Feeling the Pinch Of D.C.'s Prosperity

The District that year valued his property at $485,000, resulting in a tax bill of about $9,000. Next year, the assessment is to rise to $2.3 million and the tax bill to more than $42,000. The increase, he said, is forcing him to contemplate selling, closing or redeveloping his property. "No matter what, you can't charge $20 for a hamburger," he said.

Adele Robey and her husband, Bruce, opened the H Street Playhouse in 2004 when the corridor east of Union Station was lined with vacant properties. Since then, nearly a dozen clubs and restaurants have moved in, and developers are building luxury housing.

In 2006, after the Robeys renovated their property, the District valued the theater at $514,000, and the assessment will top $1 million next year. Their tax payments, also doubled since 2006, will exceed $19,000 in 2008.

"Emotionally I feel sort of -- betrayed is a strong word, but it's the word I have in my conscience -- by the District," Adele Robey said. She and her husband are considering adding to the theater to build condominium apartments.

For all their angst, Stiegman and the Robeys can comfort themselves with the knowledge that they own their properties. Harry Schnipper, proprietor of Blues Alley, the venerable Georgetown jazz club, is not so fortunate.

Like many commercial leaseholders, Schnipper said he pays not only the rent but also the property taxes. In 2006, when the club, in an alley off Wisconsin Avenue NW, was assessed at $683,000, Schnipper's tax bill was more than $12,600. In 2008, the bill will approach $20,000.

Schnipper said he is prepared to move Blues Alley, which has hosted the likes of Dizzy Gillespie and Sarah Vaughn, out of Washington if the assessment continues to rise. "These kinds of places define neighborhoods," he said. "If you want to preserve the character and personality of a place, you've got to come up with a plan."

For decades, developers gravitated to the suburbs as residents migrated from crime-plagued and financially stressed cities such as Washington and New York. But in the 1990s, as crime rates declined and land in outlying areas was developed, investors started returning to cities, triggering a wave of construction, driving up land prices and attracting the kind of retailers that had gravitated to the suburbs.

In Manhattan, for example, avenues from Broadway to Lexington have been taken over by chain drugstores, bank branches and coffee bars, blurring the line between city and suburb and fostering concerns that what traditionally defines an urban area is fading.

"If the city looks like the suburbs, where's the sense of metropolis, and all those things associated with it -- the mix and diversity?" asked Jerilou Hammett, an editor of the recently published "The Suburbanization of New York: Is the World's Greatest City Becoming Just Another Town?"

In Washington, commercial property values rose nearly 28 percent, on average, from 2006 to 2007, District records show. The average increase for 2008 is 21 percent.

The jump has been more dramatic in some neighborhoods, including Columbia Heights, where the increase was nearly 50 percent from 2006 to 2007, and Trinidad, where it was 42 percent. The edges of Capitol Hill -- H Street, Barracks Row, the Navy Yard -- experienced a surge of 77 percent in that period.