As Richmond officials consider slowing the growth in homeowners’ property tax bills, most of the five candidates running for mayor have expressed skepticism about whether the city can afford to lower its real estate tax rate.

At a mayoral forum last week in South Richmond, the candidates were asked to weigh in on the topic of taxes, giving them a rare chance to opine on a live issue the City Council is expected to vote on in a few weeks. 

Councilor Reva Trammell (8th District) has said she believes she has the votes to lower the real estate tax rate from $1.20 per $100 of assessed value to $1.16, which could save the average homeowner roughly $150 on next year’s bills. 

Council President Kristen Nye (4th District) introduced an ordinance to keep the rate at $1.20, which would bring the city about $16 million in revenue it wouldn’t have under Trammell’s plan.

The city’s current budget already includes much of that new revenue because the budget approved in the spring assumed the council would vote for higher tax bills after new real estate assessment notices went out in September.

What the candidates say

Dr. Danny Avula said a rate reduction would be “really difficult” in the first few years of the next mayor’s administration. Avula, who has a public health background and led Virginia’s COVID-19 vaccination effort, added that he’d focus on getting the city’s “financial house in order” before pushing for a lower tax rate.

“I do think it needs to happen eventually,” he said. “This is an issue of competition with our counties. We’re at $1.20. Henrico’s at 80 cents. And we’re going to continue to lose people who have the choice to go over to the county.”

Former City Council president Michelle Mosby said it’s not a “fair statement” to compare Richmond’s ability to tax real estate with its neighbors. Unlike Richmond, she said, Henrico and Chesterfield counties can “knock down trees” to build on open land.

Mosby also revealed that she has encouraged council members to oppose Trammell’s proposal.

“In a moment of transparency, I have asked council to not lower the tax rate that is being proposed,” Mosby said. “Right now, council is in the midst of collective bargaining. We don’t know what the outcome of that will look like.”

Former private equity professional and software investor Harrison Roday said he understands residents’ frustrations over higher property assessments driving their city tax bills up dramatically. But he struck a similarly cautious note on whether the rate could be reduced given how much of the city’s budget is funded by real estate taxes.

“From a math perspective, it is a very difficult problem for the people who write the city’s budget,” Roday said. “I think people who are running for office should be honest. And I don’t think we need a bunch of false promises about what can be done about the tax rate.”

When taxes come up, City Councilor Andreas Addison (1st District) talks up his outside-the-box proposal to shift how the city taxes real estate altogether. Addison has floated the idea of implementing a Land Value Tax in Richmond, which would primarily tax land itself instead of the value of buildings that sit on top of it.

“I have a way of shifting how the tax operates in the city that could actually remove the burden of balancing our budget on homeowners,” Addison said at the forum.

In a news release this week, Addison’s campaign said a land value tax would shift the tax burden onto real estate investors and others who have speculative land holdings, encourage land owners to find a productive use for vacant or underutilized lots and stop penalizing homeowners with higher tax bills when they make improvements to their property.

Richmond already has the power to implement Addison’s idea, because he helped get a bill through the General Assembly in 2020 that added the city to a small list of localities authorized to tax land and buildings at different rates.

It’s unclear how much appetite there is for a bigger tax overhaul like Addison envisions, but he said he would work to implement the idea as mayor.

At the forum, community organizer Maurice Neblett said he supports lowering the tax rate.

“I believe that we can do it. But it’s my job to make sure we make up for it,” Neblett said. “I have innovative methods that will make up for that tax decrease.”

Neblett followed through on that stance by appearing at a Sept. 19 council committee meeting to support the 4-cent reduction proposed by Trammell. A short-term reduction in revenue as new construction continues across Richmond, he said, won’t “make or break the city.”

“I just hope that we all consider putting the people at the forefront,” Neblett said.

The competing tax rate proposals — which the council is legally required to consider due to the high growth seen in a new round of real estate tax assessments sent to property owners this month — are scheduled to be back before the body on Oct. 15.

They were initially set to be taken up this month, but Mayor Levar Stoney’s administration requested a delay so it could prepare more data on the fiscal impact of lowering the rate 4 cents. The administration is also preparing a tax relief proposal of its own that could involve a one-time rebate or more targeted relief for elderly or low-income homeowners. 

At a recent news conference, Stoney declined to reveal details of what tax options he’s considering.

Because the total assessed value of city real estate went up a significant 6.68%, state law requires the council to hold a public hearing and vote on what the rate should be. Both rate options on the table would mean higher tax bills in 2025 due to the growth in assessments.

Addison, the only mayoral contender who currently serves on the council, has not yet indicated how he will vote on the tax rate issue.

“There are multiple proposals under consideration and right now it’s a matter of us reviewing all of them and looking at the impacts,” he said in a statement Thursday. “I’m not committed to any one solution until we have the full picture of the impacts. And having a robust public conversation about this will be critical.”