Housing Complex

Lost and Foundering

The red rowhouse at 430 Manor Place NW has seen better days, but not many people remember them. Four of the five windows are boarded up, while the last is filled with stacks of cinderblocks. Ivy climbs up the walls and supports, a small mulberry tree grows out of a widening crack in the walkway, and the awning and roof appear to be a heavy storm away from collapse. According to Kent Boese, the Advisory Neighborhood Commissioner for this section of Park View, the house has looked like this since he moved to the neighborhood six years ago, and no neighbors he’s talked to can recall exactly when it was last inhabited.

D.C. has a system that’s supposed to prevent vacant and blighted properties from staying this way. If the Department of Consumer and Regulatory Affairs finds a property to be vacant, the agency slaps it with a 5-percent property tax; if it’s vacant and blighted, it becomes a 10 percent tax, a steep increase from the standard .85 percent rate for residential property. Generally, that charge is enough incentive for the property owner to fix up the building or sell it.

But what happens if the city can’t find the owner? When I visit 430 Manor Place, there’s a stapled packet of D.C. Superior Court documents taped to the front doorstep—Boese says these packets appear there periodically—detailing a lawsuit against the house’s owner, listed as “Estate of Irby L. Dickinson (a/k/a Irby Dickenson a/k/a Irby Dickson)” and “Unknown Heirs of Irby Dickinson,” both with an address in Birmingham, Ala. City property records show that “Irby Dickenson” bought the Manor Place property in 1945, though there’s also mention of an “Alma Dickinson” in 1968 and an “Irby Dickerson” in 1999, when the city put a lien on the house.

Multiple online databases contain records of an Irby L. Dickinson who died in 1988 in Birmingham at age 84. I was unable to locate any surviving members of the Dickinson clan, but Boese heard second-hand that the owner’s next of kin, a niece and a nephew, have no interest in Irby’s old D.C. home. Why should they, when the back taxes, liens, and penalties on the property amount to more than it’s worth?

DCRA’s registry of vacant and blighted properties shows 698 buildings whose owner can’t be found because the owner is dead without an heir, has vanished, or is otherwise unresponsive. Let’s call them orphaned properties.

“When something’s blighted, the system’s set up to apply financial pressure,” Boese says. “But sometimes there’s no one to apply pressure to.”

When a property is reported vacant or blighted to DCRA—sometimes when the U.S. Postal Service starts bouncing back mail it can’t deliver to the address—an inspector will visit the property and conduct a visual inspection, which consists of checking the utility meters, knocking on the door, and looking for piles of mail or signs of disrepair. If the inspector believes the house is vacant, DCRA sends a notice to the owner, who can do one of several things: deny that it’s vacant, in which case a hearing is set to determine its status; promise to fix it up; accept the vacant status and pay the tax; or not respond at all.

It’s the latter case that’s trickiest for DCRA. When the department thinks it may be dealing with an orphaned property, it attempts to track down the owner, sometimes by conducting a search using LexisNexis. If no owner turns up, DCRA notifies the Office of Tax and Revenue that the address needs to be taxed at the vacant or blighted rate. In order to reduce the blight, DCRA periodically sends over its abatement team, known inside the department as the A-team, whose job it is to mow the lawn and make sure the windows are securely boarded up. The city puts a lien on the property for the cost of the labor, plus a penalty. But if the owner never turns up, the charges keep accumulating without anyone to pay them.

“It’s a crapshoot, because one of the things we find is that the owner is dead and has been dead for a while, but likely died without a will, and the property has never gone through probate,” says DCRA spokesman Helder Gil. (Reuben Pemberton, the outgoing head of the agency’s Vacant Building Enforcement division, provided background information for this story but referred on-the-record inquiries to Gil.) “So there is technically no owner because the property has never gone through probate to determine who the heirs of the dead owner are. And property gets screwy because of that.”

In the case of 430 Manor Place, it may be screwy beyond redemption. The tax owed on the property, including penalties, is $358,274.28. The property’s value was assessed this year at $243,480.

According to David Umansky, spokesman for the Office of the Chief Financial Officer, the “principal collection mechanism authorized by District law” for longtime vacant and blighted properties is a tax sale, but in the case of orphaned properties that have racked up hefty bills, there’s little incentive for anyone to buy them at such an auction. So the city can turn to a “junk sale,” where a buyer can pick up the property without the tax bill. But the Office of Tax and Revenue hasn’t conducted a junk sale since March 2011, and Umansky says there are no plans for any upcoming ones. Umansky’s colleague Natalie Wilson says junk sales “do not occur routinely, so as to encourage full-price participation at the annual tax sale.”

The Department of Housing and Community Development can step in and acquire vacant properties through its Property Acquisition and Disposition Division. But PADD hasn’t acquired any properties this year. Instead, it’s paused to focus on making the most of its current inventory of 151 properties—only 28 of which are buildings, while the rest are empty lots—for community development, according to DHCD spokesman Marcus Williams.

The tax surcharges slapped on vacant and blighted properties clearly aren’t doing enough to return them to productive use, nor are they generating much money for the city: According to Umansky, of the $10.3 million levied on blighted properties in fiscal year 2012, only $3 million was actually paid.

But if tax sales aren’t effective when properties come attached with more in taxes than they’re worth, and if junk sales and PADD acquisitions are rare, what can D.C. do to clear its backlog of orphaned properties? Clearly, it needs a more centralized, coordinated process. DCRA took over the identification of vacant and blighted properties from OTR in 2007, and while DCRA officials say there are certainly more vacant and blighted properties than are on their list, they also maintain they’ve held up their end of the deal. But once OTR gets its list of these properties from DCRA, it doesn’t have the tools needed to turn them back into real, active homes.

