There are major problems with how DC counts and taxes its vacant buildings, and on Thursday, the DC Council will hold a hearing on two bills aimed at fixing them. The new laws will hold vacant building owners more accountable, but there are still ways to further the laws’ reach.
This house at 5112 9th Street NW has been vacant for three years. It regularly falls “off” the vacant building list, so it isn’t taxed at the higher level consistently.
Today, DC can charge higher tax rates on buildings that the Department of Consumer and Regulatory Affairs says are vacant, at a rate of five percent of assessed value if vacant and 10 percent if the property is found to be blighted. The problem is that there are a lot of loopholes that allow negligent owners to keep their properties from going on the list.
Vacant buildings aren’t just eyesores. They contribute to rodent and other infestations, and according to the Office of the Attorney General’s former Assistant Attorney General Michael Aniton, they are proven to have a high association with criminal activity because illegal activity thrives out of view and on private property.
Here’s what the new bills are set to do:
Authored by at-large councilmember Elissa Silverman, bills B21-527 and B21-598 appear to have wide support among the council (one of the two companion bills was co-introduced by a majority of councilmembers). The legislation aims to help solve DC’s vacant building problem by:
- Cutting how long vacant properties can be exempt from higher taxes
- Making homeowners prove buildings aren’t vacant rather than making the Department of Consumer and Regulatory Affairs prove they are
- Raising fines for not registering vacant properties
- Giving tax rebates owners who fill vacant properties
Here’s how they could be even better:
Still, the underlying issue is that some buildings and owners fall through the cracks because the penalties for keeping properties vacant either aren’t enforced or aren’t incentive enough to change. The following ideas would help the proposed legislation go even further in pushing vacant property owners to turn their buildings into something useful:
1. Take no nonsense when it comes to identifying building owners
Currently, some developers use dozens of LLCs to own properties, making it impossible to know who it is that routinely buys and holds vacant buildings without actually improving them. If all property sales in the District required a name, address, phone and next of kin information for every property, and if this information were publicly available, it’d be much easier to identify the vacant building code’s serial violators.
This would have the added benefit of expediting communications should a property owner pass away. It would also help the city to ensure that when a property passes from an older family member to a younger one, it doesn’t keep charging the reduced tax rates it does for senior.
2. Make it more expensive to leave a property vacant
Currently DCRA sends out teams to board up doors and windows of vacant properties, and DPW mows the lawn. The bill is tacked on to the owner’s tax bill. Doubling the fees for these services would incentivize vacant property owners to manage these issues on their own or to return the property to active use.
3. Penalize banks who back vacant owners
Banks found to be lending to LLCs that own vacant properties should pay the District an additional tax to cover the costs of fire and rescue that may be needed on these properties — and to make them want owners to move properties into use.
4. Reinstate a tax on vacant lots
In 1990, the District established a tax of $3.29 for every $100 of assessed value on vacant lots without structures, also known as Class 5 properties. The tax was increased in 1994 to $5.00. At the time the tax was raised, then-Mayor Sharon Pratt Kelly stressed the importance of the tax in providing incentives for owners to eliminate blight and increase the supply of affordable housing.
In 1999, however, officials did away with this property tax classification. The DC Building Industry Association (DCBIA) argued that taxing vacant parcels was counterproductive “at a time when the market is down.” The market is no longer down, yet vacant parcels still blight our communities without any penalties being assessed to the owners. It is time to reintroduce the Class 5 tax rate.
5. Require complete transparency at DCRA:
This is the most important issue not addressed by the legislation. DCRA’s Online Building Permit Database has been “offline” for over 130 days now. The public has a right to see what fines are being issued to vacant and blighted properties, dates of inspections, and findings of inspectors.
Further, DCRA removes every vacant and blighted building report after six months, so that the public can’t see the history of vacant buildings. We propose that these records be maintained online, publicly available, for five years so that the public can be confident that vacant property owners are paying their fair share for the burden they have put on the community.
The DC Council will hear testimony on Thursday
We look forward to testifying at the DC Council Committee on Business, Consumer, and Regulatory Affairs’s public hearing on bills B21-527 and B21-598 this Thursday at 10 am at the Wilson Building. Please join if these issues interest you. If you wish to testify, contact Faye Caldwell, at email@example.com.