Virginia At Issue - May 2021
Mask Mandate Lifted, COVID-19 Restrictions to End May 28
Virginia Governor Ralph Northam announced last week that Virginia is lifting its universal indoor mask mandate to align with new guidance from the federal Centers for Disease Control and Prevention (CDC). Virginians will no longer be required to wear masks in most indoor settings, except on public transit, in health care facilities and in congregate settings. Employees of certain business sectors – including restaurants, retail, fitness, personal care, and entertainment – must continue to wear masks unless fully vaccinated. Businesses retain the ability to require masks in their establishments.
All remaining mitigation restrictions on capacity and distancing in businesses and public spaces will be ended on Friday, May 28, two weeks earlier than previously announced.
The state of emergency, to which the requirement for housing providers to work with tenants to secure rental assistance is tied, will remain in place through at least June 30.
Click here for the full text of Seventh Amended Executive Order Seventy-Two and Order of Public Health Emergency Nine, rolling back the universal mask mandate effective May 15.
Click here for the full text of Executive Order Seventy-Nine, ending distancing and capacity restrictions effective May 28.
General Assembly Planning Summer Session to Allocate Federal Funds
Leadership of the Virginia General Assembly is eying the end of July for a special session to determine how to allocate federal American Rescue Plan dollars. This would be the third special session called since the COVID-19 pandemic began last March. Speaker of the House of Delegates Eileen Filler-Corn has indicated thatthe House will return to convening in-person. It is expected that the House and Senate will additionally vote on judicial nominations. It is not yet known at this point whether the scope of the special session will be expanded beyond those items or what the duration of the special session may be. If the scope of the special session is expanded to include items related to broader pandemic response, as the previous special sessions were, AOBA members can expect to again be on the defensive against harmful proposals related to general business and labor issues as well as eviction prevention measures.
Virginia is set to receive more than $4.3 billion in federal assistance through the American Rescue Plan. Another $2.7 billion will be allocated to Virginia localities, bringing the Commonwealth’s total up to around $7 billion. This is on top of the $3.2 billion in CARES Act funding Virginia has already received.
Earlier this month, Governor Northam released a joint statement with leaders of the Democratic majority caucuses of the House and Senate, outlining shared plans and priorities for the funding. Federal guidelines dictate that the funds must be used to respond to acute pandemic-response needs, to fill revenue shortfalls, and assist communities hardest hit by COVID-19. The Governor and House and Senate Democratic leaders identified five specific needs to which they plan to target spending:
- Public health (upgrading state and local public health services and help people with the cost of housing and utilities)
- Small businesses (funding the Rebuild Virginia small business recovery plan, augmenting relief dollars for the hardest-hit industries, investing in tourism and investing in industrial revitalization)
- Workers (Infuse new dollars into the Unemployment Trust Fund and upgrade computer systems and staff for the Virginia Employment Commission)
- Public schools (modernize public school buildings, including rehabilitating and upgrading existing facilities, improving air quality and HVAC systems, and improving safety)
- Broadband (fully deploy broadband across Virginia)
Virginia Housing Commission Sets 2021 Study Agenda
The Virginia Housing Commission met virtually on April 14. The Commission received presentations from the Brookings Institute and the Virginia Realtors regarding forecasts for Virginia’s housing market in a post-COVID environment. Additionally, the Commission set its work plan agenda for the legislative interim.
Over the last several years, numerous bills affecting AOBA members have been routed through the Commission for vetting prior to being introduced for the consideration of the full General Assembly. The Commission’s work product has been heavily focused on preventing evictions. This year, the Commission will take on a much lighter load, having identified only five study topics for 2021. The Commission agreed at its meeting to study:
- The rise in homelessness associated with the COVID-19 pandemic
- Mandating changes to local affordable dwelling unit (ADU) programs to provide for housing to accommodate lower levels of area median income (AMI) in proximity to Metrorail/transit stations
- Progress and potential changes to Virginia’s land bank program
- Overhauling Virginia’s real estate disclosure and disclaimer laws
- AOBA legislation introduced in 2021 to stipulate required language on unlawful detainer forms informing defendants that they may not be retaliated against by an employer for appearing in court in response to a summons for unlawful detainer
The Commission has not yet established a schedule of meetings for the 2021 legislative interim, but it is expected to convene again in July.
Rental Assistance Update
Throughout the ongoing state of emergency related to the COVID-19 pandemic, housing providers in Virginia are required to work with tenants who are unable to make their rent payments to apply for rental assistance. Housing providers may apply on behalf of tenants for rental assistance, including any arrearages dating back to March 2020, via the Virginia Rent Relief Program. From February 11 through May 5, the program has processed 20,225 applications and dispersed $124,641,875 in direct assistance to housing providers. Another $27,603 in payments are currently pending. On top of that, the program still has $823,808,578 in remaining available funds for rental assistance going forward.
Fairfax County has recently stood up its own rental assistance program for properties located within the County. AOBA recently hosted a virtual town hall with County staff to answer member questions regarding the program. A recording of the event can be accessed by clicking here.
