No Vacancy: How Nuisance Properties Turn Around
My column this week looks at one example of how the blight tax gets results. The story has repeated itself, by the hundreds, all around the District—mostly because of a guy named Reuben Pemberton.
Pemberton is in charge of the Department of Consumer and Regulatory Affairs' Vacant Building Enforcement Unit (recently renamed from the Vacant Property Unit, to correct the impression that he deals with empty lots, which are actually another agency's responsibility). It's his job to inspect, register, and tax all vacant and blighted properties in the District, with the goal of moving them back into productive use.
That's a heavy charge: Vacant properties can be scourges for neighborhoods, attracting drugs, crime, and vermin. Ward 8 voted rehabilitating vacant properties as their top development priority at a summit last year, over megaprojects like Skyland Town Center and St. Elizabeths. Pemberton's small staff has its hands full inspecting some 3,000 properties a year, and maintains a portfolio of about 2,000, boarding them up and cutting the grass when the property owner won't do it themselves (they get a bill in the form of a lien on the property).
Overall, the program is working: 1,217 buildings went from vacant to occupied last year, and the count is on track to beat that number this year. “The vacant and blight tax gets people off their butts," Pemberton says. "I’ve never seen anything like it.”
Earlier this week, I hitched a ride with Pemberton and one of his two inspectors, David Jacobs, on their daily rounds. Jacobs, a hefty guy who teaches boxing in his spare time, tries to hit about a dozen properties per day, taking pictures and posting notices when the buildings fit the definition of vacant or blighted. As we drive, Pemberton points out decrepit hulks that they've tagged over the years, like a farmer checking in on his crops.
It was a comparatively mild day. We went by a Capitol Hill garage that was locked and filled with garbage, and a few vacant lots in Ward 7 that didn't fall under their jurisdiction, poking around a little bit to find if there was a building hidden back amongst the shrubbery that they could tax (they assured me that it's sometimes much worse—Jacobs found a pitbull chained in the bathroom of an abandoned foreclosure just last week). We even visited well-maintained house whose owner answered the door when Jacobs knocked.
The Unit operates on complaints, receiving hundreds of emails and calls a day from residents tired of looking at a falling-down building next door—some of whom might have ulterior motives for ratting on their neighbors. "People just hate on people," Pemberton says.
For all the time he spends looking at empty buildings, Pemberton deals with people a lot. Many of the problem properties are owned by families that can't figure out to do once a grandparent dies without a will, and just let it sit until the taxes start piling up.
“We suggest that you have a family meeting, get everyone together, and understand that your taxes are going to go up 20 grand this year," Pemberton says. “We sort of play the judge in family court, and the neighbors don’t care about the drama, because they just want the book thrown at whomever the owner is.”
The problem with taxation, though, is that even if the property goes to tax sale, it could take years to work through the process, sticking the neighborhood with the same problem for much longer than if the owners themselves do something with it. That's why he's willing to waive a big bill if it looks like it would get in the way of redevelopment. Like in the case of 329 Rhode Island Avenue NE, which had been a burnt-out shell with an absentee owner and racked up $150,000 in taxes. A developer agreed to buy it, but paying the bill would make renovation a lot harder, so Pemberton gave them a break—the building is now luxury condos. “We’re not wheeling and dealing here, but we’re trying to make something out of nothing," he explains.
Mostly, rather than individual owners, Pemberton is after the repeat offenders who buy up properties all over and try to hide from the tax. But it's actually pretty rare that someone actually pays the full blight tax, rather than fixes up their property or sells it. Pemberton remembers the owner of 1357 U Street NW, the old State of the Union building, whose owner just paid through the nose year after year. “He was so rich, it didn’t even matter," Pemberton says. “I wouldn’t expect anyone to pay it. It’s a little ridiculous.”
Vacant and blighted taxes work best in hot markets where properties could be valuable if redeveloped, like Capitol Hill and Shaw. They're less effective in places where the problem is worst—east-of-the-river neighborhoods where buildings have sat for years, and even if someone got them for free with no tax bill, the cost of renovation would exceed what they could get for selling or renting them out. Pemberton reels off the hopeless cases: 2907 Gainesville. 5062 High Street. Wayne and Mississippi.
“It’s when these things are upside down with taxes, and the owners walk away, it’s the taxpayer cutting the grass, and there’s no end in sight," he says.
The Department of Housing and Community Development has a program that's supposed to take those properties, either through eminent domain or friendly sales, and put them back into circulation through auctions that require buyers to rehab them within a given time frame. But the pace has been pretty slow lately; DHCD has limited funds, and often can't sell the properties for as much as it takes to buy them. Pemberton says a task force is coming together to try to look at the problem of the most intractable properties.
It struck me that Pemberton really needs czar-like powers: To not only identify properties, but also direct the DHCD program that could buy them, creating a seamless pipeline from decrepitude to rehabilitation. (Pemberton says he wouldn't object). In the mean time, he wants to improve his operations by engaging Advisory Neighborhood Commissioners to pass along all the problem properties in their districts, and also create a list of approved contractors for property owners who've never had to handle that kind of renovation.
As our last stop, we swung by H Street NE, in which Pemberton takes particular satisfaction: They taxed the wazoo out of the strip's vacant commercial buildings, getting it moving much faster than it might have otherwise. The latest triumph: 403-407 H Street, which looks worlds different than it did before the tax kicked in. “It’s at the point of harassment," Pemberton admits. "We basically got H Street.”