Thursday, April 17, 2008

Vacant Property Owners Beware

While Mount Pleasant doesn't suffer nearly as much as some other Northwest neighborhoods, we do have some vacant residential properties. As for commercial properties, Mt Peasant Street has recently collected several prominent vacant storefronts; Mt Pleasant Supermarket, Super Save, Speed Wash and EBC. Its disheartening, but with a relatively strong local economy and a local business environment which favors development, those properties shouldn't be barren for long. Whether we like the business that take up residence is another story...

The city wants to get tough on property owners who let their properties sit vacant (unoccupied for more than 30 days). Recently, city agencies have received criticism for allowing the "conversion loophole" to landlords; forcing tenants out of an apartment building in order to convert into condos. Well, as these properties sat vacant in the meantime, the city was not collecting the current vacancy tax ($5.00 per $100.00 assessed value) on the properties. Double negative. The property owners were avoiding the condo conversion fee when the properties were empty, but the city was not enforcing the vacancy tax either. Mostly an enforcement issue there, but still an issue. City Council cleaned up some of the mess with this bill.

On the legislative front, the Mayor's 2009 budget proposal calls for increased taxes for vacant properties. The new rate would be double; $10.00 per $100.00 assessed value, a 10% tax rate. Doubling the rate is significant and would affect a fair number of properties. $10.00 per $100.00 of assessed value is a lot of money to hand over to the tax man. Perhaps it will encourage vacant property owners to develop or sell the properties to someone who will. It would also reduce blight in established and up and coming commercial corridors. I'm not sure how admonishing these owners compares to the land hungry office developers who build office space like its going out of style, but can't lease floor after floor after floor. Maybe they're waiting for the end of the recession, too. But I digress.

According to the Washington Business Journal, there were over 300 commercial properties which "qualified" for the vacancy tax rate as of this April. That number does not include every vacant storefront. I'm not a lawyer, but I suppose if the tenants are still paying rent, or the lease is in dispute (i.e. Super Save) there is no technical vacancy. Many of the properties were around Mount Pleasant, but only one, 3360 16th Street, is really in the neighborhood. Hopefully the higher tax rate will prod some owners to "do something" with their properties and not just sit on them until they can cash in under the most profitable conditions. I despise those owners, or commercial squatters, as much as I despise house flippers for buying in developing neighborhoods for profit motives only. Reprehensible. Perhaps this bill will curb some of that behavior.