District property values jumped an average of 14.6 percent last year, with the fastest appreciation occurring in some of the city's poor and working-class neighborhoods, according to an analysis of assessments scheduled to be released today.
Prices increased the most in Trinidad, a hardscrabble neighborhood in Northeast, which showed a nearly one-third increase in values since last year. Prices also rose more than 25 percent in Petworth and Columbia Heights, two fast-gentrifying neighborhoods in Northwest.
The new figures show a wave of increasing home values that is washing eastward across the city, said Thomas Branham, the District's chief assessor. That wave will bring higher taxes for homeowners and increase the pressure on city officials already struggling to find ways to maintain an inventory of affordable housing for longtime residents and newcomers.
The rising property values in the District mirror those across the region. In Montgomery County, average property values increased 65 percent in the past three years. Home values in Alexandria have increased 131 percent since 2000. In neighboring Arlington County, where property owners received assessment notices last month, residential values were up 24 percent in the past year.
Branham said affordable housing is scarce and getting scarcer in the city. He said one reason values are skyrocketing in such neighborhoods as Trinidad, Eckington and Anacostia is that they still offer buyers affordable properties.
"If they are looking around town at places that cost $300,000, $400,000 or $500,000, they can get comparable living spaces in Trinidad for substantially less," Branham said. "And they don't really stop to say that that $200,000 price tag should be $180,000."
Prices of District real estate have not cooled despite the hunches and hopes of taxpayers, Branham said. "Most people say that the market has finally cooled off and flattened. But the truth of the matter is that 2004 was just as strong as 2003, and it didn't lose any steam at all," he said.
Some pricey neighborhoods such as Georgetown, Kalorama, Wesley Heights and Palisades, where values have risen 94 percent or more over the last three years, showed a below-average increase in the latest assessments. But Braham noted that the increases in those neighborhoods still were roughly 12 to 14 percent.
"They are still increasing by 1 percent a month or greater," Branham said. "And they were growing at 20 percent or 30 percent when other areas weren't."
The increasing property values and resulting property tax increases have created a flood of revenue into city coffers but have also put pressures on changing neighborhoods. In some cases, the housing boom has led to clashes and misunderstandings between longtime residents and affluent newcomers.
D.C. Council members and others worry that rising prices are locking out prospective buyers who want to live in the neighborhoods where they grew up and putting pressure on elderly homeowners on fixed incomes who can't afford higher property taxes.
"Something's got to give,'' said Anthony Hood, president of the Woodridge Civic Association. He said rising taxes are hurting longtime residents, "especially the seniors and those who have been here during the times when it wasn't booming and nobody was interested. They are the ones who stuck it out."
The city already caps yearly tax increases on residential property at 12 percent and gives seniors a 50 percent discount.
But the political pressure is likely to increase once residents get their new assessments, which began arriving this week. These assessments will be used to formulate the next year's tax bills. Residents' challenges must be filed by April 1. Residents also will receive 2005 tax bills by early next week. Those bills are due March 31.
Council members have proposed cutting property tax rates and lowering the cap on annual residential property tax increases from 12 percent to 5 percent.
Council Chairman Linda W. Cropp (D) said the council probably will approve some sort of tax relief this year. She has said she wants an open, thorough debate on the options.
But the latest numbers could change the debate. In recent years, the residents of affluent neighborhoods west of Rock Creek Park, such as Georgetown, Cleveland Park and Foxhall, have complained the loudest about increases in assessments and taxes. Some opposition to tax relief was based on the help it would give to the most affluent in the city.
Now that neighborhoods in the eastern part of the city are seeing similar increases, some wonder whether tax relief will be higher on the agenda of political leaders.
"Who's getting the benefits of the cap now?" asked Matt Forman, president of the Kalorama Citizens Association.
Forman said he is not gloating. His assessment has doubled over the past three years, and the average assessments in his neighborhood climbed 12.8 percent in the latest numbers.
"Twelve percent is still a lot," he said. "My income didn't go up 12 percent."
