Your Views: Density policies, high taxes raise housing prices

Your Views: Density policies, high taxes raise housing prices
Alexandria Housing Development Corporation

To the editor:

In a previous letter to the editor, I suggested the impetus behind proposed zoning changes to allow greater density in residential areas is primarily about city finances and tax revenue, not housing affordability. This supposition was reinforced by the Feb. 16 Alexandria Times article “Property assessments presented to council.”

The Times reported residential property assessments increased by more than 5% across the board, with the largest growth attributed to multifamily residential units. Notices of 2023 real estate assessments have already been sent to residents. What remains to be determined is the tax rate City Council will impose.

The bottom line is you cannot separate residential property tax from the housing affordability equation. Moreover, it is the only variable elected officials can directly control. Try as they might, municipalities cannot appreciably alter market dynamics.

The same novel approach being espoused to mitigate the affordable housing issue here failed to show appreciable results in California or Oregon. Yet many of our elected officials remain convinced Alexandria can achieve different results while implementing these same strategies.

Policy decisions of this magnitude should be based on empirical rather than theoretical data, particularly when there is substantive empirical evidence to the contrary. To suggest the empirical data does not apply because Alexandria is unique is sheer hubris, as market forces tend to be universal.

For Alexandria these include a desirable location, finite geography, disproportionate reliance on residential property taxes and an economy making it nearly impossible for most residents to earn wages within Alexandria commensurate with the cost of living. The average annual salary paid by Alexandria-based businesses is $81,000. The average annual salary required to live here is $105,000.

Fortunately, you don’t need to depend on being employed in Alexandria to live here. Case in point, many of our elected officials are employed outside of the city.

The lack of affordable housing will not be solved by changing zoning policy to promote more density. If past is prologue, developers will seek to maximize profit at rates the market will bear.

Our elected officials cannot dictate home prices, rents, wages, what people are willing to pay or who can move into or out of Alexandria. However, they have absolute authority over residential property assessment rates, a significant factor in housing affordability.

Choosing to move forward with zoning changes that favor more density plus raising residential property taxes while claiming to champion affordable housing is duplicitous. It’s time for city leaders to be above board.

The current residential property assessment demonstrates that higher density equates to increased potential tax revenue, with a residual negative effect on housing affordability.

Increased density combined with high residential property taxes is an antecedent for housing unaffordability.

-Roy Byrd, Alexandria