Economic change and mitigation protocols: H Street edition

One of the things that was a "downer" on the event was how some H Street business owners-property owners aren't positioned to benefit from the physical and transit improvements to H Street. Instead, they haven't been able to pay their property taxes, and tax liens are scheduled to be auctioned for their properties later this month.

I was impressed that they organized and were out in force at the press conference, and presumably some of the journalists interviewed them.

The problem for me was that they preferred to make their argument in racial terms, focusing on how the H Street Cooperative, a business group, received money to do marketing for their H Street businesses during the construction, and how the marketing efforts of the Cooperative targeted the nightlife businesses, primarily those involving the financial interests of nightlife proprietor Joe Englert, who has focused on developing a critical mass of nightlife businesses on H Street, which has significantly repositioned the so-called "Atlas District" entertainment section at the eastern end of the corridor into a regional destination.

They made the point that their business declined also during the construction period while their property tax assessments went up as much as 350%, and that they, African-Americans and/or Africans didn't receive comparable levels of assistance.

I think the issue is a bit more complicated. And it seems I wrote about this in March in "Is Commercial District Revitalization Racist?"

Mostly "the government" thinks that marketing is enough, such as the advertisement pictured to the left that was placed on Metrobuses a couple years ago, at the start of the construction period.

But H Street was a hell hole then and few businesses provided much of a reason for people to go shop there anyway, whether or not the streetscape reconstruction project made it extremely difficult to go there to begin with.

The H Street Cooperative received money to do marketing, and the city paid for a shuttle bus serving the district at night (that's another story I've written about many times as I thought the shuttle bus was a waste).

What needed to be done was the creation of a serious mitigation program, to reduce the negative effects on the businesses during the construction period.

The marketing and shuttle bus helped some businesses but not all businesses.

This of course is complicated by the fact that many of the businesses on the corridor would be defined as "marginal" using standard criteria such as that employed in the recent Retail Action Agenda planning process.

By definition, marginal businesses are at the most risk during periods of significant change, such as a streetscape reconstruction project. This was only accentuated by the economic downturn.

Each business should have been visited, interviewed, and assessed, and the city could have developed a deeper and fine grained mitigation program based on the findings.

Many of the businesses needed more help than marketing would ever provide, and increasing their property taxes at the same time as their revenues were dropping was devastating.

A mitigation program should have provided technical assistance to businesses, and a moratorium on commercial property tax increases in the H Street corridor, and probably a moratorium on tax sale of properties, if it could be determined that the ability to pay taxes was significantly impacted by the construction process. But such a program was never developed.

That's what the impacted property owners should be focusing on, and that would be something that most people can understand--how can your property taxes, based theoretically on the current value of your property in terms of its ability to generate revenue (this isn't how the city does it, see "Testimony -- Historic Neighborhood Retail Business Property Tax Relief Act") go up when your revenue goes down?

I don't see it fully as a racial argument, although there is no question that this is but one more skirmish in the process of neighborhood change, which is based on income issues (a/k/a "gentrification") and picks losers and winners, depending on whether or not your business model is congruent with the changes.

But making it out to be a racial argument solely decreases the likelihood that those people negatively impacted by the changes will get the kind of assistance and support they probably deserve.

In the meantime, I think their properties should be removed from the upcoming tax sale, to provide more time to develop a fairer resolution.

(Note that Jane Jacobs wrote about similar kinds of effects from other types of government intervention and actions concerning development in Death and Life of Great American Cities, in increasing property tax assessments is one strategy for getting property owners to sell out or move their businesses.)