D.C. property values rise, thanks to strong downtown market
Wednesday, March 2, 2011; 7:53 PM
In a sign of recovery for the District's real estate market and its economy in general, new property assessment data indicate modest growth in the city's tax base.
The 6.3 percent increase makes up for the ground lost by assessments delivered last year, which had declined by about that much. The new figures stand to be bittersweet for taxpayers, many of whom will see bills rise as their property values increase - especially commercial property owners.
Almost all of the citywide increase is driven by rising business property values, according to figures released by the D.C. Office of Tax and Revenue. Commercial real estate - taxed, in some cases, at more than twice the rate of residences - has risen in value by 16.3 percent. Meanwhile, residential values just about stayed put, rising by 0.12 percent citywide.
Property owners this week started receiving assessment notices for the bills they will begin paying next March.
The data comes one day after Chief Financial Office Natwar M. Gandhi, who oversees the tax office, announced that city revenues have been revised upward by $105 million, driven mostly by the recovering commercial real estate market.
In an analytical report delivered last month, the city's head appraiser, David W. Fitzgibbon, said the new figures "reflect some good news."
"While the bleeding has not stopped, it now appears that the patient will not be lost," Fitzgibbon wrote. "The commercial market, in particular the office market, shows a dramatic increase with values increasing, by some accounts, as much as 20 percent."
Most of the increases were seen in the city's central business district. Of a $10.4 billion increase in the city tax base, the "central" subdivision that includes the bulk of downtown represented two-thirds of that growth.
Richard H. Bradley, executive director of the Downtown Business Improvement District, said the new figures are a reminder that downtown real estate remains the "economic engine" driving the city budget. Property taxes represented about a third of the $5.8 billion of local revenue that the city collected in fiscal 2010.
Bradley called on city officials, faced with closing a $322 million budget gap, to maintain funding for services that increases downtown's desirability to renters and owners - such as late-night Metro service, city-run Circulator buses and traffic control officers.
"It's important to sustain this," he said. "It's the goose that lays the golden egg."
On the residential side, property values in Capitol Hill and the city's western neighborhoods generally held their value better than in northern and eastern neighborhoods. The Garfield subdivision in Ward 3 had the biggest increase in the city, 7.3 percent; Capitol Hill rose 2.7 percent. The Ward 7 neighborhoods of Hillcrest (-8.9 percent) and Deanwood (-9.2 percent) saw some of the largest decreases.
Property owners have until April 1 to appeal their assessments with the tax office.