The latest estimate of losses from the DC property tax refund scheme is over $50 million. Although that number is shocking, there is another albeit quieter scam that is costing DC taxpayers that much every year.
The Washington Business Journal reported on the lack of enforcement of the vacant property tax all the way back in 1998 (see below). At the time Natwar Gandhi, then director of the Office of Tax and Revenue, said, "Unfortunately, there are many properties that should be in Class 5 (vacant rate) but are not." The situation remains the same today.
Let's try to estimate the magnitude of the problem. We can easily assume that there are at least 3,000 vacant properties in DC. No one knows the true number but DCRA has put the number in the 2000-3000 range and many many properties known to be vacant are still not listed on DC's rolls. Say half are not paying the class 3 rate. This is a very conservative estimate. The median property value in the District is about $435,350 according to the DC Fiscal Policy Institute. And the vacant property tax now stands at 10%. So here we go:
1,500 (half of 3,000 properties) x $435,350 (median property value) x 10% (tax rate) =
$65,302,500
That is $65 million in tax dollars that goes uncollected every year. The real numbers are probably higher. We won't know until the mayor, the city council, or congress fully investigates these properties. Not only are heavily taxed residents and businesses getting ripped off by inflated taxes due in part to these properties not being properly taxed, but vacant properties contribute to crime and blight in DC's most needy neighborhoods.
Why is this allowed to occur? I can only assume that some vacant property owners must have enough political pull to avoid penalties. Not surprisingly, DC city government owns the most vacant properties. Churches own another large portion of rundown buildings. Certain well-connected developers also fail to pay the proper taxes on their numerous "investments". Granted, the mayor inherited this mess. But we should question the lack of action by two figures that have been around from the beginning, Natwar Gandhi and the chairman of the finance committee, Jack Evans. They've done little to address this problem.
Tuesday, March 11, 2008
Monday, February 11, 2008
Available for renovation?
From the mailbag:
"I've been thinking about how to deal with this for a long time because
there are just so many of these places rotting away. Some of them are
spectacular too; its a damn shame that nobody is doing anything with
them. . . Which brings me to my point. I want to try to buy one of
these places myself and make it useful again. My idea is to pay for
as little as humanly possible, try to salvage as much as I can from
the original building, make use of reclaimed materials, and throw
build parties to try to get some free labor for the heavy stuff. I
basically view it as an art project I can live in for a while and then
sell to a family that can really use it. I have some fairly handy
friends who I could enlist if we had a place to work with as well.
It seems like you have good readership on your blog, and maybe some
idea of how to go about acquiring one of these properties so I thought
you'd be interested. I need to get in touch with the right people in
the city govt and basically just get out the word that this is going
on. I'm not rolling in money or anything, but I'd be able to put up
some cash for this venture, and I'd love to find some other people who
might want to contribute time money or materials in exchange for
equity in the finished product.
Any thoughts?
-Clay"
"I've been thinking about how to deal with this for a long time because
there are just so many of these places rotting away. Some of them are
spectacular too; its a damn shame that nobody is doing anything with
them. . . Which brings me to my point. I want to try to buy one of
these places myself and make it useful again. My idea is to pay for
as little as humanly possible, try to salvage as much as I can from
the original building, make use of reclaimed materials, and throw
build parties to try to get some free labor for the heavy stuff. I
basically view it as an art project I can live in for a while and then
sell to a family that can really use it. I have some fairly handy
friends who I could enlist if we had a place to work with as well.
It seems like you have good readership on your blog, and maybe some
idea of how to go about acquiring one of these properties so I thought
you'd be interested. I need to get in touch with the right people in
the city govt and basically just get out the word that this is going
on. I'm not rolling in money or anything, but I'd be able to put up
some cash for this venture, and I'd love to find some other people who
might want to contribute time money or materials in exchange for
equity in the finished product.
Any thoughts?
