Editorial: Mixed Use Keeps Taxes Low

October 7, 2015 6:19 PM4 comments

Two of the candidates for the Falls Church City Council, as they confirmed in last week’s candidates’ forum at City Hall, are hanging their proverbial hats on a call for a “moratorium” on mixed-use development in the Little City.

But we’re not sure what taxpayers in the City think about that. It is clear that mixed-use projects have saved homeowners tons of money, almost any way you cut it. Those who would sow doubt about that have nothing but a sense – not backed up by the facts at all – that mixed use projects cost the City net revenue because of the added children that they bring to the school system.

This is simply not the case, and if certain citizens insist on this myth, they do so at the peril of seeing their taxes go up far faster than they otherwise would.

Six mixed-use projects that have been built since 2003 have generated a whopping $7.1 million in gross, direct, annual tax revenue to the City from real estate and personal property taxes and taxes generated in their buildings. According to a document issued by the City’s Economic Development Office, these projects contribute $38,688 in tax revenues for every year per pupil that lives in those buildings.

Since the cost of educating a child in the Falls Church School System now is $15,703 per child, then the mixed use projects are contributing to the City’s tax base a net surplus value of almost $23,000 per child.

(By contrast to this, almost two thirds of the pupils in the F.C. School System come from among the City’s 2,368 single family homes, according to the most recent numbers. Calculating the total taxes generated from these homes, they add up to $10,400 per year for every child who dwells in one of those single family homes. That means that the City is subsidizing every child attending the City’s schools to the tune of $5,303 per year).

First, new mixed-use projects generate far more revenue than all the students residing in them cost. Second, single family homes have to be subsidized by taxpayers to the tune of $5,303 for every child living in them.

What about this data is unclear? People can dispute the data, but on what grounds?

On top of this, mixed-use projects have also contributed some $3.4 million in cash so far for school capital needs as part of packages of “proffers” that each of them have provided the City.

Then there are other intangible benefits, such as the money spent by residents in the mixed use projects at businesses and restaurants in the City. There is a symbiotic relationship operating in mixed-use projects: more residents in the homes bring more money to the businesses downstairs. At a certain point, a critical mass is reached, and the businesses thrive.

All this helps to keep individual taxes down. What’s not to like?




  • Steve McKenzie

    Well, this should clear up who this paper endorses and what it’s stance is on development. Thank goodness because i was very confused as to those lingering questions.

  • This is from a Falls Church City document date August 21, 2015 explaining the fiscal impact model that was created in 2003 and is STILL in use today to evaluate net fiscal impact on all new development projects such as the current Mason Row…and several other that have been submitted in the past few days or weeks. “The City’s fiscal impact analysis does not include bonded costs for fixed assets such as major new or expanded facilities. It has been the City’s practice not to model for costs of new facilities so long as excess capacity exists to absorb increased demand generated by individual projects. With assistance from our consultants, staff will continue to evaluate its approach to fiscal impact modeling, especially with respect to school facilities–capacities, cost per seat, project-by-project and cumulative development impacts, timing horizons and other dynamic factors.” So with no excess capacity, and the need for new school and city capital facilities, we don’t know whether these mixed use projects are net positive, neutral or if the city is incurring additional costs with each one built.

  • Interesting comment. How do the numbers look if you just consider MUDs (versus combining MUDs and the older apartment buildings)? The older apartment buildings are definitely attracting more families with kids and that’s that. And hopefully another Pearson Square won’t be permitted (family-sized apartments). But I’m curious about your analysis if you just look at MUDs, so that it is (more) apples to apples with the editorial.

    • From 2002 until now (13 years) the student population grew by 39%. It’s interesting that from 1989 to 2002 (13 years) the student population grew 51%. All that growth happened before any MUDs came online.

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