Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Thursday, February 17, 2011

DC relies on commercial property tax revenues (not that we didn't know this)

Related to the point I made in a blog entry earlier in the week about comprehensive plan "theory" and the importance of including a section on public finance, the Washington Business Journal has an important story, "D.C. property values: The District's reliance on commercial property taxes."

From the article:

The 106 taxable D.C. properties with the highest assessed values in tax year 2011 generated nearly 22 percent of the city's property tax revenue in fiscal 2010 — $407.7 million of the $1.88 billion collected. Their total assessed value in 2011 is $19.7 billion, down from $22.2 billion last year. ...

The vast majority, 95, are commercial office buildings. Five are hotels — the Grand Hyatt at 10th and H is the most valuable of that group — and four are primarily residential.

The city's assessment is supposed to represent the estimated market value of a property, that is, "the most probable price for which you can sell your property given normal terms and conditions of sale." But the assessed value, especially in the commercial office market, is often a far cry from the sales price.

Invesco Real Estate, for example, bought 1111 Pennsylvania Ave. NW last year for $220 million. The property's 2011 value, according to the city, is $154.2 million.

The article includes a list of the 105 buildings.

The point being is that people who advocate X and Y and Z need to be conscious that programs cost money and somehow, the revenues need to come from somewhere.

DC is lucky in that unlike any other jurisdiction in the U.S., it keeps all of the income tax revenue it collects. But even so, commercial property taxes generate the bulk of the city's income, even though a goodly portion of the city's real estate isn't taxed (properties of the federal government and many nonprofits, including colleges and universities).

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