D.C. assessments drop, but some taxes will rise
Saturday, February 27, 2010
District residents will continue to see a drop in their property assessments, but about 22,000 homeowners can expect their yearly tax bills to go up an average $345 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 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 that requires homeowners to pay on at least 40 percent of a property's assessed value. That will lead to the $345 average increase, McKeithen said.
His office released assessments for tax year 2011 and began mailing tax bills Friday. Property owners will have until April 1 to appeal the assessments.
Overall property assessments, both residential and commercial, declined by 6 percent. Commercial property dropped 10.6 percent, and residential property slumped by 3.7 percent.
Four neighborhoods, all east of the Anacostia River, had double-digit declines in residential 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 15.3 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."
Council member Yvette M. Alexander (D-Ward 7) noted that the tax office defines the neighborhoods by their core and surrounding communities, so the decline in Hillcrest includes Penn Branch and other areas. "Unemployment is going up. People are losing their jobs. There are really a lot of social factors we need to look at," she said, adding that more education is needed to inform residents that foreclosure is not their only option.
Alexander said the new assessments could provide relief for residents whose tax bills will be lower, but they hurt residents trying to sell.
The new law that sets a 40 percent threshold is a "revenue raiser" but also tries to bring parity to the current tax system, said Ed Lazere, executive director of the D.C. Fiscal Policy Institute. Because of the tax breaks, "owners have seen their tax bills go up not at all or at a modest rate," Lazere said. The tax bill "will come as a shock, but it is still relatively low and significantly lower than their neighbors'."
The waning property values differed from the 2010 declines that spread in double digits to wards 1, 4 and 5. Residents of those wards saw their property values slide but at a slower pace, according to the data.
Three neighborhoods, Glover Park and Berkley in Ward 3 and Central in Ward 2, showed small increases. "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, although 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."