Economic fallout from the COVID-19 pandemic did not reverse the trend of Richmond’s rising property values, according to City Assessor Richie McKeithen and his staff.
The average value of a single-family home in the city rose from $266,000 to $277,000, or a little over 4%. The bump will drive up the average real estate tax bill by $132 annually. The increase, though lower citywide than those in the each of the past two years, is much steeper in certain neighborhoods, according to figures made available by the assessor’s office.
“I thought that was a pretty healthy increase, given the situation with COVID-19,” McKeithen said. “Practically every residential neighborhood had some increase.”
Over the past decade, home values have risen faster in Richmond than anywhere else in the region. At the same time, development of new homes and apartments for families making less than the area median income has not kept up with the need, according to the Partnership for Housing Affordability’s regional housing framework. The COVID-19 pandemic has drawn into sharper focus pre-existing housing insecurity. Climbing assessments that translate to higher tax bills and rents could make the problem worse.
New assessments would normally go out in the summer, but McKeithen’s office delayed the annual process because of uncertainty surrounding how the pandemic would affect the market, he said. In spite of the pandemic, he said values continued the upward trajectory they’ve been on in recent years.
For the 2019 tax year, the average home value rose from $228,000 to $247,000. In the current year, it rose to $266,000. With the new assessments, the average is up to $277,000.
The average homeowner in the city has seen their tax bill go up $588 in the span. Richmond’s real estate tax rate of $1.20 per $100 of assessed value is the highest among surrounding localities.
Property owners in South Richmond and the East End saw the largest percentage increases in the new assessments for the second consecutive year. Some of the steepest jumps — in the Bellemeade, Fairfield, Oakgrove and Whitcomb neighborhoods — exceeded 15%.
Laura Lafayette, CEO of the Richmond Association of Realtors, hypothesizes those increases could be driven by investors seeking to buy property in neighborhoods with cheaper housing stock, nearby those where sale prices have already surged.
“I do think it’s about proximity to neighborhoods that have seen rapid price appreciation,” she said.
Citywide, sale prices have continued rising, fulled by a dearth of houses on the market to meet the demand among interested buyers, Lafayette said. Rising assessments are a reflection of those sales prices.
Jerome Legions, president of the Carver Area Civic Improvement League, paid $15,000 for his home on West Clay Street in 1997. With the new assessments, his home value will jump from $209,000 to $247,000.
That growth outpaced others in the Carver neighborhood, where the average assessment rose by more than $20,000 from last year.
On one hand, Legions said the increase represents a nice return on his investment. But on the other, he worries about his neighbors, and whether they can continue to bear the burden of ever-rising tax bills.
The 66-year-old said he plans to apply for the city’s tax relief program for seniors. Legions said he would encourage other residents who qualify to apply. When he’s broached the subject in the past, he said many he approached about the city program didn’t know it existed.
“I want to make sure as many seniors as possible take advantage of that,” Legions said.
In 2019, the Richmond City Council expanded eligibility for the relief program. The council members said at the time it was an effort to ensure elderly residents living on fixed-incomes and longtime city residents could stay in their homes.
Under the new guidelines, which took effect this January, anyone 65 years or older or who is permanently disabled can apply through the Department of Finance for a full or partial waiver for their tax bill, depending on their income and total value of their assets.
Seniors earning less than $30,000 annually can apply to have their real estate taxes waived in full. Those earning between $30,001 and $40,000 are eligible to have up to 75% of their tax bill waived. Those earning $40,001 to $50,000 are eligible for half their taxes. Those who make $50,001 to $60,000 can apply to waive a quarter of what they owe.
In spite of the expanded eligibility, the number of participants in the program dipped this year, said John Wack, Richmond’s director of finance.
In year’s past, Wack’s department has granted more than 2,300 residents relief annually.
So far this year the department has approved only 1,737 applications. That came after Mayor Levar Stoney’s administration recommended, and the City Council approved, an extension of the initial March deadline into April and redoubled outreach efforts.
Causing the drop-off, Wack said, was a large number of residents who had participated in the program previously who either did not submit an application, or did not furnish the department with all the required paperwork to receive an approval.
Wack said the administration plans to introduce an ordinance at Monday’s City Council meeting extending the application period for the relief until Oct. 30.