Commercial assessments in D.C. plunge

OTR is mailing 2011 assessment notices to 190,000 city property owners. Roughly 170,000 owners also should expect tax bills in the mail for the 2010 first half of the tax year. Payment is due by March 31.

The new assessments reflect the real estate market as of Jan. 1. Residential properties were down between 3 and 4 percent, OTR said, while commercial real estate averaged a 10.6 percent decline.

“The commercial story really involves the banks not lending,” said Richie McKeithen, director of OTR’s Real Property Tax Administration.

But it could be worse, he said, “We do have the benefit of the government being here. Our properties still do have some value.”

Residential neighborhoods hardest hit by lower assessments, those that saw double digit decreases, are all east of the Anacostia River, in Congress Heights, Deanwood, Hillcrest, Fort Dupont Park, Randle Heights. Those areas, McKeithen said, “were pretty much leveled with a lot of foreclosures.”

The declines have all but leveled off in many Northwest D.C. communities. Glover Park saw a 0.26 percent increase, Kent a 3.51 percent rise, Palisades 0.05 percent decline and Georgetown a 2.08 percent drop. Hardest hit west of the river were Trinidad, Mount Pleasant, Takoma and Eckington.

The new assessments will be reflected in 2011 tax bills. The bills being delivered now reflect last year’s assessments, which were steeper.

But homeowners shouldn’t necessarily expect a lower tax bill in the mail — the amount owed might come as a shock to thousands who have grown accustomed to paying next to nothing.

Between the homestead deduction and other exemptions, the taxable assessments on 21,898 properties were less than 40 percent of their market value. Some were next to zero.

But the D.C. Council, during the last budget cycle, adopted a new policy to ensure all properties are taxed at 40 percent of their value, at a minimum. The average bill for the 21,898 homeowners will average $345.

Chief Financial Officer Natwar Gandhi has warned District leaders that property values “remain the largest risk” to his revenue forecasts while income and sales taxes are expected to rebound.

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