The District’s east side has long been isolated, both geographically and economically, from the rest of the city, but some fear that development in the area will not result in improved quality of life for the city’s resident most in need of assistance and force them to leave the city altogether.
The city’s two wards east of the Anacostia River currently have the highest levels of unemployment and poverty in the city, and the D.C. Council is looking to encourage development in the area that has long been cut off from the District’s economic growth.
In its most recent conversation about how to include Wards 7 and 8 in the District’s overall growing prosperity, the council moved to create tax reductions and exemptions for businesses in the area.
“We need these kinds of incentives,” said Council member Jack Evans, who chairs the council’s Finance and Revenue committee, at the committee’s meeting Monday.
The committee discussed legislation that would lower the real property tax rate for qualifying commercial properties east of the Anacostia River, which is currently $1.65 per $100 of assessed value of property, and make it equal to the property tax rate of residential properties,which is currently 85 cents for the next 10 years.
The committee also discussed waiving deed recordation and real property, personal property, corporate franchising and sales tax for eligible sites in Wards 7 and 8 for a grocery store.
“I think the need for this bill is pretty straightforward,” said Ward 7 Council member Vincent Gray, who introduced the bill.
The current commercial rate, he said, is “a huge impediment to business development on the east end of the District of Columbia.”
Supporters of the legislation cite job creation and increased tax revenue as positive outcomes of tax reductions to stimulate the east end economy.
But some are skeptical about what development means for the city’s poorest and largely black wards.
Earlier this month, concerned residents met in Anacostia with community leaders including Ward 8 Council member Trayon White, former Council candidate Aaron Holmes and renowned civil rights leader Jesse Jackson Sr. to discuss how black residents could avoid displacement amid the prospect of development in the area.
William Cunningham, an economist and public witness at the finance committee’s last meeting, said the tax incentives were a “giveaway.”
“You’re thinking apparently is that real estate development is a job creation strategy when clearly that is not the case,” Cunningham told the committee. “Basically, what you’re doing is setting up a mechanism for gentrification.”
He recalled when Wal-Mart abandoned its promise to build stores in the city’s poorest neighborhoods after the city allocated $90 million for the projects and how the development of 14th Street seemingly displaced existing black residents when similar incentives were offered in that area and when non-minority-owned developers began working to redevelop the St. Elizabeths campus after the mayor offered $1 leases.
“Clearly, the council has never met a white developer that it wasn’t willing to go out of its way for even though the track record shows that this means damaging the economic prospects of black residents,” Cunningham said. “The record clearly shows who this legislations benefits.”
Evans and Gray denied mass displacement and touted the 14th Street development as a model for success in the region.
“I intend to move forward with this,” Evans said.