Designating ‘blighted’ properties has been slow going The District’s consumer affairs agency has fewer than 60 days to compile a list of every “blighted” building in D.C. so those properties can be taxed at a significantly higher rate — a challenge that could deny city coffers millions of dollars if it is not met.
Instead of taxing most vacant real estate at $10 per $100 of assessed value, as had been the case for the past two years, the D.C. Council, using the fiscal 2010 budget, decided that only “blighted property” should be subject to the $10 rate.
But a limited timeline and confusion over what constitutes “blight” could mean few properties are captured by the highest tax. The Department of Consumer and Regulatory Affairs must submit a list of all properties that meet the conditions to the Office of Tax and Revenue by mid-January, so that tax bills can go out on time.
“There’s just no way they can have this ready for this tax season,” said Cary Silverman, president of the Mount Vernon Square Neighborhood Association. “The whole thing will have to be on hold.”
The blight property tax is more than 10 times the Class 1 residential rate of 85 cents, yet blighted properties are expected to generate only $200,000 in tax revenue a year, according to a fiscal impact statement. DCRA would need to list only 10 blighted homes, if each was assessed at $200,000, to garner the city $200,000 in tax revenue.
In some neighborhoods, residents say, there are 10 to a block.
A “blighted” property, under the new law, is a building determined to be “unsafe, unsanitary, or which is otherwise determined to threaten the public health, safety, or general welfare of the community.” It is DCRA’s call whether a building with no doors, broken windows, or structural failures is blighted.
The agency “has a good indication of the houses that have consistently maintained violations,” said Ward 4 Councilwoman Muriel Bowser, who has oversight of the agency. That list is “a good starting point,” she said, but there may be legislation needed to clarify the council’s intentions.
“We don’t want to roll back any taxes for people who continue to be scofflaw owners,” she said.
The decision to eliminate the vacant property tax in favor of a blight tax has not gone over well in some D.C. neighborhoods. While it occasionally captured innocent owners, the tax worked to bring languishing vacant lots back into productive use, community leaders say.
Projected revenue gains, losses
» Revenue gained from blight tax: $800,000 through 2013.
» Revenue lost by eliminating vacant tax: $48.9 million through 2013.
