Reply to Tony Williams takes DC Govt to task for failing downtown and budget mismanagement

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I am not sure why this hasn’t gotten more attention, but holy cow Tony Williams and the Federal City Council just send the DC Govt a letter that the equivalent of a nuclear bomb. The letter was addressed to the CFO, probably for the optics of Williams not directly criticizing Bowser, but I’m not sure how it can be interpreted as anything but a shot at Bowser. 
https://www.federalcitycouncil.org/wp-content/uploads/2022/11/Letter-to-CFO-Glen-Lee-on-Commercial-Property-Vulnerabilities-11.14.22-final.pdf

Key highlights:
- Downtown commercial vacancy rate = 20% 
- 137 out of the 733 largest buildings downtown are over 25% vacant and that is expected to rise to 238
- DC budget wrongly assumes the commercial vacancy rate will decline 
- Investment in commercial real estate in DC is dead, properties cannot be sold and many are distressed

[b]The implications of the letter are that DC real estate investors are going to start demanding reassessment of property taxes purposes and that the assumptions underpinning commercial property tax rates are wrong and when this happens it will seriously negatively affect DC’s budget. They are saying that the city needs to plan now.[/b]

This article, which includes an interview with one of the co-signers of the letter is even more alarming. 
https://www.bisnow.com/washington-dc/news/office/office-owners-say-dc-faces-economic-disaster-due-to-lost-tax-revenue-116571

Key Highlights:
- Placing hope on residential conversions is not viable, because it would first require ”devastation”
- The process of reaching such a loss would significantly hurt DCs finances and the resulting residential property would further hurt DCs finances because it’s taxed at a lower rate
- Conversions are expensive and there is zero appetite for financing right now (all conversions underway were financed before rates went up)
- The Federal government is also reducing its office footprint at the same time as not aggressively requiring workers to return in person
- DC is headed for a fiscal cliff in 2024 when stimulus funds expire right as the lower valuations will hit the budget
- At that stage major cuts in services would be required or else there is a risk of a return of the Control Board

Yikes![/quote]

Probably true of homeowners too. The city's assessments are way out of whack with the market...[/quote]

Really? I haven't seen the residential real estate market soften at all.[/quote]

Mortgage applications are down by more than 40 percent. [/quote]

In DC? Where many people are paying with cash and not mortgages?

Again, I haven't seen prices in DC (proper, not the region) softening at all.[/quote]

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