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Posted at 11:10 AM ET, 02/26/2010

Real estate values sink, especially for commercial properties

Residential neighborhoods in the District will continue to see a drop in their property assessments, but about 22,000 homeowners can expect to get an average $345 bump in their yearly tax bills because of a new law, tax officials said Friday.

Those property owners have benefited from tax relief programs, including a homestead deduction and a senior citizen tax break. In some cases, the combination of programs resulted in some homeowners paying little or no taxes, said Richie McKeithen, director of real property tax administration in the Office of Tax and Revenue.

The D.C. Council approved legislation last year to require homeowners to pay at least 40 percent of a property's assessed value. That will add up to the extra $345, McKeithen said in an interview.

His office released assessments for tax year 2011 and began mailing them Friday. Property owners will have an April 1 deadline to appeal the assessments.

Overall property assessments, both residential and commercial, declined by 6 percent. Commercial property took the bigger hit at 10. 6 percent while residential property slumped by 3.7 percent.

Four neighborhoods, all east of the Anacostia River, saw double-digit declines in their assessments. Hillcrest, the Ward 7 neighborhood of Council Chairman Vincent C. Gray (D) and Council member Kwame R. Brown (D-At Large), led the decline at 15 percent, followed by Ward 8's Congress Heights (13.2 percent); Ward 7's Deanwood (12.6 percent) and Ward 7's Randle Heights (10.8 percent).

"They got slammed with a lot of foreclosures," McKeithen said. "It's hard to compete ... when so many houses in foreclosure are on the market."

The waning property values there differed from the 2010 declines that spread in double digits to wards 1, 4 and 5. Neighborhoods in those wards saw their property values slide at a slower pace, according to the data.

Three neighborhoods, Glover Park and Berkley in Ward 3 and Central in Ward 2, showed small gains. "These are west of the (Rock Creek) park ... not far from Georgetown. Clearly, the market, the desire to be in these neighborhoods was strong. As the market rectifies itself, you'll see it in those areas first," McKeithen said.

Commercially, increases and decreases were scattered throughout the city from Anacostia in Ward 8 to Brookland in Ward 5 to Palisades in Ward 2, though the declines were more dramatic than the gains.

"The good news is that we aren't seeing the large decreases of other cities around the country that are at 25 percent," McKeithen said. "Washington, D.C., is still a desirable place because of the influence of the government."

-- Nikita Stewart

By Christopher Dean Hopkins  |  11:10 AM ET, 02/26/2010

Categories:  City Life, City Life, City Life | Tags:  dc commercial real estate, dc foreclosure, dc property tax, dc real estate, dc residential real estate

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