Friday, February 19, 2010

Back to basics at the Franklin School

An op-ed that I drafted on the future of the Franklin School will be included in the print edition of Sunday's Washington Post.  You can read it online here.  Please comment on the Post website and pass the article on to others.

Over the past few weeks, a number of organizations and individuals have expressed strong support for putting the Franklin School back into educational use.  Some include the Federation of Citizens Associations, the Committee of 100 on the Federal City, Advisory Neighborhood Commission 2C, Commissioner Keith Silver (ANC 6C02), and former Historic Preservation Review Board Chairman Charles I. Cassell.

Considering that the city received only a single submission from a private developer in response to its Request for Proposals (a boutique hotel and restaurant), clearly, the momentum is building toward returning the building to a use that advances the education system and workforce development in the District.

Wednesday, February 3, 2010

Vacant or Blighted - Part II

Near northeast resident Tom Madison displays before-and-after photos of a dozen vacant properties fixed after imposition of the higher tax.

In 2009, the D.C. Council eliminated the vacant property tax, which had provided an incentive to renovate, rent, or sell vacant properties and put them back into productive use. This was a result of the interaction of several factors: (1) backlash after the D.C. Council voted to double the tax from $5 to $10; (2) more consistent enforcement of the law by the DCRA; (3) the occasional innocent owner unfairly getting hit with the higher tax; and (4) the recession and its impact on developers with properties awaiting financing and smaller owners that lacked funds to undertake renovation plans.

On January 27, the DC Council's Committee on Public Services and Consumer Affairs and Committee on Finance and Revenue held a hearing to discuss how the government should address vacant and blighted properties in the future.

Two bills are currently pending before the Council. B18-546, introduced by Councilmember Muriel Bowser, would keep the vacant property registration system, eliminate exemptions (which now apply only to the need to pay a nominal registration fee), provide for an upward sliding scale for registration fee depending on amount of time property is vacant (likely beginning at about $500 and increasing to a maximum of $5,000 per year), simplify the citation issuance process, and require property insurance for vacant properties. The bill is helpful, but not ideal.

B18-448, introduced by Councilmember Jack Evans, would eliminate the remaining vacant property registration system altogether and focus only on blighted determination. It would discard all of the good work of the DCRA over the past few years to compile an accurate list of vacant properties, as well as residents and community associations that have worked hand-in-hand with DCRA. Even without a vacant property tax, this list allows DCRA to closely monitor these properties for violations (litter/dumping, overgrown grass, unsecured, illegal billboards, as well as criminal activity) and determine whether they are "blighted."

Rather than a consisting of a handful of neighborhood activists, development-types, and DCRA officials, the hearing was standing room only.  Testimony lasted over six hours with quite a few fireworks as passions were high on both sides.

Tom Madison, representing the Capitol Hill North Neighborhood Association, came prepared with a dozen before-and-after photos of properties in his near northeast neighborhood that had been renovated and are now occupied as a direct result of imposition of the higher tax.  Madison was immediately followed by David Shames, a lender, who began his testimony, "you can't tax a property into good condition, can you?" and challenged those who say vacant properties have an adverse impact on the surrounding community.  As Shames did so, his neighbor on the panel, Madison, waved his photographs in the air.  [Video of Hearing]

For those who wonder if there is a significant difference between what properties are included in the definition of "vacant" and the definition of "blighted," consider the statistics below, provided in DCRA Director Linda Argo's prepared testimony:


Vacant Properties
“Blighted” Properties
Percentage of Vacant Properties that are “Blighted”









That's 2,346 absentee owners, many (or most) who do not even live in the District of Columbia, who received a massive tax break this year when their property tax went down from $10 per $100 value to just 85 cents.  [Note: These statistics likely include only vacant buildings, not vacant lots].  You can view a map of the vacant and blighted properties in your Ward, as identified by DCRA, below (click for full size maps).

The Council should adopt a vacant/blighted property system along these lines:
  1. Retain the vacant property registration system;
  2. Restore a higher tax applicable to vacant property (possibly at the prior $5 level);
  3. Provide for graduated increases in the tax the longer the property remains vacant (i.e. increasing progressively as high as $10 if a property is vacant for 10 or more years);
  4. Apply the vacant property tax to both vacant lots (unimproved land) and vacant houses and commercial buildings (improved land);
  5. Provide for limited, objective exceptions, such as (a) when a property is in probate, (b) within one year of purchase (to not discourage buying and renovating properties subject to the tax), (c) when the owner is serving in the military, and (d) when the owner is in long-term care due to age or a medical condition. Frequently abused exceptions, such those that permitted owners to evade the tax by placing a “for sale” sign on the property (while demanding above-market prices and refusing / ignoring offers), or by obtaining permits for nominal work, should not be incorporated into the new law;
  6. Continue to address “blighted” properties through DCRA’s aggressive use of currently available fines (i.e. for dumping, overgrown grass, or unsecured property) and the condemnation process (for unsafe and insanitary properties); and
  7. Provide an expedited appeal and refund system for property owners who are inadvertently charged the higher rate.
If the Council deems a vacant property tax undesirable in the current recession, particularly with respect to substantial projects that await financing, then it might consider the measures above along with a one-year moratorium on the tax for 2010 applicable to specific development zones that could be extended by the Council if absolutely necessary.

