DC Mayor Fenty Proposing Increase to Vacant Property Fee
May 5th, 2010
Fenty proposing massive increase to District’s vacant property fee
Mayor Adrian Fenty is proposing to charge D.C.’s vacant property owners an annual registration fee up to 250 times what they pay now — the penalty for failing to put tenants in hundreds of empty residential and commercial buildings that pepper the city.
Through an amendment to the fiscal 2010 budget, Fenty suggests charging the owners of more than 900 vacant buildings a graduated schedule of registration fees that start at $250 and soar to a top rate of $5,000. The mayor also proposes to eliminate most existing exemptions, so that the owners of newly constructed buildings, properties under active rehabilitation or renovation, and buildings for sale or rent will have to pay.
If the D.C. Council adopts the new rates, a vacant residential building with an assessed value of $250,000 would have a $5,000 registration tab if it remains vacant five years later — roughly double its annual tax bill. Vacant lots would not be subject to the new fees.
“It’s really just to spur people to put their properties back into productive use,” said City Administrator Neil Albert. “It is a graduated schedule of fees that should provide the incentive not to have their properties sitting around gathering dust.”
The existing vacant property registration fee is $20 per residential unit or $20 per 400 square feet of commercial space. Fenty proposes to charge $250 the first year, $500 for the first renewal year, $1,000 the second, $2,500 the third and $5,000 the fourth.
“I would say they seem a little steep,” said D.C. Councilman Jack Evans, D-Ward 2, chairman of the finance and revenue committee. “But we have to look at it in the totality of what we’re trying to do here.”
The revised charges are expected to generate $102,000 this year, $663,000 in 2011, $992,000 in 2012, $1.95 million in 2013 and $4.2 million in 2014 when the $5,000 charge kicks in. Sean Madigan, a Fenty spokesman, said the administration is “really working to strike a balance in ensuring we give property owners ample time to return their properties to productive use, while respecting the quality of life in surrounding neighborhoods.” The revenue, Madigan said, will be used to pay for “enhancements” to the District’s nuisance abatement program, including “site visits so that we can better track what properties are merely vacant versus blighted.”
Fenty’s fee schedule is “onerous on many levels,” said Tanja Castro, a partner in Holland & Knight LLP’s real estate practice. Under the proposal, she said, the owner of a home ravaged by fire would have to pay to register their property as vacant, as would the owners of a second home who occupy the residence for only brief periods.
“It can become pretty onerous when you get into these higher fees without any exemptions,” she said.
The council’s decision to eliminate the vacant property tax disappointed scores of D.C. residents whose neighborhoods are pockmarked with empty buildings they say are magnets for crime and drug use. The abolished tax, $10 per $100 of assessed value, “was working well and having an impact,” said Cary Silverman, president of the Mount Vernon Square Neighborhood Association.
“If it does indeed become law the question is whether it will work and whether it will be enforced or not,” Silverman said. “The jury’s still out, but it’s better than nothing, which is what we have now.”
The vacant property issue is the subject of at least two other bills before the council. One, drafted by Councilwoman Muriel Bowser, D-Ward 4, implements graduated registration fees, eliminates exemptions, requires the owners of vacant buildings to carry liability insurance — $300,000 for a residence and $1 million for commercial — and establishes fines for failing to maintain a vacant property. Co-introduced by seven of 13 council members, that bill hasn’t emerged from committee.
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