A surge in home improvements and new construction helped push the assessed value of the city of Ocean Shores up more than $576 million in the 2016-21 period.
The 62% increase represents a period of phenomenal growth in the coastal community, local officials said.
When City Finance Director Angie Folkers began her role in 2016, the number of single-family building permits in Ocean Shores for the year was 79. By the end of October of this year, the number of permits had already reached 213. Folkers expects 250 permits by the end of 2021.
While every year has represented a major increase in the property valuation of Ocean Shores, 2019-20 and 2020-21 saw notable increases at $177 million and $171 million, respectively. City Administrator Scott Petersen accredits some of this movement to pandemic-induced relocation.
“There are multiple things I would attribute this to and obviously a robust economy and a recovery from the 2008 housing crisis is playing a huge role, but COVID afforded people the opportunity to work remotely, thereby no longer necessitating people to reside in King, Pierce and Snohomish counties and affording them the opportunity to sell their homes at peak prices and move to our coastal community,” said Petersen.
As pandemic factors continue to play out, growth in Ocean Shores shows no signs of slowing. According to Andersen, a year-to-date comparison shows the city is far above its already high 2019 numbers.
“We are 45% over where we were on sales tax at this time two years ago, 42% over in our new home starts and building permits, 50% over in our hotel/motel tax revenue, and our real estate excise tax is up almost 89%.”
The increased assessment rate has major financial implications for the city of Ocean Shores. Property taxes on new construction generate more revenue for the city, which has helped the city lower its debt by more than $31 million in the 2016-21 period.
“We’ve been really good at paying off our debt, and we’ve created financial policies to get ourselves in a better place financially. We’re in a good place,” said Folkers.
The city is expecting new construction to be approximately $78 million for the 2022 tax year. These preliminary numbers place new construction in Ocean Shores as the highest in Grays Harbor County, with Aberdeen, the next highest city, trailing behind at only $9.7 million.This new growth will result in approximately $170,000 of additional revenue for the city of Ocean Shores.
The city’s property valuation will play an important role when the Emergency Medical Services (EMS) levy resets in 2022. With an increase in property valuation, more EMS property tax revenue will be received.
Folkers believes that the residents of Ocean Shores may experience a financial impact as well. Residents may pay less in property taxes since the levy rate per $1,000 of their assessed value decreases. The demand for property in town, however, may increase home value thereby outweighing any additional benefits from the valuation increase.
As growth in Ocean Shores increases, the city continues to outpace other areas in the county. Andersen estimates that they will surpass Hoquiam as the second largest city in Grays Harbor County by the end of the decade.
“It’s now becoming what people who originally established Ocean Shores envisioned,” Folkers said.
