VACANT PROPERTY SPOTLIGHT |
|
Our continuing focus on vacant properties is part of our oversight strategy of the Department of Consumer and Regulatory Affairs. DCRA is responsible for identifying vacant properties and then classifying them for tax purposes as either vacant (Class 3) or blighted (Class 4). The Council has established higher real property tax rates for Classes 3 & 4 properties as a financial incentive to put these properties back into use. While homeowners pay 85 cents per $100 valuation, vacant properties are taxed at $5 and blighted at $10.
Classifying vacant properties is usually relatively simple: one can tell from the street whether a building is vacant, and confirm it with an exterior inspection front and rear. But this is the fourth newsletter where we have highlighted buildings improperly classified. DCRA’s ineffectiveness with vacant properties is a window into how and why it is ineffective with housing code enforcement and stopping illegal construction.
The point is not that the District is losing hundreds of thousands of dollars on these properties. Rather, it is that these houses have been vacant for years – while we’re in the midst of a housing shortage – and neighbors complain over and over, to no avail.
Fundamentally, DCRA’s enforcement lacks focus or mission. A property owner determined to evade the higher tax rates can do so easily. Let’s look at three properties.
|
|
1000 C Street, NE has been vacant for at least two decades. Yet the owner (10thand C Streets Associates, LLC) has repeatedly told the District government that it is occupied. The property was one of 31 vacant properties looked at by the DC Auditor in a September 21, 2017 report. The owner’s flagrant manipulation of DCRA has become neighborhood legend – indeed, there is an anonymous twitter account devoted to this property (@1000CstNE).
|
|
According to the Office of Tax and Revenue, this property has been taxed as vacant only 6 months in the last 14 years. (DCRA recently asked OTR to tax it retroactively as vacant for 2018 & 2019 – after our inquiries.) It is currently Class 1 even though my recent inspection found it to be sealed. A reverse look-up in Whitepages.com indicates no one lives there. News articles in 2010 and 2020 describe the property as longstanding vacant. I believe a review of gas, electric, and water bills will substantiate that it is unoccupied, and that the owner has misrepresented for more than a decade the property’s occupancy status to evade the higher real property tax rate.
But DCRA fails to do the work to make the case that this house is vacant. DCRA inspectors repeatedly find the house to be vacant. But then DCRA reverses itself. Or, a few years ago when the owner went to the Real Property Tax Appeals Commission (see our last newsletter about RPTAC), DCRA failed to submit sufficient evidence to make its case.
Meanwhile, this appears to be tax fraud. On May 24th I asked Attorney General Karl Racine to investigate and take legal and punitive action under the False Claims Act. DCRA could have done that.
|
|
5504 Nebraska Avenue, NW: This neat little house on a quiet stretch of Nebraska Avenue in Chevy Chase has been continuously vacant for years. The ANC testified about this property at our hearing May 25th: “The front yard is overgrown, the front door has an accumulation of mail, and the back yard and deck are covered with trash and weeds.” Since then DCRA has inspected the property, affixed a neon-green VACANT PROPERTY notice on the front door, and the yard has been cleaned up. Well, sort of.
|
|
If you peek through a front window, you will see an unbelievable accumulation of rubbish filling the living and dining rooms. It is so obvious that the house is vacant, arguably blighted, and yet for at least four years DCRA has failed to list the property as either.
This appears to be another instance of tax fraud, with DCRA an abettor. The owner has repeatedly applied for construction permits. Active construction is grounds for exemption from the vacant property tax. But I ask you, how many years does it take to repair an existing front porch? Permit B1705180 was issued May 1, 2017. And again in 2018, and 2019, in fact, earlier this month he applied again!
|
|
Cornelius Donnelly, the property owner, also owns 3216 Morrison Street, NW, around the corner. This is how ANC 3/4G describes it: “Neighbors advised DCRA in August 2015 that this house was vacant, had broken windows, and had dozens of unopened bags of fertilizer and mulch scattered across the yard. … The owner obtained multiple ‘construction/alteration/repair’ permits in 2015, 2016, 2017, 2018, and 2019. The only permit currently posted at the house expired on December 4, 2019. DCRA denied permit extensions in December 2018 and June 2020. The property has remained in essentially the same dilapidated condition since 2015 with no visible construction work undertaken.”
|
|
Nevertheless, this property has remained Class 1 every year for which tax records are available online. The current assessed value is $926,440. Instead of paying the vacant Class 3 rate ($46,320) he will pay the non-vacant Class 1 rate ($7,874). The same is true for his Nebraska Avenue house assessed at $930,540. The owner is evading almost $77,000 in taxes. And the houses remain vacant.
DCRA checks the box. There is no sense of mission. Whether the problem is vacant houses, illegal construction, or housing code violations, DCRA may send an inspector. But that’s just about it. There is no follow through. No effort to ensure compliance. And so the problem persists.
|
|
Council Legislative Update
FY 2022 Budget: Fiscal Year 2022 starts this October 1st. In the meantime, the Council’s committees are pouring over the Mayor’s proposal that she submitted May 27th. Starting next week the committees will be adopting their recommendations. My sense is that we will preserve the Mayor’s initiatives with regard to affordable housing: substantial investments in the Housing Production Trust Fund and the Housing Preservation Fund. However, there will be an effort to increase or redirect funding to reduce homelessness.
