DC probably has a lot more vacant and blighted properties than its official count says, largely because of loophopes in the counting system. A bill before the DC Council is aiming to change that.
Residents proposed ideas for ways a long-vacant property could be put to better use. Photo by Myles Smith.
In February, Elissa Silverman introduced the Vacant Property Enforcement Amendment of 2016 to work in tandem with a similar piece of legislation she introduced in 2015. Both would shift the burden of proof from DC’s Department of Consumer and Regulatory Affairs to the property owner, meaning it’d be on the owner to show that a buildint isn’t vacant rather than on the city to show that it is.
This change would make building owners much more accountable, as well as strengthen DCRA’s ability to enforce existing vacant and blighted properties laws.
First, a quick recap of the current situation
Under current law, properties determined that DCRA’s Vacant and Blighted Enforcement Unit determines to be vacant are taxed at elevated tax rates of five percent of assessed value if vacant and 10 percent if the property is found to be blighted.
But the process for classifying a property as vacant or blighted and then maintaining the property’s classification is onerous; District law states that the Mayor is the only person in the city who has the authority to list a building as blighted, and there are a number of loopholes in the law that allow negligent owners to avoid elevated tax rates.
Every six months, DCRA has to reassess the property and determine that it is still vacant and/or blighted. That means that when a building goes onto the list, chances are high that it will revert to the normal non-vacant, non-blighted tax rate even if the owner does nothing at all.
We estimate that there are as many as 5,000 vacant and blighted properties in the District, a number far too large for the small staff of DCRA’s Vacant and Blighted Enforcement Unit to keep a handle on.
Silverman’s bills do four things:
It reduces from three years to two years the maximum amount of time a vacant property can qualify for an exemption from higher taxes.
- Currently, property owners can get exemptions from higher tax rates for up the three years by filing for work permits that cost a fraction of the potential tax penalty. In practice, these exemptions can last much longer than three years, as David Sheon and I have documented in a number of cases. There is no requirement that any actual work be done to earn the exemption.
This vacant building at 5112 9th Street has been vacant for three years, but it regularly falls off the list and its owner doesn’t get taxed at a higher level consistently. Neighbors complain of loiterers and drug activity on the property.
It shifts the burden of biannual proof that the building is vacant or blighted from being the responsibility of DCRA inspectors and onto homeowners.
- As the law stands, DCRA has to inspect every one of the 1300 properties on the list plus any new properties every six months. This bill shifts the burden off of DCRA and onto the owners of vacant properties by making them demonstrate with utility bills that the properties are no longer vacant.
It raises fines for failing to register vacant properties or allow DCRA to inspect them.
- Accepting a fine is often easier and less expensive than registering a property as vacant. This bill reverses those incentives, making it easier for DCRA to maintain accurate lists with up to date information and to take enforcement actions when necessary.
It provides positive incentives by allowing an owner of a vacant property who follows the law and fills the vacancy within a year to receive a rebate of one year of vacant property taxes.
- There is currently no mechanism for reimbursing owners of vacant and blighted properties who remediate blight and fill vacancies. This law will provide a strong incentive for owners to move quickly and do the right thing.
The DC Council will take the next steps in July
The Council has scheduled hearings on the proposed legislation for July 14. Hopefully, we’ll see the bill brought up for a vote following the hearings.
While this bill does not address all of the loopholes, it does fix the most obvious flaws. We are pleased to see this development, and urge Council to add the additional amendments needed to address the above listed issues.