Bill > PR26-0102

This resolution declares an emergency to address a new policy by the Office of Tax and Revenue (OTR) that negatively impacts commercial-to-residential property conversion projects in the District of Columbia. The policy, enacted on October 1, 2024, prevents developers from reclassifying properties from Class 2 (commercial) to Class 1A (residential) until construction is 100% complete and the building is in actual use, which can significantly increase tax burdens during long conversion projects. Previously, developers could reclassify properties upon obtaining a building permit or qualifying for a planned unit development. The current policy effectively doubles the property tax rate (from $0.85 to $1.65-$1.89 per $100 of assessed value) and contradicts the goals of the Housing in Downtown Program, which aims to revitalize downtown by encouraging the conversion of vacant or underutilized office buildings into residential properties. The resolution calls for emergency action to clarify that developers may reclassify properties after obtaining a building permit for constructing new improvements or substantially rehabilitating existing structures for predominantly residential purposes, and it determines that these circumstances warrant adopting the Residential Building Permit Classification Emergency Amendment Act of 2025 after a single reading.

https://lims.dccouncil.gov/Legislation/PR26-0102