days, questioned Greenlief's account.
"We've asked for a plain-language explanation from DTA," said Supervisor Penelope A. Gross (D-Mason). "My question is, why is a small percentage of vacant, undeveloped land apparently driving the land values for all developed property?"
Supervisor Gerald W. Hyland (D-Mount Vernon) said the one-year change is striking. "The assessors need to be pressed to justify their rather dramatic attribution of value to the land," he said.
Supervisor Jeff C. McKay (D-Lee) said he has asked County Attorney David P. Bobzien for an opinion on whether the board can challenge the tax department's methodology and push for a reassessment of values. He said the agency is playing a questionable game of catch-up.
"It appears that we are behind in keeping up on raw land, and now to bury that, we depreciated people's structures, all in one year," he said.
McKay added that he was especially concerned that the spike in land values would result in more homes being torn down in favor of new homes that are wildly out of scale with the surrounding neighborhood.
"We've said that the land is way more valuable than the houses. Are we not encouraging more teardowns?" he asked.
Supervisors said they are also miffed at Greenlief's failure to signal the board that such a major correction was in the works. Greenlief said the study of land values was discussed with the Board of Equalization, the nine-member panel appointed by supervisors to hear homeowner appeals and change assessments. Board of Equalization members told the county staff last year that in hearing tax cases, they had noticed that assessed land values were out of step.
Greenlief said he should have been more careful about keeping supervisors and taxpayers in the loop.
"I would accept responsibility for that," he said. "I'd have to say that it was an oversight on my part that we didn't do a better job. The values are correct. It's the process that needs to be better."
Loudoun County Assessor Todd Kaufman said that sudden, large reapportionments are not uncommon in places such as Fairfax because the dearth of undeveloped land leaves little for assessors to work with in comparing parcels. Sometimes it can take several years for enough sales to accrue in developed counties before sufficient data are available to update the value of underlying land, he said. Those updates can appear in the form of spikes on a property owner's annual assessment.
"Loudoun's different than Fairfax County," Kaufman said. "There's preliminary subdivisions being developed all the time in Loudoun."
In Alexandria, where assessments dipped overall, the land values rose on average about 10 percent in the city, with about three-quarters of neighborhoods affected. The values rose because "the location is so desirable," said Cindy Smith-Page, director of real estate assessments for Alexandria.
"So many properties have been gutted or demolished to build houses that are newer and larger," she said.
Smith-Page said that she has received some calls questioning the land-value increase, but not many, because overall assessments have not increased.
Prince William County will not send out its assessments until the weekend of March 14.
Staff writers Kirstin Downey, Kristen Mack and Jonathan Mummolo contributed to this report.