-Clay"
Thursday, January 31, 2008
Thieves eye Asian-food delivery drivers - Examiner.com
"Robbers call the Chinese-carryout restaurants and order the food to be delivered to the wrong address or to a vacant home, police said. When the driver arrives, the robbers take the food, as well as the driver’s money and cell phone. In one case, they stole the car, too. Several drivers have told officers that they’ve been robbed several times....
Police have boarded up a vacant home in 5100 block of 13th Street Northwest that was used at least twice by robbers"
Police have boarded up a vacant home in 5100 block of 13th Street Northwest that was used at least twice by robbers"
Wednesday, January 9, 2008
1316 9th Street, NW
This former barbershop was bought by a developer on 09/13/2007 for $300,000. The developer's presentation at the ANC2f meeting on 1/9/2008 was very encouraging and I wish them luck.
It should be noted that the building is in horrible condition due to the negligence of the previous owners and the city government's inaction. Remarkably, it is not listed as vacant by OTR or DCRA. The current owner is entitled to an exemption though.
It should be noted that the building is in horrible condition due to the negligence of the previous owners and the city government's inaction. Remarkably, it is not listed as vacant by OTR or DCRA. The current owner is entitled to an exemption though.
Monday, January 7, 2008
FOXNews.com - Death of Main Street, One Local Zoning Law at a Time - Opinion
"Local officials who simultaneously decry big box stores and national chains while doling out burdensome regulatory structures and complicated permit processes should understand that regulatory burdens hit the smaller, independent places hardest, because they're the places that have the smallest amount of discretionary cash to hire legal aid (or, if you're really cynical, to make the appropriate campaign contributions). They're on a tighter budget and, therefore, have a smaller margin of error when it comes to hassles like delaying an opening because some bureaucrat determined their signage is a couple of inches out of compliance."
by Radley Balko
by Radley Balko
Thursday, January 3, 2008
No teeth in D.C. tax on vacant land - Washington Business Journal:
"The District is not enforcing its controversial Class 5 tax rate on much of the city's vacant land, even though the D.C. Council imposed the higher rate to stimulate development.
Developers have criticized the higher rate, saying it discourages investment in real estate in the District. But not all owners of vacant or undeveloped properties are paying the higher Class 5 rate of $5 per $100 assessed value, compared with the $2.15 per $100 rate paid by owners of other commercial property.
'They pay $5 if we can identify them,' said Natwar Gandhi, director of the Office of Tax and Revenue. 'Unfortunately, there are many properties that should be in Class 5 but are not.'
Only 2,979 properties, less than 2 percent of the District's 154,582 taxable parcels, are classified as vacant or unoccupied. City officials have no estimate of how many more properties should be in that classification."
by Thomas C. Hall
Washington Business Journal
June 26, 1998
[Note: This was published in 1998.--Ed.]
Developers have criticized the higher rate, saying it discourages investment in real estate in the District. But not all owners of vacant or undeveloped properties are paying the higher Class 5 rate of $5 per $100 assessed value, compared with the $2.15 per $100 rate paid by owners of other commercial property.
'They pay $5 if we can identify them,' said Natwar Gandhi, director of the Office of Tax and Revenue. 'Unfortunately, there are many properties that should be in Class 5 but are not.'
Only 2,979 properties, less than 2 percent of the District's 154,582 taxable parcels, are classified as vacant or unoccupied. City officials have no estimate of how many more properties should be in that classification."
by Thomas C. Hall
Washington Business Journal
June 26, 1998
[Note: This was published in 1998.--Ed.]
Signs on vacant property
3107.6.5 Signs on vacant property. Display of any sign, poster, or other advertising medium on or in any part of a vacant building, store, or premises, visible from the street or public way, other than real estate signs, complying with Section 3107.16 and authorized billboards or poster panels, is prohibited.
Exception: One sign not more than 6 square feet (0.557 m²) in area giving the name, business, and new address of the former occupant is permitted to be displayed for not more than 60 days on the vacated premises.
District of Columbia Building Code Supplement of 2003
See page 173.
