Negative impacts from "the market economy" and the "local" real estate market

Harry Jaffe of the Washington Examiner waxes poetically over the sale of a DC office building for a high price to German investors, in "Foreign investors still buying chunks of downtown."

There are at least four negative aspects of Washington's Central Business District no longer being a local market:

1. Prices for properties are driven by factors having little to do with the local market;

2. This drives up prices for space, especially for retail space on the ground level, pricing all but the most profitable uses out of the Central Business District, impacting independent retailers and startup businesses the most;

3. The reproduction of the CBD into a national-international market trickles down and impacts other submarkets throughout the city especially Capitol Hill (the Louis Dreyfus Group is a big player there), Georgetown, and Friendship Heights in turn increasing prices there, and having negative impacts on the development of a local economy;

4. At the same time, the property tax assessment methodology employed by the DC Office of Tax and Revenue is shaped by the reproduction of the downtown office market, so that all commercial properties across the city get valued as if they can be office buildings purchased by international investors and pension funds, further increasing prices and in turn having negative impact on the development of independent retailers and startup and innovative businesses.

For more on point #4, see:

- Testimony -- Historic Neighborhood Retail Business Property Tax Relief Act (2006)
- A solution for the overtaxing of properties in neighborhood commercial districts (2009)
- Displacement of retail businesses through increasing property tax assessments (2005)
- Forcing Displacement by the disconnection of tax assessment models from public policy goals (2005)
- Globalization of the DC real estate market catches neighborhood commercial districts up in the wake (2006)
- Avoiding the real problem with DC's property tax assessment methodologies (2007)
- The hot real estate market Downtown and Georgetown (2007)
- Even more on commercial property tax assessment policies (2007)