D.C. Property Values Spiral Higher

Latest Assessments Show Dramatic Increases in SE

Property values in Congress Heights, an older community in Southeast Washington, have increased 41 percent, nearly double the city's average, an indication that the skyrocketing housing boom has crossed the Anacostia River.

The figures are contained in assessment notices that the D.C. Office of Tax and Revenue mailed Friday to more than 173,000 residential property owners. On average, assessments citywide will increase 21.8 percent, and even with legislative changes designed to limit property taxes, most homeowners are expected to pay slightly more when they are taxed on the new values next year.

Thomas Branham, the city's chief property assessor, said the assessments reflect current market rates and mirror the city's continuing housing boom. Assessments rose an average of 14.6 percent in 2004.

"Many people thought the market may slow down last year, but it did not," Branham said. "There was as much demand for housing and property appreciation . . . in 2005 as occurred in any of the past three years."

For a second consecutive year, working-class neighborhoods will experience some of the greatest increases. Last year, the increase in Congress Heights was 13 percent. In Northeast Washington, assessments in the Trinidad community will increase by 47 percent, compared with 33 percent last year. And in Brentwood, also in Northeast, assessments will increase 41 percent. In Southeast, the Anacostia community's assessments will rise 30 percent compared with 18 percent last year.

Branham said housing in the District is in such high demand that buyers are moving to neighborhoods with more affordable prices, driving up assessments. The median housing price in the city is $400,000.

"You really need to go to areas that are less developed, such as Southeast and Northeast," Branham said. "They still have some homes priced in the $100,000 to $200,000 range."

The city places a 10 percent cap on yearly tax increases for owner-occupied properties. In addition, the D.C. Council provided relief for homeowners by reducing the property tax rate from 96 cents per $100 of assessed value to 92 cents. The homestead deduction -- the amount homeowners who live in their properties deduct before they apply the tax rate -- also was increased from $38,000 to $60,000.

With a 22 percent increase, a house previously assessed at $400,000 would be assessed at $488,000. With the $60,000 homestead exemption and the tax rate reduction, that homeowner would pay about 10 percent more than last year, according to Branham. If the assessed value increases by less than 10 percent, that homeowner's tax bill would decrease, he said. Residents who disagree with their assessments have until April 3 to file an appeal.

The increases in property assessments in the District are similar to those across the region. In Maryland, the average increase statewide is 20 percent. Home assessments in Montgomery County have risen nearly 70 percent in the past three years, according to state officials. In Arlington, assessments increased an average of 18.25 percent, compared with a 24 percent climb in 2005, according to notices mailed last month. Fairfax assessments also rose at a slower pace than the previous year.

Branham said not all properties in the District will change in value at the same rate. Some of the communities that experienced a rapid appreciation in the past few years are not appreciating as much now, Branham said.

The demand for affordable housing has moved to such working-class areas as Congress Heights and Anacostia.

Calvin Lockridge, a 32-year resident of Congress Heights, said that in the past two years, his property has appreciated from $175,000 to $193,000. Next year, the property will be assessed at $283,000, although he will only pay tax on $185,000 because of exemptions, according to Branham. Lockridge's tax bill, which is $779 this year, probably will increase to $852 next year.

"It's going to be a hardship . . . for older people who live on a fixed income," said Lockridge, 74. "It would be fine if I was going to sell my house."

Les Johnson bought his rowhouse in Anacostia two years ago for $118,000 and expected his property value to be higher than his new assessment reflected.

"I generally tend to see property appreciation in Ward 8 as a good thing," Johnson said. "Overall, anything that helps to remove unsightly blight is a positive with me."