Editor’s note: While this post has two authors, it’s written from David Sheon’s perspective.
The official count of vacant and blighted properties in DC is about 1,200, but in reality, there are likely many more. The reasons for the discrepancy? A number of loopholes in the system for counting these properties, and not enough staff to close them.
This vacant house might look like it’s under construction, but it hasn’t been touched in years. All photos by the authors.
When I first became an ANC Commissioner, I knocked on every door in my district and asked my constituents what they wanted to see different. Then, I tallied their concerns to see what issues rose to the top. The results surprised me: Issues related to vacant and blighted (which basically means it’s a threat to health and safety) houses ranked second on people’s list of concerns, after traffic safety.
After being elected, I compiled a list of vacant properties in my neighborhood. In my 12-block district, I found seven clearly vacant homes. In many cases, these houses were literally falling apart, full of garbage (a broken down pick-up truck from a long-abandoned construction project on one) and overgrown weeds. Neighbors confirmed the properties didn’t seem to be in probate (when a property is tied up in court because the owner passed away and it isn’t clear who now owns it) but had been vacant for years.
These properties aren’t only eyesores; they’re a threat to public safety. On many, unsecured doors and windows attract crime, but without actual residents in the houses, there fewer eyes on the street. They also deter investment.
Unfortunately, DC’s system for identifying these properties, assessing penalties, and putting properties back into productive use is fundamentally broken.
It’s hard to get a property officially registered as vacant or blighted
The road to remediating vacant and blighted properties starts with DC’s Department of Consumer and Regulatory Affairs (DCRA). There, the Vacant and Blighted Enforcement (VBE) Unit is tasked with inspecting vacant and blighted properties and then assessing an appropriate tax rate. The idea is to raise taxes on buildings that aren’t being put to use as a way to encourage the owners to sell or fix their properties.
For vacant properties, the tax rate is five percent. For vacant and blighted properties, the tax rate is an even higher 10 percent. But this is where things get really tricky, as there are a number of loopholes that prevent these taxes from being assessed.
For example, once a property is identified as vacant, a property owner can get a permit to do work on the house. The property then becomes exempt from the vacant property tax even if no work has been done. For instance, long time neighbors of one vacant property told me they had never even heard a hammer in the vacant house, even though a work permit kept the vacant building tax from applying.
Another loophole involves putting the property up for sale at a price that is several times the fair market value. The “for sale” status will also earn the property owner an exemption. At one property near my house, which was falling apart, the owner listed it for sale with a price as though renovations had been made. In the condition it was in, the price should have been about $300K however he was listing it at nearly $900K. Clearly no one was going to buy it, but this way he avoided vacant building tax.
Owners can also set up anonymous Limited Liability Corporations (LLCs), often named for the property’s address, that don’t actually tie back to a person. That can make it impossible to go after individual owners to recover taxes owed or penalties assessed to the LLC. One example of this are the properties owned by Insun Hofgard, who WAMU’s Martin Austermuhle reported on last year. Most of her properties, including those that remain unfinished and now blight Kennedy Street, are registered under individual LLCs.
Finally, vacant lots are also exempt.
Even when the VBE does identify properties as being vacant, the law requires the unit to reinspect the property every six months and reclassify it as either vacant or vacant and blighted. The VBE is not sufficiently staffed or resourced to handle this task, and properties routinely fall off DCRA’s list, even when what got them on it in the first place hasn’t changed.
Why would a property owner want to keep a property vacant as long as possible? As long as DC property values are going up, the longer the owner waits, the more profitable it will be.
In our experience, the system is broken
Since 2013, my neighbor and co-author, David Gottfried, has worked to identify vacant and blighted properties and to ask DCRA to classify them as such.
Every six months, David has followed up with DCRA to ask about keeping properties on the list and applying the appropriate penalties. Despite his efforts, the properties on his own list, which were clearly vacant and often unquestionably blighted, just slipped through the cracks. On my end, only three of the seven vacant properties that I identified in my neighborhood were on the city’s list.
Simply put, it’s very difficult to get a property classified as vacant, or keep it that way. Even when neighbors keep very close watch and follow up diligently with city agencies, DCRA is too often failing to adequately identify vacant properties and penalize their owners. Our experiences lead us to believe that the actual number of vacant and blighted properties is much higher than the 1,200 properties on DCRA’s list, and could be as high as 5,000.
Another vacant property. Here, renovations are now underway— it’d be nice if that were the story more often.
Let’s give DCRA what it needs to close the loopholes
This is an important issue for the health, safety, and well-being of our communities. It is also an issue of basic fairness. Negligent property owners who degrade our communities and jeopardize our security should face stiff penalties for their actions.
We need to adequately staff and resource the VBE, remove the burden from community members and DCRA to classify and re-classify properties, and place the onus squarely on the property owners by making them show the city that a property is no longer vacant before a property is removed from the list. We also need to pierce the corporate veil afforded negligent homeowners who use LLCs, so that DCRA and relevant agencies can appropriately penalize negligent homeowners.
Some of these fixes are hard and will take time, but with others, a small change in the law could go a long way. A little bit of political will and leadership could go a long way towards making our communities safer, more attractive, and more pleasant places to live.
We’ll discuss pending legislation around vacant and blighted properties in an upcoming post.