Thursday, March 20, 2008

Cooking The Books

(All emphases by Always On Watch)

The Fairfax County real-estate assessors deny any cooking of the books, of course. But many of us residents don't believe the county's official explanation: the application of new "appraisal theory," never mind that nobody — neither residents nor county officials — seems to have a clear understanding of the so-called theory being applied.
The original 2008 assessments arrived several weeks ago and shocked property owners, who, with the downturn in the real-estate market for both houses and land, were expecting an overall reduction in the county's assessment of their property. Instead, even though the values of structures were reduced for nearly every homeowner, the assessed value of the lots was raised proportionately, thus making the 2007 and 2008 assessments identical in most cases — including my own.

This article in the March 20, 2008 edition in the Washington Post provides the details about Fairfax County's juggling of the numbers:

Fairfax County will begin mailing revised 2008 property assessments to about 180,000 households today, moderating the steep cuts in land values that triggered a furor when the first set of notices went out last month.

The revisions will not change overall real estate assessments, which have squeezed residential property values down by an average of 3 percent countywide.

But county officials said the adjusted notices will address what in many cases were dramatic swings in how values were allocated, with houses plunging and the soil under them surging.
The following example is representative of what happened with the original 2008 assessments:
In one instance, a three-bedroom house in McLean assessed at $266,590 in 2007 was valued by the county this year at $63,930, a drop of 76 percent. The lot, placed at $301,000 last year, soared 66 percent to $501,000. ...
A $200,000 house in McLean, one of the most desirable and most prosperous locations in Fairfax County, would be a rare find.

In my own case, the value of my house on the original 2008 assessment dropped to $88,000. I haven't seen ANY house in Fairfax County priced at $88,000 for decades! Respectable garages this close to Washington, D.C., cost more than that amount! As a basis for comparison, in 2007, my house had been assessed at $160,000 — a value determined before any of the recent improvements made to the property here.

This part of the Washington Post article is particularly amusing:
Officials sensed that they had an incipient debacle on their hands the morning of Feb. 25. That was the day County Executive Anthony H. Griffin presented his proposed budget for fiscal 2009 to the board, and new residential assessments were posted on the county Web site.

Officials also released, as is the custom, residential assessments for supervisors and other top county officers. When Greenlief saw that the overall housing assessment for Supervisor Linda Q. Smyth (D-Providence) had tumbled 22 percent and that a vacant lot owned by Chairman Gerald E. Connolly (D) had appreciated by 45 percent, he pressed subordinates for more information.

At 7:20 a.m., he messaged David T. Stevenson, assistant director of his department's real estate division: "What's the per sq. ft value for Connolly's vacant land? Do you know the countywide average?"


...[A]nxiety about Connolly's reaction continued to reverberate through the Government Center.

"Just an FYI," Deputy County Executive Edward L. Long Jr. wrote to Greenlief and Coldsmith at 9:28 a.m. Feb. 26. "Word is the Chairman is not happy about the 46% increase on his land. You should get ready to explain when the call comes. Are we having fun yet???"

Coldsmith replied..."We needed some fun in our lives!"


...[T]here was internal disarray over how to best communicate the situation to supervisors and the public.

"Please help me to be less confused," Long wrote to Greenlief and Coldsmith on Feb. 27. "What is the plan????"
Perhaps, just perhaps, Chairman Connolly's reaction carries more weight these days. He is getting more than the usual amount of attention right now because he is running for the Democratic Party's nomination for the 11th Congressional District of Virginia.

Back to those cooked assessments. One thing led to another, and the county announced the new 2008 assessments — new assessments which will not change the earlier 2008 assessments, which will be identical to the 2007 assessments, even though few here can sell a home for the value listed on the assessment.

In neighboring counties, assessments have been significantly and realistically lowered. At the same time, real-estate tax rates have been raised, resulting in even higher real-estate tax bills for 2008.

Why am I reminded of a snippet from the lyrics of The Who's "Won't Get Fooled Again"?
Meet the new boss
Same as the old boss.

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posted by Always On Watch @ 3/20/2008 09:44:00 AM