Republicans Select Nominees for Statewide Constitutional Offices
In an “unassembled convention” held at multiple voting locations across the Commonwealth on May 8, the Virginia Republican party selected its nominees for the three statewide Constitutional offices of Governor, Lieutenant Governor, and Attorney General. The Republican ticket will consist of former Carlysle Group CEO Glen Youngkin for Governor, former Delegate Winsome Sears for Lieutenant Governor, and Virginia Beach Delegate Jason Miyares for Attorney General.
The Virginia Democratic party will hold a primary on June 8 to select its nominees. This year’s election ballot will feature contests for all 100 seats of the Virginia House of Delegates as well as the three statewide Constitutional offices.
With the decennial census count delayed, Virginia’s redistricting process is also behind schedule. As such, it is anticipated that Delegates will run for reelection in their current districts this year, and then again next year in redrawn districts. Delegates and Senators would then return to the normal odd-year election cycle, running in 2023. That would mean back-to-back-to-back election years in Virginia.
AOBA’s Virginia Metropolitan Political Action Committee works to influence the outcome of Virginia elections, supporting those candidates and elected officials whose policy platforms and voting records align with the industry. This year, the PAC will disseminate more than $25,000 amongst more than 40 candidates statewide and locally in Northern Virginia. However, with more than 60 declared candidates for the three Constitutional offices, the PAC deferred action/endorsements on the statewide contests until after the Republican and Democratic primary elections.
Real Estate Taxes Remaining Flat or Declining Across Region
Real estate tax rates across Northern Virginia will remain flat or decrease in the coming fiscal year. This will bring reprieve for AOBA members with commercial interests since commercial property assessments have also declined in each of the five major jurisdictions. Multifamily residential properties, on the other hand, may see flat or even higher real estate tax bills next year in spite of the localities reducing rates. Amid the COVID-19 pandemic, multifamily residential property values have continued to increase in most jurisdictions.
A summary of adopted tax rates and fee schedules applicable to AOBA members is provided below.
City of Alexandria
The Alexandria City Council unanimously adopted the Fiscal Year 2022 General Fund Operating Budget of $770.7 million, which represents a 2.3% increase from the FY 2021 budget. The adopted budget reflects a two-cent decrease in the real estate tax rate from its current rate of $1.13 to $1.11 per $100 of assessed value. There are no other tax rate increases.
Members with commercial interests in the city should expect to receive decreased property tax bills due to lower assessments. Commercial properties saw an average 1.96% decrease in assessed value compared to an increase of 2.8% in 2020. The multifamily rental sector saw an increase of 3.53% on average, including $110.1 million in new growth. As such, members with residential interests in the City may still see a slight increase in tax bills in spite of the cut in the real estate tax rate. Commercial properties, including multifamily apartments, comprise 40.6% of the tax base.
Click here to view the adopted tax rates and fee schedules for the City of Alexandria in Fiscal Year 2022.
Arlington County
The Arlington County Board voted unanimously to adopt a $1.4 billion budget for Fiscal Year 2022. The adopted budget keeps the base real estate tax rate flat at $1.013 per $100 of assessed property value while investing in ongoing COVID-19 pandemic relief efforts and housing affordability.
The adopted budget increases the dedicated stormwater tax to 1.7 cents per $100 of assessed value from 1.3 cents. This is the first increase to the stormwater tax in a decade. Arlington County approved a $50.84 million bond referenda in November 2020 to fund projected needs for stormwater infrastructure improvements. The stormwater tax rate increase will fund the debt service on bonds.
Other adopted fees include increases to water service connection charges, meter installation charges, an increase to the Infrastructure Availability Fee (IAF) by $30, and an increase in fire system testing fees from $162 to $175 per hour. There are no additional increases to the Business Improvement District (BID) tax rates for Fiscal Year 2022.
Although the real estate tax rate will stay unchanged, members with residential interests may expect to receive a higher property tax bills due to increased assessments in the past year. According to the County Manager’s budget presentation, residential real estate values increased by an average of 5.6% this year. On the commercial side, members may see lower tax bills as commercial real estate values dropped an average of 1.4%.
Additionally, the adopted budget focuses on housing support by reducing tenants’ income contribution towards rent from 40% to 30% for the Housing Grants Program. The total FY 2022 funding for housing grants totals $14.2 million and adds $592,000 to permanent supportive housing. The budget also includes $21 million in funding for housing choice vouchers and $16.9 million for the Affordable Housing Investment Fund (AHIF). It extends the payment waiver for AHIF loans through December 31. A total of $5 million of the $17.5 million FY 2022 COVID contingency fund is allocated for eviction prevention purposes.
Click here to view the adopted tax rates and fee schedules for Arlington County in Fiscal Year 2022.
Fairfax County
The Fairfax County Board of Supervisors approved the Fiscal Year 2022 budget, which decreased the real estate tax rate by one cent to $1.14 per $100 of assessed value. The budget also devotes a half-penny of the real estate tax for affordable housing needs which is in addition to the more than $10 million allocated for new affordable housing and preservation in the Department of Housing and Community Development’s $145 million total budget.
