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Cool_Story_Bra t1_j0h2x4a wrote

Reply to comment by jindc in DC's old Vanguard building to be converted into downtown apartments by Maxcactus

For the same reason I would rather own than rent, a developer would rather me rent than own. And guess which one has the capital to do a massive new construction or renovation project in DC?

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jindc t1_j0hdas3 wrote

That is where tax coding and zoning play a part.

And the people responsible for zoning and tax code are bought and paid for.

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Cool_Story_Bra t1_j0hfeth wrote

Zoning doesn’t really differentiate between condos and rentals for the purposes large projects like this, both are about equally feasible.

Would be interested in how you think the tax code should be changed on this matter. I see a few options and none of them are very appealing.

Raise tax on rental property owners? Because that just gets passed on down to renters. Lower taxes on personal home owners? Congrats you just cut city revenue by giving a tax break to the wealthiest segments of the population.

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jindc t1_j0hjdfa wrote

Zoning could, no? In as much as an area can be zoned for single family homes, a multi family units, zoning could slice and dice the type of units. So the zoning argument is arbitrary.

A resident of a condo can not deduct the condo fee from their taxes. A landlord can. Reverse it, and favor ownership over rental.

DC used to charge a substantial fee to convert a rental apartment building into condos. Eliminate it.

DC does not provide a homestead exemption for resident condominium parking places. Provide it.

Provide tax preferred savings plan to save for a down payment.

Go to back to a first time home buyer tax credit.

Do you need more? Or are you fixated on raising taxed on rental property (which removing the deduction on condo fees would do)?

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Cool_Story_Bra t1_j0hkcge wrote

Those could all make condos more affordable, sure. I fail to see how any of that would encourage anyone to build more condos. That’s the factor that’s missing here. Those efforts don’t do anyone any good if there aren’t more condos to buy.

And I guess you could making zoning specific to condos vs apartments, but I don’t think adding more restrictions to zoning is a way to spur continued development of new housing, which is the key to lowering prices for all types.

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jindc t1_j0hmid1 wrote

That is a demand function, is it not?

If condos are more affordable to residents, then people will want them.

For that matter, if DC implemented any or all of those mechanisms for commercial properties on K Street - including expanding zoning for multi-family, but restricting it to condo or coop residential property, don't think developers would fill the space and make a profit?

Without a grand economic study, I think it would be enough.

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Cool_Story_Bra t1_j0ho3um wrote

It’s not really a demand function, as there is already massive demand in DC for everything. Given a scarcity of housing, where you can fill up anything you build, it’s driven by margins for profit optimization. Profit for developers here means maximizing the price of condos or rents. Making condos more affordable via tax incentives and whatnot doesn’t actually change anything for the developers unless it means they can raise prices to increase profit. So now you’re cutting tax revenue to boost developer profits by roughly the same amount, and cost of condo units has gone up.

And you certainly could require condo or coops to be built, but I’m not convinced that’s what people want. There might be data saying it is, but Im not seeing it. Certainly not enough for the city zoning boards to pick and choose where they implement those requirements.

Best solution is to build build build as much as possible. Supply goes up and meets demand, prices come down (or at least level off) and condo vs apartment economics can reach a more natural equilibrium.

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jindc t1_j0hjk0a wrote

I just recall that when I bought in 97 DC gave me a 5 year abatement on real estate taxes. Another mechanism to help with home ownership.

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