Expert Advice on Green Buildings

Fairfax Green Building: What Property Tax Incentives are Available?

   
Question:

Vicky asks: There is a property tax incentive in Virginia which allows green buildings to be considered a separate class of property for local taxation purposes. We are located in Fairfax and have had an Energy Star building with a score of between 83 and 88 for the last few years and the City of Fairfax keeps giving us the Heisman. Nothing. What is the point of a property tax incentive if it is not enacted? See below from the DSIREUSA.org website: "In March 2008, Virginia enacted legislation that would allow local jurisdictions to assess the property tax of energy efficient buildings at a reduced rate. Under this law, eligible energy-efficient buildings, not including the real property on which they are located, may be considered a separate class of property for local taxation purposes. Accordingly, the governing body of any county, city or town may, by ordinance, allow a special assessment of the property taxes for this class of property. An energy-efficient building is defined as any building that exceeds the energy efficiency standards of the Virginia Uniform Statewide Building Code by 30%; meets performance standards of the Green Globes Green Building Rating System, the Leadership in Energy and Environmental Design (LEED) System or the EarthCraft House Program; or qualifies as an Energy Star home under federal Energy Star criteria."

Answer:
Share


Hi Vicky,

Thank you for your question.

Green building property tax incentives are gaining momentum in local and city governments throughout the country - although the numbers are small. To the best of my knowledge, Fairfax County has not passed any green building laws nor any enforceable property tax incentives for LEED / High Performing Buildings. It's a shame b/c Fairfax County needs to get its act together and stimulate the A/E industry by offering property tax incentives that would in turn produce higher efficiency buildings at less demand to its infrastructure system such as storm water, sewer, water supply systems and electricity.

On a side note, I found this about Arlington County (maybe Fairfax County would follow at some point):

The threshold for consideration of the density and height bonuses includes the full range of LEED certifications, Certified, Silver, Gold and Platinum. Achieving the LEED Certified level does not guarantee a density bonus, but will be considered on a case-by-case basis, and can potentially earn a bonus of .05 floor area ratio (FAR) for office buildings (.10 FAR for residential). Office buildings achieving LEED Silver can be eligible for up to .15 FAR (residential .20 FAR). Office buildings achieving LEED Gold can be considered for .35 FAR (residential .40 FAR) and office buildings achieving LEED Platinum can be considered for .45 FAR (residential .50 FAR).

In December 2003, the County also established a Green Building Fund. Developers who participate in the site plan process (meaning their projects are special exceptions to the Zoning Ordinance) and do not achieve official LEED certification are required to contribute $0.045/sq ft. The Green Building Fund is used to provide education and outreach to developers and the community on green building issues. If the building later receives LEED certification, the fee will be refunded. Those projects that achieve LEED certification do not have to contribute

Virginia has a way to go compared to Maryland. Maryland is very efficient when it comes to enforcing property tax credits for LEED buildings - Montgomery County, Howard County, Baltimore County, and Anne Arundel County are the leaders in this category and they have strong reputations in enforcing the tax credit law. However, Baltimore City itself decided not to allow property tax credits due to a "forecast" of a $600 million budget windfall in 10 years due to lost tax revenue. I think it's a bad excuse and it will scare many private developers to develop outside of the city, which will cause the city to lose out on more potential tax revenue - it's a vicious cycle. Fairfax County run the risk of being left behind in the higher performance building movement if they do not take action.

Expert Advice and Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.
  • You may use [view:name=display=args] tags to display views.

More information about formatting options