Maggie Schwind, is a third generation Falls Church City resident married to David Schwind, a second generation FCC resident. Both Maggie and David want to continue to live in Falls Church City throughout retirement, but increasing real estate taxes are a major concern to them and should be to others. David and Maggie obtained housing data from the Real Estate Assessment Office and have generously shared their analysis with the community. Here is the Schwind’s analysis:
“Starting from the data that was obtained from the Real Estate Assessment Office, I was able to put together a couple of pieces. The first being the number and value of assessable properties for both Residential and Commercial in the City (see chart below). For purposes of this exercise, Residential property includes Single Family, Condominium and MultiFamily.
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Assessable Property |
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Type |
# of Properties |
% of Properties |
Value of Properties |
% of Value |
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|
Residential |
4,159 |
90.6% |
3,215,939,700 |
80.2% |
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|
Commercial |
430 |
9.4% |
792,162,400 |
19.8% |
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|
Total |
4,589 |
100.0% |
4,008,102,100 |
100.0% |
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What this tells us is that there are 4,589 properties in the City that have real estate assessments on them. Of this number, almost 91% are Residential. From a value perspective, the Commercial properties are carrying a higher proportion share then their number of properties would dictate. Please note that the total value of properties, $4,008,102,100, is off slightly from the number displayed on the official City website by about $101,500 (the City has a higher number).
I did a couple of things with the Residential data. One of the files we got from the City has a column called “Sales 1 D” in it. This column has the most current date that the property was sold. Each property location has a unique PIN identifier. I was able to use the “PIN” column to merge the assessment value data with the sold date. Using this I was able to determine that the average length of time that a residential property has been owned in the City is 14.6 years. Also using the data I was able to come up with chart showing length of ownership in 5 year chunks (see chart below).
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Residential Assessed Property – Time Period Owned |
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Time Period Owned |
# of Properties |
% of Properties |
Value of Properties |
% of Value |
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|
0 to 5 years |
1,159 |
27.9% |
843,110,300 |
26.2% |
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|
06 to 10 years |
535 |
12.9% |
404,995,300 |
12.6% |
||
|
11 to 15 years |
778 |
18.7% |
493,116,800 |
15.3% |
||
|
16 to 20 years |
565 |
13.6% |
579,954,700 |
18.0% |
||
|
21 to 25 years |
389 |
9.4% |
280,775,600 |
8.7% |
||
|
26 to 30 years |
235 |
5.7% |
171,326,000 |
5.3% |
||
|
31 to 35 years |
171 |
4.1% |
133,437,300 |
4.1% |
||
|
36 to 40 years |
107 |
2.6% |
66,156,100 |
2.1% |
||
|
41 to 45 years |
62 |
1.5% |
121,938,900 |
3.8% |
||
|
46 to 50 years |
27 |
0.6% |
18,377,900 |
0.6% |
||
|
Over 50 years |
38 |
0.9% |
29,807,800 |
0.9% |
||
|
UNK† |
93 |
2.1% |
72,943,000 |
2.4% |
||
|
Total |
4,159 |
100.0% |
3,215,939,700 |
100.0% |
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|
† The Sales Date field was either 1/1/1900 or unpopulated |
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This tells us that while the average length of ownership is 14.6 years that there is over a quarter of the City’s residences have been owned 5 years of less. And over 40% of the City’s residences have been owned 10 years or less. I don’t know how this compares to other jurisdictions but there seems to be a fair amount of turnover.
Then I took a look at the City transfer for the Schools and how that relates to Residential Properties.
Based on the data I was able to find on the Falls Church City Schools website and the City of Falls Church website regarding the FY18 Budget, the amount that the City is transferring to the schools per student is almost $15,000 (see chart below).
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FY 2018 City Transfer per Student Cost |
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Budgeted School Transfer for FY 2018† |
41,148,000 |
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Projected Students ‡ |
2,760 |
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Transfer per Student |
14,909 |
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† Operating Fund of $41,040,500 and Food Services of $107,500 |
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‡ Per Budget Operating Fund Document |
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Using the Residential property data from above, the average property in the City is paying a little over $10,000 in real estate property tax (see chart below). So the average Residential property pays in less than it costs to educate the average student.
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Value of Residential Properties †† |
3,215,939,700 |
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|
Total Number of Properties †† |
4,159 |
|||
|
Average Value of Residential Properties |
773,248 |
|||
|
Real Estate Tax Rate per $100 |
1.33 |
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Average Tax Revenue per Residential |
10,284 |
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†† Data provided by the City on June 2, 2017 |
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There are all kinds of disclaimers that go here because obviously not every property has a student living there and some properties can have more than one.
Taking the average FY18 Transfer Cost and using that as a baseline the cost of a full education cycle (K-12) for one student is approximately $194,000. The average tax revenue for that time period would be $134,000 for one residential property. I have excluded increases in costs and taxes for this exercise. So over the full education cycle the cost to the City of funding a single student is more than the City will take in revenue from the residence that student resides in. In fact it would take almost 19 years to cover the cost of an education. Since the average residential property turns over every 15 years, the full cost will not be borne by the residence that the student came from.
