Virginia At Issue - February 2022
Legislative Update: Session Reaches Halfway Point
This week, the Virginia General Assembly celebrated “crossover,” the procedural deadline that occurs at the halfway mark of each legislative session. Bills must be passed in their chamber of origin by this deadline to receive further consideration. At this juncture, AOBA has worked to defeat or amend many harmful policy proposals and seen several beneficial bills pass through their chamber of origin.
Provided within is a summary of priority legislation being tracked by AOBA’s Virginia advocacy team as bills cross over from the House to the Senate and vice versa. A comprehensive legislative tracking list is accessible here.
Please feel free to contact our advocacy team directly with any feedback or insights regarding proposed legislation and its potential impacts on your business.
FAILED: Local Rent Stabilization Authority
H.B. 596 – Nadarius E. Clark (D - Portsmouth)
PASSED HOUSE: Penalties for Misrepresentation of Assistance Animal
H.B. 586 – Schuyler T. Van Valkenburg (D – Richmond)
AOBA proactively introduced H.B. 586 with Delegate VanValkenburg, which penalizes individuals who knowingly misrepresent themselves as needing an assistance animal. Under the bill, renters requesting assistance animals would have to provide written documentation from an individual with whom they have a therapeutic relationship. Those found misrepresenting a therapeutic relationship would be subject to a Class 4 misdemeanor. The bill unanimously passed the House of Delegates and has been referred to the Senate Committee on General Laws.
FAILED: Permanently Increasing Pay or Quit Notices from 5 to 14 Days
H.B. 803 – Marcia “Cia” S. Price (D – Newport News)
Delegate Marcia “Cia” Price introduced H.B. 803 to permanently increase the eviction notice period from 5 to 14 days. During the pandemic, the General Assembly adopted a temporary measure to extend the timeline to 14 days to allow housing providers and tenants to work together to apply for rental assistance. This is set to expire July 1, at approximately the same time as rental assistance funding is projected to be depleted, and the pay or quit timeline will revert back to 5 days. The 14-day timeline harms housing providers by unnecessarily extending the eviction process and provides no functional benefit for either party. A resident can already exercise their "right of redemption" to satisfy their rental debt up to 48 hours before a Sheriff executes an eviction under Virginia law without any negative consequences. However, residents who have no hope of paying outstanding rent will only be hurt by the additional rent accrued during a longer notice period. AOBA opposed this legislation and vigorously advocated against it. The Housing Subcommittee of the House Committee on General Laws tabled the bill on a 5-3 vote.
FAILED: Presumption of Retaliatory Conduct for Rent Increases
H.B. 840 – Alfonso H. Lopez (D – Arlington)
Delegate Alfonso Lopez introduced legislation to establish a legal presumption of retaliatory conduct if, within six months of having knowledge of certain actions made by a tenant, a housing provider increases rent beyond that which is charged for “similar market rentals,” decreases services, threatens to bring an action for possession, or terminates the rental agreement. AOBA strongly opposed this legislation, which the Housing Subcommittee tabled on a 6-2 vote.
PASSED HOUSE: Employer Retaliation Notice on Unlawful Detainer Summons
H.B. 1236 – Clinton L. Jenkins (D – Suffolk)
H.B. 1236 would direct the Office of the Executive Secretary of the Supreme Court of Virginia to amend unlawful detainer forms to include a notice to tenants explaining they are protected from retaliatory action by their employer for appearing at an initial or subsequent eviction hearing, provided they give reasonable notice to their employer. AOBA supports this legislation to help educate tenants of the protections afforded to them in the existing code and to reduce the rate of tenants failing to appear in court for fear of losing their jobs. The House of Delegates unanimously passed the bill, and it now awaits consideration in the Senate.
PASSED SENATE: Licensure of Boiler Operators
S.B. 461 – John J. Bell (D - Loudoun)
Introduced at the request of the National Association of Power Engineers (NAPE), S.B. 461 would establish a voluntary licensure program and training requirements for operators of boilers and pressure vessels in multifamily buildings. Minor errors in boiler operation can be explosive and potentially deadly. AOBA supports this legislation to ensure that building owners and managers have confidence that the professionals they employ have received appropriate training. The Senate unanimously passed S.B. 461, and it now awaits consideration in the House of Delegates.
FAILED: Landlord’s Noncompliance as a Defense for Nonpayment of Rent
S.B. 284 – Adam P. Ebbin (D – Alexandria)
S.B. 284 would have eliminated the rent escrow requirement for cases where a tenant asserts that a housing provider failed to adequately remedy a defect in their apartment unit. The bill also would have reduced the timeframe under which a housing provider may remedy certain conditions from 30 to 14 days. AOBA strongly opposed this bill, which was punitive towards responsible housing providers who may have taken all reasonable steps to remedy a condition or instituted temporary measures while repairs are being conducted. The Senate General Laws Committee continued the bill to 2023 and asked the Housing Commission to study the issue during the legislative interim.
