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PR26-0102 • 2025

Residential Building Permit Classification Emergency Declaration Resolution of 2025

Residential Building Permit Classification Emergency Declaration Resolution of 2025

Taxes
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Mendelson
Last action
2025-03-14
Official status
Approved
Effective date
Not listed

Plain English Breakdown

The official source material does not provide details on the exact penalties for failing to use real estate as intended, nor does it specify a timeframe for completing projects after getting a permit.

Emergency Resolution for Residential Building Permits

This emergency resolution allows developers to change the tax classification of commercial properties to residential before construction is fully complete, making it easier to convert old buildings into homes.

What This Bill Does

  • Changes rules so that developers can get a property reclassified from commercial to residential after getting a building permit, not just when construction is finished.
  • Creates an application process for developers to change the tax classification of their properties.
  • Gives developers the right to appeal if their application to change the property classification is denied.

Who It Names or Affects

  • Developers who want to convert commercial buildings into residential ones.
  • The Office of Tax and Revenue, which handles tax classifications for properties in the District of Columbia.

Terms To Know

Tax Classification
A system used by governments to categorize property types (like commercial or residential) and set different tax rates based on these categories.
Building Permit
An official document that allows someone to start construction work on a building.

Limits and Unknowns

  • The resolution does not specify the exact penalties for failing to use real estate as intended.
  • It is unclear how long developers have to complete their projects after getting a permit.
  • This emergency declaration only applies in specific circumstances and may be temporary.

Bill History

  1. 2025-03-14 Council of the District of Columbia LIMS

    Resolution R26-0054, Effective from Mar 04, 2025 Published in DC Register Vol 72 and Page 002689

  2. 2025-03-04 Council of the District of Columbia LIMS

    Retained by the Council

  3. 2025-03-04 Council of the District of Columbia LIMS

    Legislative Meeting

  4. 2025-03-04 Council of the District of Columbia LIMS

    Approved with Resolution Number R26-0054

  5. 2025-03-03 Council of the District of Columbia LIMS

    PR26-0102 Introduced by Chairman Mendelson at Office of the Secretary

Official Summary Text

Residential Building Permit Classification Emergency Declaration Resolution of 2025

Current Bill Text

Read the full stored bill text 
ENROLLED ORIGINAL

1

A RESOLUTION

26-54

IN THE COUNCIL OF THE DISTRICT OF COLUMBIA

March 4, 2025

To declare the existence of an emergency with respect to the need to amend section 47-813 of the
District of Columbia Official Code to provide for more timely classification changes for
commercial properties that are to be put to residential use, to provide for an application
process to make classification changes, to provide for appeal rights if such application is
denied, and to provide for a claw back in the event the real property is not timely put to
residential use.

RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
resolution may be cited as the “Residential Building Permit Classification Emergency
Declaration Resolution of 2025”.

Sec. 2. (a) On October 1, 2024, the Office of Tax and Revenue enacted a final policy
titled “OTR Tax Classification Change (Class 2 to 1) Policy.” Under the new policy, a developer
converting a commercial property to a residential property could not benefit from a change in
classification from Class 2 to Class 1 until construction is “100% complete” and the building is
“in actual use”. Prior to this updated policy, a developer could get a property under construction
reclassified via the issuance of a building permit or by qualifying for a planned unit
development.
(b) The updated policy could negatively impact new residential developments,
particularly commercial-to-residential conversion projects that can take years to complete, as
Class 2 property tax rates ($1.65-$1.89 per $100 of assessed value) are roughly double the tax
rate for a Class 1A property ($0.85 per $100 of assessed value). Additionally, the updated policy
contradicts the goals of the Housing in Downtown Program, which seeks to revitalize downtown
by incentivizing the conversion of vacant or underutilized office buildings into residential
properties.
(c) Emergency action is needed to clarify that developers may have commercial-to-
residential conversion projects reclassified after a building permit has been issued to construct a
new improvement for predominantly (or substantially rehabilitate that portion or all of an
existing improvement for exclusive) nontransient residential dwelling purposes.

ENROLLED ORIGINAL

2

Sec. 3. The Council of the District of Columbia determines that the circumstances
enumerated in section 2 constitute emergency circumstances making it necessary that the
Residential Building Permit Classification Emergency Amendment Act of 2025 be adopted after
a single reading.

Sec. 4. This resolution shall take effect immediately.