A study of real property taxes showed assessments for multi-family residential properties have declined for the first year since 2010.
Multi-family buildings like apartment complexes are classified under commercial real estate rather than residential real estate.
It’s a concerning sign for the City of Alexandria’s budget, with appraisers noting that the value of multifamily properties has often buoyed commercial property values even as the office market collapse dragged it down in recent years.
For many Alexandrians, though, it could mean a more favorable market for renters.
Appraiser Supervisor Annwyn Milnes told Alexandria’s City Council in a meeting earlier this week that the commercial property market is particularly volatile.
“Many changes to commercial tax base were softened by an increase in value to multifamily properties, but this is the first year since 2010 that multifamily saw a decline,” Milnes said.
Multi-family residential property assessments decreased by 2.26% this year.
General commercial assessments decreased by 2.12% and office buildings, the anchor dragging down the commercial property market, dropped by 12.38%.
Warehouse assessments slightly increased, by .47%, while hotels increased from a rough patch by 4.32% and shopping centers increased by 3%.
Alexandria isn’t alone; the multifamily residential market could be struggling — though, fortunately, that could also mean lower rents.
Director of Finance Kendal Taylor said the city saw significant new construction in apartments two years ago. Last year, during the Zoning for Housing discussion, regional housing experts noted that the city’s supply of apartments hadn’t been keeping up with the demand, which was keeping rental rates unaffordable for many Alexandrians.
“Rents are low, and that’s good for our community,” Taylor said. “That’s not necessarily good for income, but the apartments will settle in.”