AMENDED: Localities to Act on Health and Safety Violations
H.B. 802 – Marcia “Cia” S. Price (D – Newport News)
Delegate Marcia Price introduced legislation to allow a locality to enforce the health and safety provisions of the Virginia Residential Landlord and Tenant Act if a housing provider has not remedied violations within a reasonable time. Such enforcement action may include seeking an injunction, damages, or both. AOBA worked with stakeholders to amend the bill to avoid any unintended negative consequences for housing providers acting in good faith to fix problems and to limit the scope of the bill to violations affecting life, health, and safety. The House passed the bill 59-41.
FAILED: Application Fee and Tenant Screening Limitations
H.B. 804 – Marcia “Cia” S. Price (D – Newport News)
H.B. 804 would have required landlords to establish written policies concerning disclosure of application fees and deposits and provide a copy of those policies, or information on where to find them online, to applicants and the public. The original version of this bill placed limitations on when a housing provider may charge a non-refundable application fee and provided tenants the option of utilizing a portable screening report in lieu of paying an application fee. As defined in the bill, portable screening reports could be assembled by the tenant and would have excluded factors that are typically included in a housing provider’s screening process, including criminal screening other than sex offenses, financial obligations and debts, and credit and loan information other than rental history. AOBA worked with Delegate Price and stakeholders to remove the portable tenant screening report option. The House General Laws Committee reported the updated bill to the House floor, but it was rereferred to committee shortly afterward, effectively defeating the bill.
FAILED: Rental Employee Screening and Key Tracking Policies
H.B. 160 – Candi Mundon King (D - Woodbridge)
H.B. 160, as it was originally drafted, sought to require that all housing providers submit their employees to fingerprinting, to be forwarded along with a physical description of the individual to the Federal Bureau of Investigation (FBI) for criminal background screening. The bill further required that housing providers establish key management policies and submit quarterly reports to the Department of Housing and Community Development (DHCD) detailing how such policies have been implemented. The House General Laws Committee advanced an updated version of H.B. 160, which was then tabled by the House Appropriations Committee. AOBA worked with Delegate Mundon King and other stakeholders to amend the bill to simply require housing providers establish written policies for employee screening and key management but did not dictate the details of those policies. In spite of the amendments, the bill failed to advance at the crossover deadline.
FAILED: Written Notice of Rent Increase
H.B. 893 – Michelle E. Maldonado (D - Bristow)
Delegate Maldonado’s legislation would have required a housing provider to provide a written rent increase notice no less than 30 days before the deadline for residents to provide a notice of intent to terminate or renew their rental agreement. AOBA worked with other stakeholders to clarify the language of the original bill. The House General Laws Committee reported the bill to the House floor, but it was rereferred to committee shortly after, effectively defeating the bill.
AMENDED: Child Care Services in Multi-Family Buildings
S.B. 69 – Barbara A. Favola (D – Arlington)
Sustained advocacy by AOBA resulted in amendments to Senator Favola’s S.B. 69 giving housing providers the option to allow childcare uses in their building. Originally, the bill required landlords to permit a licensed childcare provider to operate in any unit. The amended bill passed the Senate unanimously.
FAILED: Energy Benchmarking Requirements
H.B. 379 – Rip Sullivan, Jr. (D – Fairfax)
This bill would have authorized localities to adopt mandatory energy benchmarking ordinances and required recorded data be maintained according to ENERGY STAR Portfolio Manager guidelines. The local government could then require disclosure of aggregated energy consumption data from building owners. Violators of the ordinance would have been subject to a civil penalty of up to $2,500. AOBA supports voluntary benchmarking and encourages members to benchmark their buildings at least annually using EPA’s ENERGY STAR Portfolio Manager or other similar programs. However, AOBA opposes mandates for energy benchmarking or disclosure, as the ultimate decision to disclose building operating data and proprietary information should remain the prerogative of the building owner. The House Commerce and Energy Subcommittee tabled the bill on a 6-4 vote.
Real Estate Rates Flat or Down, but Taxes Likely to Rise
City and county administrators across Northern Virginia are in the process of presenting their budgets for Fiscal Year 2023, which include proposed real estate and other tax rates and fees. So far, real estate tax rate proposals across Northern Virginia indicate rates will remain flat or decrease in the coming fiscal year. However, these proposals come amidst rising valuations, particularly for residential members, as we start to rebound from the pandemic. As a result, AOBA members are likely to see their taxes increase in the coming year.
A summary of proposed tax rates and fee schedules applicable to AOBA members are provided below. Fairfax County is expected to announce its budget proposal next week.
City of Alexandria
Alexandria City Manager James Parajon presented the proposed FY 2023 General Fund Operating Budget to the Alexandria City Council on February 15. The proposed budget would maintain the real estate tax at its current rate of $1.11 per $100 of assessed value. There are no tax rate increases proposed.
