The value of commercial and residential property along the I-95 and Route 40 corridors in Harford County increased in 2020 — in line with an 8.1% increase in assessments statewide — as property sales and new construction continued despite the COVID-19 pandemic.
Assessments for residential property increased by an average of 8% and an average of about 2% for commercial and industrial property in “Area 3″ of the county, according to Christina Shrodes, supervisor of assessments for Harford.
The Maryland Department of Assessments and Taxation conducted for 2021 a reassessment of 759,422 properties in the Area 3 sections of the state’s 24 jurisdictions, which are divided into three sectors with each sector undergoing a reassessment every three years. The results of the reassessments for 2021 were sent to property owners across the state Tuesday, according to a press release from SDAT.
Harford County’s Area 3 includes Aberdeen, Edgewood, Riverside and the Abingdon area. It covers the largest commercial and industrial area in the county and holds about 38,000 taxable property accounts, out of the roughly 101,000 total property accounts for Harford, according to Shrodes.
“This is where the majority of the warehouses and industrial properties are located,” she said Thursday.
Assessors with SDAT conducted a “market analysis” for the area and based their findings on research of more than 1,000 property sales, building permit data from the county government as well as improvements seen on properties, such as new decks or patios, according to Shrodes. Increases in value will be phased in over three years, she noted.
Shrodes stressed that her agency’s analysis is “sales driven” and that the property’s value must be 100% of market value, so the assessment reflects the fair market value.
Residential values in Area 3 have “held strong,” despite a smaller residential inventory compared to other parts of the county, and that homes are “selling very quickly for premium dollar,” Shrodes said.
Sales of property and construction in the industrial and commercial sector continue, as the demand for warehouses increases in the wake of more online shopping.
“Warehousing has expanded tremendously, and being on that [I-]95 corridor and having the enterprise zone that area has helped the industrial and the warehousing side hold strong,” Shrodes said.
Harford County has two enterprise zones, one for Edgewood and Joppa and another for the greater Aberdeen and Havre de Grace area, that are designed to promote development and job creation in the southern part of the county. The county offers real property and income tax credits to businesses that make capital investments or create jobs.
Shrodes noted there had been a slowdown in construction during the beginning of the pandemic, but “it’s never stopped,” and facilities continue to be built, sold, leased or rented in Harford.
“It’s been a good year for real estate,” she said.
County officials expected to see an increase in property assessments this year, which is in line with increases that have happened in prior years. County leaders, who are starting to develop Harford’s budget for fiscal 2022, expect to see about a 2% increase in property tax revenue going into next year, according to Treasurer Robert Sandlass.
“Residential assessment growth is stronger than commercial, which is expected as our residential market is pretty strong as evidenced by rising home values and record lows when it comes to data on the market,” Sandlass stated in an email. “On the commercial side, we don’t know if we are seeing anything systemic, but we are concerned about the future of office and retail real estate.”
The concern about office and retail property is driven by an increase in people shopping online and working at home during the pandemic.
“Our commercial property in Harford County, however, is balanced,” said Sandlass, who noted that the county does not have as much retail and office space compared to other cities and counties.
“We also have some commercial property, such as distribution centers, that are well poised for this economic shift/evolution,” he stated.
An overall increase in local revenue depends on income tax, which is “coming in strong” so far, although officials have seen only about 25% of collections for the year — the next distributions of income tax revenue are slated for late February and then May and the summer months, according to Sandlass.
“That uncertainty, as well as the uncertainty over the state’s budget process and any cuts or cost shifts, are why we will continue to take a conservative approach to the county’s budget and finance,” he said.
Property tax revenue accounted for 45% of general fund revenues in the current fiscal year, followed by 41% from income tax revenue. The $632.4 million general fund supports many key local services, such as public education and public safety, according to county budget documents.
The county’s real property tax rate stands at $1.04 per $100 of assessed property value. Local government officials are not currently considering a tax rate increase, according to county government spokesperson Cindy Mumby.
“The county executive is just starting to look at revenues and department budgets for next fiscal year,” she stated.
Editor’s note: An earlier version of this article incorrectly stated the parts of Harford County covered by Area 3.