Scott York Talks Real Estate, Tax Rate with Local Realtors

Scott York, Chairman Loudoun County Board of Supervisors met with the Dulles Area Association of Realtors Government and Political Affairs Committee yesterday. The purpose of this meeting was to discuss the Loudoun housing market and other Loudoun real estate related issues.

Some of the topics covered were:

• Current state of the housing market and future projections
• Foreclosure and short-sale situation and issues
• Loudoun down-payment assistance program and county employee housing assistance
• Best use of $2M from Neighborhood Stabilization Program (NSP)
• New Loudoun County tax rate of $1.245 per $100
• Proposed increase in proffers
• The first annual Dulles Home Fair
• Moorefield Station and Dulles Rail update

I think that we surprised Scott York with some of the latest information and statistics on the Loudoun County housing market as well as the foreclosure and short-sale situation. But that was a given… The market, bank policies and rules change so quickly and often that it’s hard to keep up – even for full time real estate agents.

Some of us made the suggestion that the county use the $2M from the Neighborhood Stabilization Program more for down-payment assistance than for buying up foreclosure properties to rehab and flip. Rather than buying 10 to 12 foreclosure properties, rehabbing them and flipping them, they could do something like offer $15K in down payment assistance to 150 home buyers who really need it. This could benefit people such as county employees many of who live in West Virginia or Maryland because they couldn’t previously afford to live in Loudoun.

Personally, I think that down payment assistance is a much better use of those funds because it’s helps a far greater number of people than flipping a few bank-owned homes. (Click here to read more about what’s going on with the Neighborhood Stabilization Program and the money)

The first annual Dulles Home Fair was also a topic of discussion, particularly the classes being offered at the event. The classes will help Realtors and consumers better understand the current real estate market and home buying opportunities. (On a side note…Loudoun County is helping sponsor the event)

The latest news on Moorefield Station is that it will be completed sometime in 2016 rather than the 2013-2015 date previously thrown around. Scott York mentioned that the bulk of the construction will occur within the last 2 years of development. Consider the next 4 to 5 years to be the calm before the storm…

And the topic that many of you have been waiting to hear about – the new Loudoun County tax rate.

When sharing our concerns with the new Loudoun tax rate and those of our clients and others we’ve spoken with, he looked as though he had heard the same things from others hundreds of times before. And then he brought up an interesting and great point…

When you do an apples-to-apples comparison of the tax rate of all the counties and areas in Northern Virginia, Loudoun County is NOT the highest in the area as many claim it is (including mass media).

Loudoun County has one real estate tax - $1.245 per $100 – that covers everything while other jurisdictions have multiple taxes that they add on top of the real estate tax. Examples of taxes that other jurisdictions add on to your tax bill are fire and rescue, stormwater service, leaf collection, refuse collection and community centers. These additional taxes make for much higher overall tax rates than advertised.

In addition, Loudoun County’s commercial tax rate is lower than many other jurisdiction’s rates. This may not mean much to many of you, but it means a lot to those of you who are involved in commercial real estate or are a business owner.

So even though Loudoun’s tax rate seemed really high at first glance,  it’s actually not as high as others in Northern Virginia (*cough*…Prince William County… *cough* …Fairfax County… *cough* …and others…)

Definitely a productive meeting with lots of good information and ideas discussed. I got some good things out of it and hope Scott York did as well.

Loudoun County Neighborhood Stabilization Program Update

Loudoun County held a meeting last Friday to discuss the Neighborhood Stabilization Program. Loudoun invited a select handful of folks to answer questions and provide feedback on putting together an RFP in order to apply for the Neighborhood Stabilization Program funds and how to most effectively use those funds.

Those in attendance included local bank representatives, a Dulles Association of Realtors staff member, a couple of Realtors (including myself) and various Loudoun County government staff. The Neighborhood Stabilization Program will be a collaborative effort on the part of those in the county government and lending and real estate industry so it was important to hear from people representing each of those areas.

Here are some of the Loudoun County Neighborhood Stabilization Program highlights and updates…

• Loudoun is fighting an uphill battle – Fairfax and Prince William Counties already got approval for the Neighborhood Stabilization Program ($2.8M and $4.1M), but Loudoun didn't get a dime
• Because of not already being approved, Loudoun has to submit an RFP (due January 30, 2009)
• Loudoun is shooting for the minimum – $2 million per allocated neighborhood
• Loudoun has already determined the required 3 neighborhoods that meet the requirements of the program, but the county is not releasing which 3 neighborhoods they've selected (?)
• Loudoun has determined that the types of properties within those 3 neighborhoods that qualify under the program's rules are town homes (no condos, single family, etc)
• There are some issues with legal language of contracts that need to be addressed prior to the RFP being submitted (don't ask me for details – it's all lawyer lingo)
• Loudoun is shooting for the minimum – $2 million per allocated neighborhood
• After surveying properties throughout the county, Loudoun determined that the majority of properties need "minimal to moderate" rehab costs
• They're going to be using some, if not most of the money to buy, rehab and flip properties

Here are some of the issues I have/see…

• When Loudoun surveyed the properties, they never once went inside any of the properties. With the majority of the necessary rehab work being on the inside of foreclosure properties, Loudoun has no idea of what the true costs of doing rehab on these properties will really be 
• Because they have no real idea of what the true costs per property will be, they're whole plan and budgeting of the money will be off 
• Rather than flipping a total of maybe 12 to 15 properties ($2M divided by average cost of property + rehab), why not focus on helping out the community and residents in ways to reach more people (how about 50 people) and those such as teachers and firefighters who can't afford to live in the same county they work in…(more to come on that in a future post)
• Loudoun must have dropped the ball or pissed someone off in Richmond because Fairfax County and Prince William County had no problem getting money for the program, but Loudoun didn't get any an now has to apply for the bare minimum (I have four words for you conspiracy theorists – "opposition of Grantor's Tax")

• Rather than flipping a total of maybe 12 to 15 properties ($2M divided by average cost of property + rehab), why not focus on helping out the community and residents in ways to reach more people and those such as teachers and firefighters who can't afford to live in the same county they work in…(more to come on that in a future post)

Though no process nor government program is perfect and most have some flaws, I think that the Neighborhood Stabilization Program is a good thing overall.

But Loudoun must make sure that it spends the money wisely and in the best interests of the neighborhoods and people it's supposed to serve – not for the self interest of Loudoun County government or revenue. This is especially true when you consider that $2 million is a drop in the bucket for a county that has $62.7 billion (with a "b") in total real estate values and hundreds of foreclosures on the market at any given point in time.

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"Loudoun appeals to Richmond for funds" – Washington Business Journal