AOBA members will likely see reduced real estate tax bills as a result of the reduced tax rate, combined with declining commercial property assessments. Nonresidential real estate values, including commercial, industrial, and multi-family residential properties, dropped by 4.05 percent on average. The percentage of the 2021 base real estate assessment attributable to commercial and industrial property is 18.17 percent and multi-family residential properties comprise an additional 7.50 percent. The overall office vacancy rate was 15.5 percent at year-end 2020, up from 14.3 percent recorded at year-end 2019.
Click here to view the adopted tax rates and fee schedules for Fairfax County in Fiscal Year 2022.
Loudoun County
The Loudoun County Board of Supervisors approved its Fiscal Year 2022 budget totaling approximately $3.3 billion, effective on July 1. The adopted budget includes a real property tax rate of $0.980 per $100 in assessed value, 5.5 cents lower than the current tax rate. The adopted budget includes no tax or fee increases for AOBA members.
The adopted budget also includes County operating and capital subsidy payments to the Washington Metropolitan Area Transit Authority. These payments are due to the projected start of Metrorail’s Silver Line revenue service in Loudoun County during fiscal 2022.
The real estate tax reduction will likely result in decreased property tax bills for members with commercial interests in the County. The total value of taxable commercial property in the county is $18.6 billion, a decline of 5.7% compared to 2020. For members with residential interests, however, the lower real estate tax rate may be offset by increased residential multifamily real estate values, which rose by an average of 4.8% this year compared to last year.
Click here to view the adopted tax rates and fee schedules for Loudoun County in Fiscal Year 2022.
Prince William County
The Prince William Board of County Supervisors voted to adopt the Fiscal Year 2022 budget, which decreases the real estate tax rate by one cent to $1.115 per $100 of assessed value. The budget comes with a $1.02 billion six-year Capital Improvement Program (CIP), with $224.8 million designated for the upcoming fiscal year. 75 percent of CIM expenditures are allocated toward transportation projects, including congestion relief and safety improvements in the County.
An increase of 15 cents in the personal property tax on computers and peripheral equipment was adopted, taking the levy to $1.50 per $100 of assessed value. This applies to all businesses but will primarily affect data centers. The Board adopted a significant increase of 10 cents in FY 2021 as well.
Although the real estate tax rate will decrease, residential members may expect to receive a higher property tax bills during the COVID-19 health and economic crisis due to higher assessments in the past year. According to the budget presentation, residential real estate values increased by an average of 7 percent. On the commercial side, members are likely to see lower tax bills as commercial real estate values dropped an average of 4.5 percent.
Click here to view the adopted tax rates and fee schedules for Prince William County in Fiscal Year 2022.
Arlington Announces Funding for Affordable Housing Development
Arlington County has announced a Notice of Funding Availability (NOFA) for Fiscal Year 2022 (July, 2021 – June, 2022) for the development and/or preservation of affordable rental housing. Projects that are eligible to use Federal HOME and/or CDBG funds will be able to utilize additional local funds. The County anticipates thatthere will be approximately $18 to $21 million in County loan funds available through this initiative.Eligibility
Staff will accept and consider proposals from applicants for projects that meet the following eligibility requirements:
- Applicant has owned or developed at least one development that contains committed affordable (CAF), income-restricted, or market rate housing units thathave been placed in service.
- The Federal and local loan funds must be used for rental units affordable up to 80% of Area Median Income (AMI).
- CAF units must remain committed affordable for no less than 30 years.
- Applicants that propose the use of Federal CDBG and HOME funds must meet certain timeliness requirements.
Register Today for Beyond the Vine, A METPAC VA Fundraiser
AOBA members are invited to attend an in-person fundraising event to support AOBA’s Virginia Metropolitan Political Action Committee. Beyond the Vine is an exclusive event for AOBA Members. Attendees will enjoy sipping boutique wines, gourmet food, and networking on a beautiful rooftop overlooking Crystal City and the national mall. Only a limited number of tickets are available.Additionally, the program supports a worthy cause. Virginia’s shifting political landscape has given traction to aggressive policies seeking to layer additional costs and regulatory burdens on commercial and multifamily property owners and managers. AOBA is our industry’s line of defense against such onerous and destructive policies.
METPAC VA supports AOBA's advocacy program by financially supporting candidates who understand the importance and contributions of the industry. Over the past several years, the METPAC VA has donated over $100,000 to scores of candidates for state and local offices. Since 2021 is an election year, we must continue our robust efforts to promote public policy and elect candidates to public office who understand the issues facing building owners, operators, and developers.
Already, several dignitaries have confirmed to attend, including:
- Delegate Charniele Herring, House Majority Leader
- Delegate Rip Sullivan, Chairman of the House Democratic Caucus
- Delegate David Bulova, Chairman, House Committee on General Laws
- Delegate Marcus Simon, Chairman, General Laws Subcommittee on Housing/Consumer Protection
- Delegate David Reid
- Chairman Jeff McKay, Fairfax County Board of Supervisor