The solution could be to bring the identification, acquisition, and disposal of vacant and blighted properties under a single agency with broader powers (and better funding for purchasing properties) than any of the relevant offices currently have. It could be a new budget initiative devoted exclusively to this purpose, or a law making it easier to tackle the legal hurdles to acquiring orphaned properties, or some combination.

But one way or another, there needs to be an effort that goes beyond the piecemeal approach we have now. Orphaned properties deny the city the housing stock and property taxes it’d otherwise have; they skew the city’s finances, since their outstanding debt is listed as expected revenue in the city’s budget, even if there’s little chance of collecting it; and they drag down their neighbors. The two houses immediately adjacent to 430 Manor Place are assessed at a lower value by the city than any of the next few houses in either direction.

“It certainly doesn’t help,” Boese says of the Manor Place house’s effect on neighboring properties. “Clearly this is the pig’s ear on the block right now, and it doesn’t need to be.”

Photo by Darrow Montgomery

  • DC Guy

    Isn't the idea that Pemberton is outgoing, news in and of itself?

  • JM

    Good article... hopefully someone will pay attention

  • SW Resident

    I've been trying and trying to buy this particular blighted property in Anacostia but NO ONE seems to know WTF to do or Who TF I can get in contact with, so instead the house just sits and rots! And I want to actually LIVE in the house and fix it up!

  • MLD

    The vacant/blighted taxes are supposed to encourage owners to fix up properties. In the case where there is no owner, there is nobody to collect from, so the idea that the property has somehow accumulated more in tax owed than the property is worth is ridiculous. The city should just get on it and auction this trash heap off to the highest bidder and recoup whatever they can at auction.

  • danmac

    @MLD amen to that. A Junk sale that moves these properties is in order even if it reduces participation in the tax sales. Getting these properties back into productive use will increase the tax income and help the neighborhoods and should be the priority.

  • Actually

    It would be nice to get some followup from the always-competent Office of Tax & Revenue as to why they haven't held any junk sales for more than 2 years and have no plans to hold any in the near future.

  • name

    This isn't what really happens anyway.

    These properties sit like this until Douglas Jemal thinks he wants them. Then magically he owns them without any sort of public auction whatsoever.

  • sp

    so great -- thanks for investigating this, Aaron! It's crazy that we have so many houses sitting vacant when the housing market is so competitive. i can see three such vacant houses from my window in the eastern part of Shaw, where neighboring houses for sale are scooped up within days.

  • Really?

    DHCD could have used money from the neighborhood Stabilization Program (a stimulus program) to fix this problem.

  • sbc

    sw resident, if you look at PIVS on the DCRA website or the OTR real property database you can see who the owner is. If it's a company you may have to look at the corporate registration part of DCRA's website (or the equivalent in another state) to see who the registered agent is. DCRA is located in SW right by the waterfront metro and I bet they could help you with this. The next step would be tracking down the owner (which could be a bank or something) to see if they'll sell, or nagging OTR tax it at the vacant/blighted rate and schedule a tax sale for it. But you should know what you buy at the tax sale isn't the property itself but the right to pay of the liens on the property and foreclose on it if the owner doesn't pay back what's owed, and to collect interest on the liens if the owner does come back.

    It's going to be a loooooooong process is what I'm saying. And maybe not any cheaper than just buying a place in Anacostia that's actually for sale. But good luck--I hope you can buy it, fix it up, and love living there!

  • Titanium

    Pemberton outgoing? wth? That sucks because he was awesome. what now?

  • Manor Place

    I live on this street, which is an otherwise idyllic one-block street in Park View. It is a major bummer for the street to have this one vacant property, and there's no question it hurts the value of all of our homes.

    It does seem to be a flawed process to continue to tax an essentially ownerless home, rendering it unbuyable. I've talked to brokers who've looked at it, but no one seems to be able to get over the hump of that big tax bill.

    And it's a shame. This house and all the houses on the south side of the street have giant backyards -- among the biggest you'll find in the city. Whoever buys it can do something amazing with it. If they can ever buy it.

  • Alan

    What a broken system. I see no reason why the new owner should have to pay the tax bill. Just take the full sales price in lieu, given what houses are going for these days that should cover it. If not, there should be a legal mechanism for the District to continue to pursue the owner for the balance while the property is being redeveloped by the new owner. The point anyway is not for the District to maximize revenue here, its to return properties to viable use!

  • SW Resident

    @sbc - I've done all those things countless times! I've even got in touch with DHCD. I actually live on 4th St, ONE block from DCRA so I am there all the time. From a quick google search it appears that the owner of the property died in 2005 and doesn't have a will. The city hasn't done ANYTHING since then. I've sent countless letters to the address listed on OTR's website for the owner (even though she is dead!!) and still nothing! I'm so curious why the bank hasn't foreclosed on the property and listed it for sale.

    But out of curiosity, why do you say it will be as expensive?

  • Off the DC Reservation

    Pause to note historic preservation regulations' role in this stuff.

    In cases of old houses in less than desirable neighborhoods home owners either have to absorb economic losses to update old houses or walk away and let them rot. Sure, there are a handful of gentrifiers that are happy to do that but for the average guy making $40,000 / year hiring architects and paying an architect to meet the exquisitely precise preferences of the HPO staff and HPRB is simply impossible.

    You want fewer nuisance properties? Make major modifications to historic preservation law.

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  • independence

    The houses on Manor Place are not in a historic district.

  • textdoc

    What independence said. And the neighborhoods covered by historic districts are desirable ones; the "less than desirable" neighborhoods might have historic architecture, but don't have historic-district status and the protections that it affords.

    There might be the occasional dilapidated property in a historic district, but they're very rare.

    Mr. Wiener, thanks for bringing attention to this issue. Maybe the publicity will encourage the D.C. government to undo this Catch-22.

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