Although the Committee of the Whole will make recommendations next week concerning education, I expect that the significant moves will come when I propose the committee print July 19th. I am concerned that no school sees a cut to its budget and that there is adequate funding for resources such as early childhood education, tutoring for reading and math, counseling for social/emotional issues, and out of school time activities (such as aftercare).
Tax Increase: It’s hard to believe, but even with an infusion of almost $3.3 billon in federal funds, and local tax revenues once again growing, several Councilmembers are talking about raising taxes. Some progressive social policy groups are leading the charge, proposing to increase income and real property tax. The top rate on income would go from just under 9% to almost 12%. And they propose raising the property tax on any home with an assessed value over $2 million.
It’s not clear whether their goal is to fund programs, since there is so much federal money right now to do the same thing, or to increase “equity,” since they claim the wealthiest Washingtonians pay in taxes a lesser percentage of their income than do middle income residents.
I have countered that if equity is the issue, then redirect the tax revenue from the wealthy to create new, lower brackets for the middle class. But that’s reached a tin ear. Regardless, the Council unanimously approved creating a new tax revision commission and tax changes should wait for them.
Last Council Meeting: The Council met June 14th. Three measures got the most attention.
First, approval of the Mayor’s nomination of Reggie Van Lee to be the new Chairman of the Commission on the Arts and Humanities. Mr. Van Lee is a corporate executive who has been active in the arts for years. He was appointed by Barrack Obama to the Board of Trustees of the Kennedy Center and was formerly on the President’s Committee on the Arts and Humanities. He replaces Kay Kendall, whom I thank for her service.
Second, by 9-3 vote (Councilmembers Lewis George, Trayon White and myself voting no; Councilmember McDuffie “present”) the Council preliminarily approved a prohibition on the sale of flavored tobacco products. While fruit and mint flavors are widely controversial, the legislation also bans menthol which has existed in some brands of cigarettes for at least half a century. Not only did I not support that, but I find an irony in the Council’s trend toward banning tobacco while lifting the ban on marijuana.
The third measure getting attention was an emergency bill to approve an advance payment to DCPS and the public charter schools to begin the new school year this summer.
The next two meetings of the Council are June 29th and July 13th.
Eviction Moratorium: A month ago I tried unsuccessfully to move legislation that would restructure the current moratorium on evictions. My goal was to lift the moratorium on middle and upper income residents who can afford their housing, and to encourage lower income residents to access the $352 million in federal assistance that is available to pay their housing and utility bills. Unfortunately, the assistance is tied to an online portal called “STAY-DC,” and there have been problems with its roll out. I will continue to work with advocates and the Executive to resolve the bugs. It would be better for the government to design the transition from the public health emergency back to normal (or “new normal”) life. Otherwise the transition could be rough, and the public health emergency may end soon.
|
|
Upcoming Hearings
of the Committee of the Whole
|
|
Public Hearing:
PR 24-229, “Zoning Commission Robert Miller Confirmation Resolution of 2021”
June 24, 2021
12 p.m. via Virtual Meeting Platform
Public Hearing:
PR 24-225, “Historic Preservation Review Board
Carisa Stanley Confirmation Resolution of 2021”
PR 24-226, “Historic Preservation Review Board
Alexandra Jones Confirmation Resolution of 2021”
PR 24-227, “Historic Preservation Review Board
Andrew Aurbach Confirmation Resolution of 2021”
PR 24-228, “Historic Preservation Review Board
Gretchen Pfaehler Confirmation Resolution of 2021”
June 24, 2021
1 p.m. via Virtual Meeting Platform
Public Hearing:
PR24-238 African American Civil War Museum Installation of the Abraham Lincoln Spirit of Freedom Emancipation Statue Approval Resolution of 2021
June 24, 2021
2 p.m. via Virtual Meeting Platform
Budget Oversight Hearing:
“Fiscal Year 2022 Local Budget Act of 2021”
“Fiscal Year 2022 Federal Portion Budget Request Act of 2021”
“Fiscal Year 2022 Budget Support Act of 2021”
“Fiscal Year 2021 Revised Local Budget Emergency Adjustment Act of 2021”
June 25, 2021
9 a.m. via Virtual Meeting Platform
Legislative Meeting
June 28, 2021
12 p.m. or following the Council Breakfast
via Virtual Meeting Platform
For More Information on How to 'Attend' a Virtual Public Hearing & Meeting or to Testify for Public Hearings visit ChairmanMendelson.com/Testify or call 202.724.8196
|
|
CHAIRMAN MENDELSON'S STAFF |
|
The majority of the Chairman's Staff has shifted to telework during this public health emergency. Should you need to contact them, use the following information: |
|
|
|
|
|
|
