This is a cautionary tale for "absentee" landlords and property owners who own properties in neighborhoods that are not yet historic districts. My day job and my neighborhood activism gives me knowledge, experience and information that I can't go into in this post for "reasons", but if you want, trust me.
Historic Districts and Historic Landmarks are a thing in the District of Columbia, and depending on the neighborhood, they can derail flipping or development plans, as is the case with one property a little too close to my residence. When the property, built around 1902, was bought by a development firm, it was not in an historic district. Because the developer wanted to convert the large corner townhome into 2 or 3 units, add a 3rd story, and it sat on over 60% of its F.A.R. the developer needed a zoning variance. To get a variance, the developer needed buy in from the ANC (like a minor alderman) and the neighborhood association.
The developer chose to do something that set off a chain reaction and the reason for this post.
The development firm presented a few options (all bad in my opinion) to the ANC and neighborhood assoc. One was removing the notable turret, which upset myself and another neighborhood activist, and adding a 3rd story. Another was a threat to demolish the structure, as a matter of right, which did not require neighborhood buy in. And that set in motion several actions that I and the other activist did not see going in the direction it wound up going in.
The ANC for that property tried to organize the residents in the area to have meetings with the developer. Those meetings hardly had any neighbors attending, and the development firm put forth another option of a turret on top of the new 3rd floor. I thought it was still ugly, but the ANC and whomever bothered attending the meetings agreed to it, so the neighborhood association voted to approve it. And that, I thought was the end of that.
I should mention, I and the other activist, let some historically minded people know what was going on, via email and that was it. Those interested parties, decided to take action, by applying for historic landmark status for the whole block, not just the property to be developed. I'll also mention, I was involved with changing another development on the same block many years ago, where the developer wanted to add a 3rd story. There was back and forth and a winning solution was found for everyone and the only government involvement was BZA. I was hoping for the same in this case, but no.
I'm not a fan of historic districts and historic landmarks are similar. You can fight historic districting; landmarking, not so much. Someone does not need the buy in or permission of the property owner to file a historic landmark application. The criteria for a successful HL application seems low. While the HL application is being considered, a property owner cannot demolish or essentially do anything to alter the structure.
But what does this have to do with landlords? Well because the whole block was pulled into the application, including properties built in the 21st century, those properties have to follow similar rules as properties in historic districts. In the HL process, property owners are given a 45 day notice that this was happening. This is where being an LLC or hiding your identity may bite you in the rear, because the city used the addresses on file to contact property owners. Some people did not find out until too late that this was happening. And I guess that's why a few other developments on the block quickly finished up some things (that technically were now illegal).
What happened gives me no pleasure. I want to see my neighborhood developed and vacant houses brought back to life. The delay with the HL application has made the project more expensive.
What can anyone learn from this? One, if you are in DC, know what you can do as a 'matter of right' short of demo. Two, if you are hard to reach/find you might not learn until it is too late that some government action is happening (ex. eminent domain, change in zoning). Three, if a property is over 50 years old, and something slightly interesting happened 50+ years ago it is at risk of getting landmarked.
Very interesting. Thanks for posting.
I knew a lady who specifically got old buildings marked historic, then would move them to her property and use them for rentals. (Or maybe she moved them 1st, I'm not sure.) Supposedly she got some real tax breaks or something. Interesting tactic.
I would add 4, don’t invest money and time in an area where activist with there own agendas and no money involved can screw things up.
Makes me glad I moved out of an unfriendly capitalist state like Oregon and moved back south.
@Jody Schnurrenberger , there are federal and local tax breaks and grants available, but I don't know enough about it to really bother with it. As I mentioned there are developers who do know how to work the grants and the tax breaks, just as there are developers who know how to work the low-income tax credits when building multi-family properties. They get super bonus points when they mix the historic, low-income and other credits all in one project. There are player who know how to play the game.
@Pat Alford , this is DC, and there was a reason why I put this in the Washington DC Real Estate section, because the District, and surrounding area is chock full of activists. Some activists are good at getting their goals met, and a slew of others are just good at virtue signalling and 'awareness'.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.