Exception: One sign not more than 6 square feet (0.557 m²) in area giving the name, business, and new address of the former occupant is permitted to be displayed for not more than 60 days on the vacated premises.
District of Columbia Building Code Supplement of 2003
See page 173.
ANC2C02 Forum - Vacant Props
"With more and more ex-offenders, some without housing, being released and returning to their old stomping grounds, these vacant and sometimes unsecured properties present even more of a problem for vacant property owners and neighboring residents.
So when an undisclosable source told me that a rifle was found in a property, like the one pictured, about 10 doors from my home and only a few hundred yards from Scott Montgomery Elementary a few weeks ago. I thought it was worth informing the community publicly. The City and our Councilmember have dropped the ball on this issue and we need more ammunition like this to hold them accountable for keeping our communities unsafe."
[I don't know how I missed this posting.--Ed.]
So when an undisclosable source told me that a rifle was found in a property, like the one pictured, about 10 doors from my home and only a few hundred yards from Scott Montgomery Elementary a few weeks ago. I thought it was worth informing the community publicly. The City and our Councilmember have dropped the ball on this issue and we need more ammunition like this to hold them accountable for keeping our communities unsafe."
[I don't know how I missed this posting.--Ed.]
DC Government Data Feeds
From the mail bag:
"I work with the Citywide Data Warehouse group in DC Government. I noticed your site links to our webpage under Government links; however, it is listed as CapStat. Our group has been renamed to Citywide Data Warehouse since you first posted this. There is a new CapStat page at http://capstat.oca.dc.gov/.
Although we are not currently receiving data from the DCRA Vacant Property group, our Office of Tax & Revenue Registered Vacant Property dataset may assist you when reporting on properties throughout the District. The data catalog is available at http://data.octo.dc.gov/.
If we can be of any assistance, please don’t hesitate to contact our team at CityDW@dc.gov.
Regards,
Julia Williams
Program Outreach and Training Coordinator
Office of the Chief Technology Officer
1350 Pennsylvania Ave, NW, Suite C-01
Washington, DC 20004
Phone: 202-727-0078
Fax: 202-727-9767
Email: julia.williams@dc.gov
Website: www.citydw.octo.dc.gov"
"I work with the Citywide Data Warehouse group in DC Government. I noticed your site links to our webpage under Government links; however, it is listed as CapStat. Our group has been renamed to Citywide Data Warehouse since you first posted this. There is a new CapStat page at http://capstat.oca.dc.gov/.
Although we are not currently receiving data from the DCRA Vacant Property group, our Office of Tax & Revenue Registered Vacant Property dataset may assist you when reporting on properties throughout the District. The data catalog is available at http://data.octo.dc.gov/.
If we can be of any assistance, please don’t hesitate to contact our team at CityDW@dc.gov.
Regards,
Julia Williams
Program Outreach and Training Coordinator
Office of the Chief Technology Officer
1350 Pennsylvania Ave, NW, Suite C-01
Washington, DC 20004
Phone: 202-727-0078
Fax: 202-727-9767
Email: julia.williams@dc.gov
Website: www.citydw.octo.dc.gov"
925 5th Street, NW
From the mail bag:
"Love your vacant property blog. I have a question about 925 5th Street NW. Tony Cheng (the owner of the property) has removed the roof (it had a tree growing out of it anyway). The back of the property is secured by plywood. Drug users and homeless are using the building by pulling off the plywood and/or climbing over the plywood. This is clearly a violation. The building is not secure and I'm not sure that you can have a vacant building without a roof. What do I need to do to get this property properly reported as a nuisance, condemned, fixed, etc..."
"Love your vacant property blog. I have a question about 925 5th Street NW. Tony Cheng (the owner of the property) has removed the roof (it had a tree growing out of it anyway). The back of the property is secured by plywood. Drug users and homeless are using the building by pulling off the plywood and/or climbing over the plywood. This is clearly a violation. The building is not secure and I'm not sure that you can have a vacant building without a roof. What do I need to do to get this property properly reported as a nuisance, condemned, fixed, etc..."
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