Anonymous wrote:The council is full of morons. I’m not sure the mayor is any better. Get ready for a control board redux.

Anonymous wrote:
The DC Council responded. Pinto and Henderson introduced a bill to provide 35 YEAR! property tax abatement for any commercial office conversions downtown for other uses. That is the full IRS depreciation schedule for commercial real estate. They need to do something, but this seems wildly irresponsible.
https://www.bizjournals.com/washington/news/2022/1...office-vacancy-incentives.html


You need to encourage businesses to come to DC or for landlords to convert their vacant property into something useful. There are no signs that people are going to move out of DC or stop buying homes to move in to DC so there's no need to offer any incentives to residential property owners. In fact, more of the DC budget is going to have to come from sales taxes and residential property taxes.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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

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.

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!

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

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

Mortgage applications are down by more than 40 percent.

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.

Obviously, housing prices here are declining and will continue to decline for the foreseeable future. Funny what happens when the Fed dramatically increases interest rates. The difference between a mortgage that begins with a seven and one that begins with a three is the difference between the gravity on Earth and the gravity on Jupiter. Everyone should contest their property tax assessments.

Anonymous wrote:The DC Council responded. Pinto and Henderson introduced a bill to provide 35 YEAR! property tax abatement for any commercial office conversions downtown for other uses. That is the full IRS depreciation schedule for commercial real estate. They need to do something, but this seems wildly irresponsible.
https://www.bizjournals.com/washington/news/2022/12/01/dc-office-vacancy-incentives.html

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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

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.

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!

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

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

Mortgage applications are down by more than 40 percent.

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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

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.

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!

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

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

Mortgage applications are down by more than 40 percent.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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

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.

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!

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

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

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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

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.

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!

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

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

The residential assessments are going to go up to recoup the lower tax collections from vacant commercial property.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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

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.

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!

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

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