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At FY 2018 average cost of educating a student from kindergarten through High School (13 years) |
193,817 |
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Tax Revenue value of 13 years at FY 2018 average per Residential Property |
133,692 |
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Variance: Average Cost of Education versus Average Tax Revenue |
60,125 |
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Number of Tax Years needed to fully fund 13 years of Education |
18.85 |
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Average Length of Ownership †† |
14.55 |
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Variance: Fully Funded Education versus Length of Ownership |
(4.29) |
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†† Data provided by the City on June 2, 2017 |
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This means that the Residential properties without students are subsidizing (heavily?, moderately?) the school system. You can see this from a City wide perspective (see chart below), the Residential sector in total covers the City transfer to the School System (almost to the exclusion of funding anything else in the City).”
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Budgeted School Transfer for FY 2018† |
41,148,000 |
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|
Value of Residential Properties †† |
3,215,939,700 |
|||
|
Real Estate Tax Rate per $100 |
1.33 |
|||
|
Tax Revenue for Residential |
42,771,998 |
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† Operating Fund of $41,040,500 and Food Services of $107,500 |
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†† Data provided by the City on June 2, 2017 |
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Good data. I am in the same situation having lived here for 50 years. Good luck if you are trying to remain in your current home. If you do choose to continue to live here, be prepared to pay your much higher taxes and have far less disposable income that you would like to have to enjoy during your retirement years.
We know folks do move here for the schools. But once they are through with the school system, maybe retire, they leave and another family cycles through. Thus the City is becoming more and more of a transient jurisdiction, and instead of being a full fledged city with emphasis on services for all residents and taxpayers, it resembles more of a school district. To live here in your current home for years and years is no longer feasible for most when your income becomes fixed or stagnant. But wait, there is a solution. You can move to one of the future railroad cottages that the city is touting as a fantastic option. Only problem is that you are going to pay $700 thousand for one, and still pay the high and taxes that are about to get much higher given the bond referendum being considered.
It’s a shame that we chase people out of the city after their kids graduate. That’s when we need them the most. However, I understand that they don’t wish to pay the higher taxes so they move to a jurisdiction that offers them the same or more services at a much lower rate.
If you just cross over the Falls Church City line, house prices are cheaper and so is the tax rate.
It used to be that the schools had a unique offering, but they are growing (losing their small-ish size), they are trying to incorporate too many programs for the school size, and their educational outcomes (where kids go to college and what they do after graduation) is no better than the neighboring jurisdictions.
Falls Church City used to be a special place but with all the development, schools getting mediocre and taxes increasing, there are better alternatives.
Maybe this is a wakeup call to the citizens and leadership in Falls Church City.
Every citizen must foot the cost of public education. It’s our duty and the students’ right to be educated. This was Mr. Jefferson’s dream. Choosing to live in thiis City requires financial planning. It is the cost of living in such a unique city with such a unique school system. In this instance, we live in a small city that needs a new school. Each citizen must weigh the costs and benefits of remaining here now as part of their wealth management/retirement strategy. If it doesn’t make sense over the long haul, then it’s time to move to a location that makes better sense financially. Residents who have lived here for a long time will then reap the rewards of their investment when they sell their house. Ultra aren’t, all such decisions are business decisions wrapped in emotion. Some will be able to stay and some will not. Reverse mortgages might work for some. Tax credits for those over a certain age and with a certain income might be a solution as well.
Dear Anonymous,
While I agree that we are to provide an education to our students, there is a limit to the financial responsibility we can do so. We must provide a solid education and spend the budgeted money to get the best educational outcomes. Does this mean we need to a brand new school to get a good outcome? No. Good instruction prevails over shiny new buildings. Is it nice to have a brand new building instead of a trailer? Of course, but a limited budget means that decisions have to be made to come up with reasonable solutions.
I would suggest that we can update our school and provide a good education without increasing costs to a point where city services and other infrastructure items suffer. The current situation indicates that the school operational budget goes up 4% each year. The city revenue goes up only 2.5% each year. There is a major shortfall and the only way to make up the difference is by increasing the real estate tax. At some point, even people with school-age children will find a substitute – Arlington or Fairfax schools because the premium to live here does not justify the benefits. We will have higher tax rates, more congestion from development, larger schools and crumbling city buildings, libraries and roads.
There has to be balance between the city and school side of the budget and their needs to be a lower cost option to fix the current school situation.
Anonymous,
Not sure why you can’t state your name, this is the time for masks off and open discussion. I realize the limits of mine and my children’s Falls Church City school experience and education. Anonymous, I will go out on a limb and guess that you have children in the system, have been here less than 15.4 years and plan to pop smoke and skedaddle