Although the City Manager proposed no change to the real estate tax, the City Council has requested two alternative budget options to consider if additional revenue is needed for other initiatives. These options, dubbed “Plan B and Plan C,” would propose one- and two-cent tax rate increases per $100 of assessed value respectively.
Notwithstanding the flat real estate tax rate, members are likely to see increased property tax bills. Multifamily properties saw an average increase in assessed values of 4.8%, while commercial properties, including offices, saw an average increase of 4.52% in assessed value. Commercial and multifamily properties comprise 39.3% of the city's tax base.
The City Council will hold work sessions throughout the spring to review the proposed budget with City staff. On March 8, a vote will be held on the advertised rate, which sets the cap on how high the real estate tax can be set. Budget adoption is set for May 4.
Click here to view the proposed tax rates and fee schedules for the City of Alexandria in Fiscal Year 2023.
Arlington County
Arlington County Manager Mark Schwartz proposed his FY 2023 budget to the County Board on February 12. The proposal includes a flat real estate tax rate of $1.013 per $100 of assessed value, which means members will not see an increase in their property tax rate for the second consecutive year. The Board voted to advertise that flat real estate tax rate on Tuesday, February 15. By law, the Board cannot set a higher tax rate than the one it advertises.
Although the real estate tax rate will not increase, members with residential interests may expect to receive higher property tax bills due to increased assessments. According to the budget proposal, apartment real estate values increased by an average of 2.9% this year. On the commercial side, office property values decreased by 9.6%, so commercial members may see smaller property tax bills.
While rates for BPOL, electricity, gas, and Business Improvement District (BID) taxes are set to stay level, the proposal increases base and usage rates for water. Base rates will rise by 32 cents for both multifamily and commercial properties, with usage fees increasing by 31 cents per 1,000 gallons for multifamily residential properties and 34 cents per 1,000 gallons for commercial properties.
Similar to last year, the County Manager’s budget focuses on housing support, maintaining $14.3 million in housing grants, and increasing funding for permanent supportive housing by $588,000 to $3.7 million. The budget also includes an 8% increase, or $23 million, in housing choice voucher funding and $16.9 million for the Affordable Housing Investment Fund (AHIF), $8 million more than in FY 2022.
Click here to view the proposed tax rates and fee schedules for Arlington County in FY 2023.
Loudoun County
Loudoun County Administrator Tim Hemstreet presented his proposed budget for FY 2023 to the Loudoun County Board of Supervisors on February 9. The budget is balanced at a real estate tax rate of $0.895 per $100 assessed value, which is 8.5 cents below the current tax rate.
The tax rate was advertised, however, at a rate of $0.915 per $100 assessed value. This was done to allow the Board flexibility, particularly to consider funding a $21.5 million gap between the proposed allocation to Loudoun County Public Schools and the School Board’s adopted budget. Virginia law dictates that the Board may not adopt a rate higher than that advertised.
The proposed budget also decreases the business personal property tax rate by 5 cents to $4.15 per $100 assessed value. However, it included an option for no decrease in the personal property tax rate and so was advertised at $4.20 per $100 of assessed value. The proposed budget holds constant all other taxes and fees paid by AOBA members.
Despite the proposed decline in the real estate tax rate, commercial property (including apartments) saw an increase of 24.55% this year in assessed valuation, of which 20.99% resulted from revaluation following mid-pandemic lows and 3.56% was due to growth. The County has not broken out valuation changes amongst apartments, offices, and other commercial properties, but the overall growth rate means that AOBA members may still expect increases in tax bills this year.
Click here to view the proposed tax rates and fee schedules for Loudoun County in Fiscal Year 2023.
Prince William County
Acting County Executive Elijah Johnson has presented the proposed FY 2023 General Fund Operating Budget to the Prince William Board of County Supervisors. The proposed budget would reduce the real estate tax to $1.05 per $100 of assessed valuation, down from its current rate of $1.115 per $10 of assessed value. The Board voted to advertise a real estate tax rate of $1.05, which is the highest tax rate that can be set under law.
The proposed budget raises the business tangible computer and peripheral tax rate to $1.65 per $100 of assessed valuation, up from the current rate of $1.50. There are also proposed increases in the stormwater management fee of $3.54 per year and $4.72 per year for multifamily and commercial properties, respectively.
Prince William County is still in the process of finalizing its real estate assessments and expects to mail reassessment notices to property owners in late February or early March. That said, the County expects real estate tax revenue to increase notwithstanding the proposed decrease in the tax rate, so AOBA members may see an increase in their actual tax bill.
The Board of County Supervisors will hold work sessions throughout the spring to review the proposed budget with County staff. Budget adoption is set for April 26.
Click here to view the proposed tax rates and fee schedules for Prince William County for Fiscal Year 2023.