Extreme ups, downs seen in assessments

David Winston and his wife moved into their Grove Street home about six years ago. Located in Fifeville, a neighborhood in the shadows of the University of Virginia, the house sits not far from Charlottesville’s center.

At the time of its purchase, the single family home was assessed at $119,000, placing it among the city’s affordable housing stock. But since then, its value has more than doubled, with Charlottesville’s most recent assessments pegging its worth at $268,100.

While average assessment growth is stagnating in Charlottesville — the 2009 assessments showed that city-wide average growth in existing homes was a mere 1.02 percent compared with 4.2 percent last year and 16.2 percent two years ago — there were still some neighborhoods that saw noticeable climbs.

Those neighborhoods include Fifeville, 10th and Page and Carlton-Belmont, which on average saw increases of 11 percent, 6 percent and 5 percent, respectively, among existing homes. The assessment increase will likely equate to a tax hike for many who live in Charlottesville’s traditionally more affordable neighborhoods, including Winston, who is retired and is living off Social Security.

“If it keeps going up, and you’re making nothing, how can you make it?” Winston said, referring to his home’s value.

Most neighborhoods in Charlottesville saw declines or no changes in their average assessed values, and the assessment hikes are considerably less than when the city was thriving in the strong real estate market. Just two years ago the average assessment in Fifeville jumped 32 percent.

But officials say they were not surprised that those areas of the city, which tend to be more influenced by tear-downs and redevelopment than the city’s more established neighborhoods, saw increases even in the slow housing market.

John Gaines, who lives on Ninth Street and also saw his assessment go up this year, said he has seen developments sprout up around Ridge, Ninth and 10th streets that have likely had a “tremendous impact” on existing home values.

“Many of the neighbors are elderly people and they’re trying to live on fixed incomes,” he said.

As a result, worries about housing affordability still linger.

“Neighborhood gentrification has always been a concern to me for that very reason,” Mayor Dave Norris said. Norris, who lives in Belmont, said he remembers when a house across the street from his sold for $72,500 seven years ago.

“Then Belmont went crazy,” he said.

Parts of Belmont have evened out in terms of average assessment growth, but others are still on the rise. Belmont-Carlton’s increase in existing home values may make it especially hard for residents who have lived in their homes for decades and are at or near retirement age, said Jesse Fiske, the Belmont-Carlton Neighborhood Association president.

“There are people who have lived there for ages,” he said. With rising taxes, he added, “we’re going to lose accessibility to the city for a lot of people. Hopefully, it won’t push too many people away.”

On the other hand, residents in many of the city’s long-established neighborhoods are seeing assessments reflect losses in their home values brought about by the struggling housing market. Greenbrier values declined an average of 10 percent, something city officials say they have not seen before.

Greenbrier resident Melissa Fenner, who bought her first home in the neighborhood with her husband in 2005, said their recent assessment underscores the fact that they bought their house at the peak of the housing bubble.

“We’ve just thought, what would our house sell for if we did have to sell it?” Fenner said. Fortunately, she added, she and her husband are planning to stay in Charlottesville indefinitely, but they still have concerns about whether selling their home would force them to take a financial loss.

“There’s always that concern, especially if the market continues to decline,” she said. “Hopefully, we won’t have to face that anytime in the near future.”

Councilors say that the assessment data will help them figure out the tax rate for the fiscal 2010 budget, which will be formally presented at their March 2 meeting.

“We have to continue to take a close look at expenditures in the city to keep taxes down,” Councilor Julian Taliaferro said, adding, “I think anything we can do to lessen the impact [of higher taxes] we should do,” though he does not know if the tax rate would be reduced.

The city has existing real-estate tax relief programs, including the Elderly Tax Relief program. Last year, 493 households received an average of $1,398. The average real estate tax bill for those who qualified last year was $2,096.

But, Norris said, rising assessments are “still difficult when you’re on a fixed income, even with the tax relief.” Norris said he does not believe there is interest in raising the 95-cent tax rate, but also doubts that the rate will be lowered.

“Lowering the tax rate at this point, when we’re seeing revenues flatten out already, is not a wise move,” he said.