Sustainable DC Implementation Plan
Just Economics - Rybeck
Dear Friends,
During our work last winter and spring, we came up with several goals and many action recommendations to implement them. Over the summer, the Office of Planning has used a consultant to sift through the action recommendations from all nine working groups to develop a feasible implementation plan.
On November 7th, the Office of Planning (OP) and the District Department of the Environment (DDOE) held a meeting to reveal the results of the consultant’s work. During the introduction, representatives from the Office of Planning and the District Dept. of the Environment mentioned some of the key factors in the selection process.
· Would the proposed action have a significant impact?
· Would the proposed action be short-term, medium-term or long-term?
· How much would it cost – and could the funding reasonably be obtained?
· What would be the impact on employment?
· What would be the impact on equity and inclusivity?
I have not done an exhaustive comparison between the consultants output and our input from last spring. However, at least one important recommendation was totally missing.
“Transform the Property Tax into a Value Capture User Fee,” might not have been understood by the consultants. But for our Working Group, we understood that the concept entailed reducing the property tax rate on privately-created building values while increasing the tax rate on publicly-created land values. This has several important beneficial impacts for the built environment that are good by themselves and that also help make other recommendations more effective and robust. While raising the same property tax revenue as the existing property tax (no cost to the District), the benefits would include:
· Buildings become cheaper to construct, improve and maintain.
o Weatherization and other building retrofit become more affordable – resulting in more retrofits, more energy savings and more jobs.
· Land prices are kept in check because higher taxes on land values reduce the profit from real estate speculation, thereby placing downward pressure on land prices.
· Shifting the property tax off of buildings and onto land makes It more expensive to hoard boarded-up buildings and vacant lots.
o Reduces speculation in vacant and boarded-up properties. This makes housing and business costs more affordable throughout DC – strengthening DC and reducing sprawl.
o Redevelopment of these properties, induced by this reform, will provide more housing, more commercial space and more jobs within DC.
o The greatest economic imperative for development occurs on high-value sites. These tend to be infill sites near urban infrastructure amenities (like transit) and these are the very locations where smart-growth development should occur. And, development in these high-value, infill locations makes walking, cycling and transit more convenient modes of transportation than single-occupancy vehicles.
o This measure also makes zoning more robust, because it is more difficult to hold onto vacant or underutilized sites. Today, land near transit that is zoned for development might sit idle or grossly underutilized. This tax reform motivates landowners to develop their land more fully, based on what zoning allows.
The net impact is that DC locations become more affordable for residents and businesses alike. This helps reduce sprawl and saves energy. Furthermore, energy-saving improvements become more affordable, resulting in more building retrofits, more energy savings and more jobs.
To support the inclusion of this important and cost-effective technique in the District’s Sustainability Implementation Plan, please forward this message to Laine Cidlowski, laine.c...@dc.gov and Dan Guilbeault dan.gui...@dc.gov
Thanks
Rick Rybeck, Director
Just Economics, LLC
1669 Columbia Rd., NW, Suite 116
Washington, DC 20009-3625
(202) 265-1288 fax