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Real estate values sink, especially for commercial properties

Residential neighborhoods in the District will continue to see a drop in their property assessments, but about 22,000 homeowners can expect to get an average $345 bump in their yearly tax bills 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 some 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 to require homeowners to pay at least 40 percent of a property's assessed value. That will add up to the extra $345, McKeithen said in an interview.

His office released assessments for tax year 2011 and began mailing them Friday. Property owners will have an April 1 deadline to appeal the assessments.

Overall property assessments, both residential and commercial, declined by 6 percent. Commercial property took the bigger hit at 10. 6 percent while residential property slumped by 3.7 percent.

Four neighborhoods, all east of the Anacostia River, saw double-digit declines in their 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 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."

The waning property values there differed from the 2010 declines that spread in double digits to wards 1, 4 and 5. Neighborhoods in those wards saw their property values slide at a slower pace, according to the data.

Three neighborhoods, Glover Park and Berkley in Ward 3 and Central in Ward 2, showed small gains. "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, though 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."

-- Nikita Stewart

By Christopher Dean Hopkins  |  February 26, 2010; 11:10 AM ET
Categories:  City Life , Economic Development , Nikita Stewart  | Tags: dc commercial real estate, dc foreclosure, dc property tax, dc real estate, dc residential real estate  
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Comments

great...lower property values means less money to improve these schools which means more families will consider leaving when their toddlers hit school age...vicious cycle...but i see more and more families entering the public school system...and the DCPS stats are steadily improving....see http://dc.gov/mayor/news/release.asp?id=1804&mon=201001

Posted by: bum1 | February 26, 2010 1:44 PM | Report abuse

this is a no brainer, with inflated housing prices during the mid 2000's and the prospect of gentrification of DC neighborhoods people paid too much for their DC homes and then found themselves in a predicament where they either could not afford their homes, they were in homes that were no longer worth what they were paying and many outsiders who were waiting for the gentrification of their new neighborhoods found out that the old neighbors were not moving out. Combine that with all the homes in foreclosure why would a person pay the prices realators know are inflated when they can buy a foreclosure. Thus the value drops.

Posted by: ged0386 | February 26, 2010 2:01 PM | Report abuse

There is a huge, glaring error in this article. It says that home owners will pay at least 40% of a home's value. They would all be doomed if so. Doesn't the author mean they would required to pay tax at the tax rate on 40% of the home's value?

Posted by: quentint1 | February 26, 2010 3:42 PM | Report abuse

"...require homeowners to pay at least 40 percent of a property's assessed value."!!!! you surely are mistaken! you mean pay taxes on at least 40 percent of a property's assessed value! don't you guys prrof your articles before publishing?

Posted by: genevieve2000 | February 26, 2010 4:24 PM | Report abuse

Walk away walk away from your mortgage...but by all means STAY in your house for FREE! After all, didn't you bail out the mortgage bankers? What did you get out of it?

Posted by: MisterGuerilla | February 26, 2010 6:05 PM | Report abuse

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