Developers, industry groups urge change to transfer-and-recordation appeals to speed deals

At the Committee on Human Services hearing, industry advocates pushed the Council to amend how transfer and recordation taxes treat distressed, arm’s‑length sales. Liz De Barros, chief executive of the DC Building Industry Association, said the current rule — which can use an outdated assessed value rather than a recent sales price when a sale is more than 30% below assessment — penalizes responsible developers and discourages projects that could deliver housing. "The legislation helps to address that on the front end rather than the appeals," De Barros said, arguing the bill would improve certainty for lenders and investors.

Rebecca Ballard of Rooted Communities said her organization withdrew from a fully capitalized acquisition after the tax calculation changed the transaction math. "When taxes are based on inflated valuations instead of an actual sale price, projects that could deliver a real community benefit just don't pencil," Ballard said. Both witnesses urged the Council to refine b26396 to treat true arm’s‑length sales as fair market value and to address related‑party transfers that currently trigger full transfer taxes. The chair indicated the bill is pending consideration in the Committee of the Whole; De Barros said the legislation is in Chairman Mendelson’s committee and under active discussion.

Why it matters: Transfer and recordation taxes can materially alter deal economics for large commercial and mixed‑use developments. Witnesses said clearer rules and front‑end standards would reduce litigation, restore predictability for investors and help projects reach financial close.