Testimony on adding residential buildings as paying members of business improvement districts in Downtown DC

I wrote earlier about the Downtown DC Business Improvement District's proposal to include multiunit residential buildings as an eligible class of property in its assessment district.

-- "If apartment buildings are "forced" to join Business Improvement Districts, there must be a way for residents to be represented on BID boards independent of property owners"

I am fine with the inclusion of such properties as residents are big beneficiaries from the programming and public space management activities by the BIDs. And I don't see a justification for resident owners -- in cooperatives and condominiums -- of being excluded since they garner significant appreciation in property values as a result of a BID's management, planning, and maintenance activities. But I do think more attention needs to be paid to ensuring the inclusion of residents on BID boards and committees. This is my testimony from a couple weeks ago.

Testimony

Bill 21-905 “Downtown DC Business Improvement District Amendment Act of 2016

Committee on Finance and Revenue

Council of the District of Columbia

Wednesday November 16th, 2016

Thank you Councilmember Evans and members of the Committee for the opportunity to speak to you today about Bill 21-905 concerning the inclusion of multiunit residential buildings in the assessment class for the Downtown DC Business Improvement District.

Including residential properties in BID districts makes sense. Such property types are already included in other BID assessment districts elsewhere in the city. It is eminently reasonable to include these types of properties in the assessment district for the Downtown DC BID.

The importance of formalizing the inclusion of residents in BID governing and oversight processes. However, Bill 21-905 affords the opportunity to raise an important issue, inclusion of residents in BID governing and oversight processes.

BIDs in and around the Central Business District especially are increasingly mixed use districts including commercial office and retail properties, civic assets, and residential buildings among the many property types represented, although only some are assessed the BID tax. It was not anticipated when the process for creating BIDs was developed in the late 1990s that these geographies would become home to thousands of residents mixing with commercial activities.

The act and regulations enabling the creation of BIDs allows for a diverse membership on BID boards, including residents, although in reality such boards are dominated by commercial property owners, as it is commercial properties that provide the bulk of the assessment revenue which funds BIDs.

Currently, only the Mount Vernon Community Improvement District includes residents, albeit representatives of resident owner-occupied buildings, that is condominium properties, on its board.

No BID has a broad category of representation for residential tenants even though increasingly BIDs are populated by residents and ultimately the assessment is paid, pro-rata, by residential tenants as part of their rent.

The Council should address in its consideration of this bill, and when other relevant BID matters come before Council, including reauthorization of BIDs and the creation of new BIDs the representation of residential tenants on BID boards.

Ensure resident tenants, not just resident owners, can serve on BID boards. This is especially important because by default BIDs are the primary planners and managers of their geography, including the public spaces therein, it is important to raise the matter of lack of direct representation of non-property owning residents, that is, tenants, on BID boards. Building owners are represented on BID boards but it cannot be presumed that they can adequately represent tenants in terms of their interests as citizens in the neighborhood in which they reside.

In San Francisco, the Dogpatch and Northwest Potrero Hill Green Benefits District specifically includes a board representation category for tenants. Similarly, in the Charles Village Community Benefits District in Baltimore, which includes a variety of residential property membership categories, including even single family properties, in its assessment district. These offer models going forward for the inclusion of residential tenant members on BID boards. In DC, the Eastern Market Community Advisory Committee has members appointed by various organizations, as well as a community member who is elected by the board, but any resident is eligible for nomination. These and likely other models demonstrate that it is possible to include residential tenants on BID boards.

It has been suggested in testimony that the Downtown BID will add staff to address resident participation and engagement issues, hold various public meetings, etc. But it is still important to offer the opportunity for tenants to be on the BID board, although we must recognize that many residents may not be interested in serving, and may have shorter term goals and interests when compared to property owners.

Inclusion of condominiums and cooperatives in BID assessment districts. Some testimony today referenced the new Southwest DC BID, which will include apartment buildings but not cooperatives or condominiums. Similarly, earlier testimony suggests that there could be financial hardship on the part of condominium owners, especially as they age, if condominium buildings were to be included in the eligible assessment district.

I argue that condominium owners benefit extraordinarily in terms of added appreciation and property value from the services of BIDs, which indirectly and directly improve the area around residential properties in their districts. There is no real justification for condominium and cooperative buildings to be automatically excluded from eligibility for assessment in BID districts because it is not in the public interest to support “free riders.” It is reasonable for condominium and cooperative owners to pay into BIDs, in recognition of the extraordinary financial benefits that they reap from BID services.

Thank you for the opportunity to offer this testimony.