Here are seven reasons why the vacant property tax should be restored.

Monday, February 1, 2010

Dual Roles

When President Obama was elected, he established a new ethics rule that barred new officials from working at an agency at which they lobbied over the past two years or from making policy on any matter involving their former employers or clients. 

The District of Columbia has a very different approach.  Here, an individual can be appointed (or elected) to an important public position and continue employment with a law firm that represents those who are regulated by the government entity.

In the early 2000s, residents were frustrated with the course of the District's Alcoholic Beverage Control (ABC) Board.  They fought tooth and nail for the ABC Board to impose restrictions and penalties on problem businesses that were the center of public drinking, loitering, litter, public urination, and underage drinking.  Hearings went on forever with no result.  Even when Advisory Neighborhood Commissions (ANCs) and community organizations reached agreements with the owners to curb the abusive practices, the ABC Board rejected the agreed-upon solutions in favor of more lenient approaches.  Just before I joined the Logan Circle ANC in 2002, it had discontinued all activity related to ABC licenses out of sense of frustration.  

Part of the ABC Board's lack of responsiveness may have stemmed from the fact that the Chairman of the ABC Board at the time was Roderic Woodson.  While serving as Chairman of the ABC Board, Woodson also worked at Holland & Knight, a law firm that represents the alcoholic beverage and hospitality industries.  Real or imagined, there was at least an understandable perception of a conflict of interest.

The Administration may have changed, but the practice of appointing an individual to represent the public while that individual is also holds another job that represents the regulated parties has not. 

In the article reprinted below, an outraged Peter Tucker draws attention to the latest controversial appointment that appears to be moving forward.  What is your view?

Bogged Down by Patton Boggs:
Betty Noel vs. Vicky Beasley
Peter Tucker

If the DC city council approves the mayor’s nomination of Vicky Beasley to head of the Office of the People’s Counsel, another Patton Boggs employee will fill a top DC government position. Since 1975, the Office of the People’s Counsel (OPC) has been “the advocate for consumers of natural gas, electric and telephone services in the District." Utility companies like Pepco, Verizon, and Washington Gas are given near-monopoly status by the District government. When a consumer has a problem with a utility, there is likely to be no government agency to turn to for help, aside from OPC. At the head of OPC is the consumer oriented Betty Noel, who is completing her unprecedented sixth three-year term as People’s Counsel.

At a Saturday hearing on the District’s utilities, witness after witness, from all over the city, criticized the performance of the utility companies (especially Pepco). They praised Ms. Noel’s experience, professionalism, and willingness to stand up to — and, if need be, sue — the utility companies on behalf of consumers. There was an overwhelming consensus that Betty Noel should be renominated for a seventh term, and that Vicky Beasley wasn’t qualified for the position.

While Vicky Beasley possesses minimalexperience with utility regulation or consumer issues, she has experience of another kind: according to Patton Boggs’website, “Ms. Beasley’s clients include telecommunications entities [and] quasi-governmental agencies.”  Unlike Betty Noel, who has made a career of fighting against greedy utility companies, Vicky Beasley apparently fights for them. I called Ms. Beasley and asked her to specify which clients she serves, but she declined to say and asked that I direct any questions for her to the Office of Boards and Commissions (which then referred me to the Mayor’s spokeswoman, Mafara Hobson, who has yet to respond to my questions).

District residents have experience with Patton Boggs employees in top government posts. Aside from the mayor and the chair of the city council, DC’s third most powerful elected official may be the chair of the committee on finance and revenue. This position is currently held by Councilman Jack Evans, an employee of Patton Boggs.  As chair of the finance committee, Mr. Evans has been instrumental in placing huge amounts of precious taxpayer dollars and public land into private hands, with little public benefit to show for it: Examples include the baseball stadium (more than $725 million), the Convention Center ($850 million), and now the Convention Center Hotel ($272 million), to name a few publicly funded, Evans-inspired projects.

There is a great deal at stake in who fills the position of People’s Counsel. The OPC is the only thing standing in the way of the utility companies getting the ever-higher rates they covet. If the council votes to confirm Vicky Beasley, a Patton Boggs employee whose clients include “telecommunications entities” and “quasi-governmental agencies,” OPC may head in a radically different direction; a move that utility companies will surely cheer.