Land Use, Property Taxes, Funding Schools in Albemarle County

Following up on Joe’s excellent story last week about funding Albemarle County (but specifically Crozet schools), a reader asked a question. I don’t know a lot of answers, but I often know whom to ask. This is meaty, boring, super-important stuff about how our County government runs, and how we pay for important stuff.

I don’t have a good summary, other than, please take the time to read, or at least skim, the information below. Land use taxation affects all facets of our community, as property taxes comprise such a significant portion of the Albemarle County budget. That, and I’m glad to know so many people who know much more than I do.

A reader asked

Jim – Quick question as to an issue I wonder if you have every looked into during your years of civic research.   I wonder how much of the land in the County, outside of development areas is qualified under “land use” taxation for agricultural, forestal, open area or horticultural taxation benefits, and what the cumulative effect of this land use tax benefit/tax loss to the County “costs” the County each fiscal year.   
Food for thought.

Chapter 26 – Related Land Use Laws

So I asked a friend who knows more than I do

But first, he asked the County Assessor for a breakdown of the Albemarle County acreage that is in land use.

We have a total of 214,798 acres under land use taxation in the county in 2019.
It is broken up as follows:

– 131,892 Forestry
– 67, 840 – Agriculture
– 2,471 – Horticulture
– 12, 594 – Open Space

Above is from Peter Lynch, Albemarle County Assessor

Great question.   It’s been a while since I’ve run that report so I’ll have to dig into the Albemarle GIS and see what I can find.  Of course, I find this new GIS system way more obtuse than the last one so it may take me a while.   Many of the points made in the Hook in 2003 about land use are still true, although the numbers have undoubtedly changed dramatically.

Here’s my “off the cuff” answer though regarding the value of the land use program…  It’s a mixed bag.  Over time, the use of land is determined by what is most profitable use of the land.   For existing property owners, land use makes keeping farmland less expensive and therefore makes it more profitable to continue to use one’s land for forestry or farming.  If someone owns a big estate, it also increase the odds that they’ll want to lease land to a farmer because they can get a sizable discount for doing so.   That said, it raises property values for buyers, particularly since a few “bad apples” among real estate agencies will sell a property with land use as a amenity (without mentioning that it comes with responsibilities).      So if you are a young farmer looking to relocate to Albemarle, land use actually makes it harder to find any land you can afford and still make a living.   It’s also caused a shift in the County from farmer that own their own land to more farmers renting land.  

The County does benefit from land use because as Sally Thomas used to say “Cows don’t go to school…”, the idea being that as long as it stays farmland then the County saves money on infrastructure it might otherwise need to build  …except sometimes its not true..   Let me explain… there is a trend in Albemarle of 21 acre “farmettes” that no one in their right mind really considers a farm.  It’s basically a subdivision looking to dodge stream buffer and other requirements and pay less taxes.  Those faux farms often do require infrastructure like roads, schools. fire departments, etc.  Plus they have a negative impact on water quality since as “agriculture” they dodged many of the County’s environmental rules. They are are usually McMansion style homes with vast lawns and roofs that generate storm water that pollutes local waterways.  Other taxpayers are then put in a position of cleaning up those stream once they become impaired, like the Hardware River.    The good news is since the county has started re-validation, they’ve been able to eliminate most of the worst situations where people were just playing the system.    There is still abuse out there, but nothing like it was.  Of course, many new homeowners that were told by their agent that land use “came with” the property have had a rather rude awakening when they find out that they own five years back taxes!   

The County also loses a significant amount of money on land use too because of revenue sharing.  When the revenue sharing agreement was created, we didn’t have a growth area and a rural area and it never took land use into account.   So, we pay the city more on properties in land use then we get in taxes.  Overall, it amounts a penalty of millions of dollars.  Even odder, the way the agreement is structured, the more properties we remove from land use and develop, the LESS we pay the city. So far it’s dropped from 18.4 million to 14.2 million.  It’s kind of a perverse sprawl incentive that really isn’t in either locality’s best interest. 

Of course there is a better tool without all these problems…  Conservation easements.   When a property goes into land use the “sprawl penalty” goes away and the land is permanently protected so those cows will never go to school.    From a taxpayer perspective, easements are the best deal for the County.   I think the best way that one can think of land use is that it’s an imperfect temporary solution until we can either get that property into conservation or it is developed and turned into something else.  A big problem with land use is that it is a phenomenally regressive tax that means that the people that the wealthiest people in the County, pay far less taxes as a percent of their property value than your average resident of Crozet.  As some point I predict that will become unsustainable, with urban residents becoming unwilling to shoulder the tax burden of farmers who are unwilling to put their land into permanent protection.  

And more from the original questioner

He emailed the County assessor

Dear County Assessor’s Office –  I was reading Chapter 26 in the County Attorney’s Office Land Use handbook, and specifically the sections relating to “land use” valuation versus “fair market” valuation.

Are there statistics available for review which show the metrics for current land use taxation benefits (to owners) and revenue losses (to the County) from land use valuation under the four enumerated categories of agriculture, open area, horticultural and forestall uses?

More particularly, is there a map  or GIS overlay showing the parcels qualifying under land use for reduced tax valuation?   Is there aggregate acreages for qualifying parcels and is there a dollar figure both in gross valuation differences between FMV and land use values and a corresponding aggreage tax benefit number that could be provided?

And the Assessor responded

The two attached documents provide some information on the deferrals for land use.  The first is a pdf of the summary pages from the 2019 Land Book.  It will show the total taxable and the deferral amounts in Value and taxes.  The second is a spreadsheet of all individual land use properties in 2019 and the deferral amounts.  The spreadsheet shows slightly different numbers because they include adjustments made after the land book is published.

There is no layer in GIS of the properties under land use.

Attached documents

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2 Replies to “Land Use, Property Taxes, Funding Schools in Albemarle County”

  1. Jim,
    Very good article on this complicated topic, Over the years my view of land use has evolved to where I can now say I would continue to support land use. That said, your concerns expressed are not unfounded. In his report Bob Tucker, the former County Executive, wrote in his review of Land Use the following:

    “The cost of land use is not a hidden fact, since it is implicit in the concept of land use taxation that the tax burden is shifted to other taxpayers. Property that is ineligible for use value taxation does bear a greater share of taxes as the result of having a land use program. It is also implicit in the land use concept that the redistribution of the tax burden is in the public interest both to the direct beneficiaries of land use and to the other taxpayers who derive indirect benefits from land preservation. Although only eligible land use properties derive a monetary benefit from land use, it can be argued that all county residents receive intangible benefits via their proximity to rural land, open space and woodlands.”

    As I mentioned my view of land use has changed over the past 30 years here in Crozet. I firmly believe that any extra taxes I may pay to maintain the land use program is well spent. Over those 30 years every time I visited family living in eastern Long Island I would see what could potentially happen to Albemarle County. Not only has there been the continued loss of rural land, but also the continued complaints from friends and relatives about road congestion and increased taxes. Land use may not be perfect, but I am firmly convinced that the amount of taxes I currently pay would be much higher and the quality of life here in Albemarle much lower without it.

  2. wow that is refreshing to see – someone who admits that their view of this very complicated matter has COMPLETELY changed. Bravo for admitting it and thank you for evolving your view, Tom !
    Land use is tough but key if you don’t want to tax people out of their farms – if you adopt the growth area model like we have – land use for rural is key. However what I do think is poor is how every two years the county forms are more and more complex and change each time I fill them out. I really feel for our older residents. Shame on the county for making this harder than it should be ! Cows don’t go to school and over 60% of our tax dollars is for schools.

Something to say?