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DC has a punitive property tax rate for vacant (and even more so for “blighted”) properties. Seems like it works ok, though there are loopholes and questions ab

by eli 8y ago

DC has a punitive property tax rate for vacant (and even more so for “blighted”) properties. Seems like it works ok, though there are loopholes and questions about how well it’s implemented. Also means that a developer who actually wants to clean up a blighted property and flip it now has to go through extra steps, since they surely don’t want to pay steep taxes in the meantime.

twelvechairs 8y ago
Which just gets reflected in the purchase price of the land so the one who let it go vacant to start with is the real loser.
Dylan16807 8y ago
How long does flipping take? The tax is only 3.3 percent per year for a vacant property. And while you're making improvements you can get exemptions. For 'blight' you need to make sure the outside of the building is intact; that shouldn't take particularly long.
jonstewart 8y ago
ANC Commissioner here. You can get an exemption from the vacant property status with a building permit. There are a couple problems with implementation. First, DCRA is such a fucked agency that they widely miss out on rating properties as vacant. The property two doors down from me has been vacant for two years and I’ve reported it a couple times and they still won’t rate it vacant (and I’m an elected official). The DC Auditor released a report last year highlighting this problem, which costs DC tens of millions a year. Second, most developers will create a separate LLC for each property and they’re happy to not pay taxes and have a lien put out, etc., on the probability that they’ll be able to flip it before foreclosure happens. If they do run into problems, the LLC lets them cut their losses. DC needs to move faster and blacklist two-bit developers who do this (I have a blighted property in my district where this has happened, and the District is out of options). DC’s new short-term rental restrictions might help free up some apartments. We’ll see.

by eli 8y ago

twelvechairs 8y ago

Which just gets reflected in the purchase price of the land so the one who let it go vacant to start with is the real loser.

Dylan16807 8y ago

How long does flipping take? The tax is only 3.3 percent per year for a vacant property. And while you're making improvements you can get exemptions. For 'blight' you need to make sure the outside of the building is intact; that shouldn't take particularly long.

jonstewart 8y ago

ANC Commissioner here. You can get an exemption from the vacant property status with a building permit. There are a couple problems with implementation. First, DCRA is such a fucked agency that they widely miss out on rating properties as vacant. The property two doors down from me has been vacant for two years and I’ve reported it a couple times and they still won’t rate it vacant (and I’m an elected official). The DC Auditor released a report last year highlighting this problem, which costs DC tens of millions a year. Second, most developers will create a separate LLC for each property and they’re happy to not pay taxes and have a lien put out, etc., on the probability that they’ll be able to flip it before foreclosure happens. If they do run into problems, the LLC lets them cut their losses. DC needs to move faster and blacklist two-bit developers who do this (I have a blighted property in my district where this has happened, and the District is out of options). DC’s new short-term rental restrictions might help free up some apartments. We’ll see.