Mr. BATEs. The next year only. Mr. DENT. Yes, sir. Mr. BATEs. All right. Mr. Dent. I might say, Mr. Bates, that we have had very few complaints from persons who did not know that their assessments had been raised because in view of the news items in the newspapers, they come down. We have very little trouble on that score.

Mr. Bates. How many appeals do you have? You did not have any review last year, did you, to the extent of any revaluation! You are going to have it this year.

Mr. Dent. We have changes every year. We had in the last 2 or 3 years increased land values all over the city of Washington. Mr. BATEs. How many parcels would that embrace, roughly! Mr. Dent. I would say thousands.

Mr. Bates. How many appeals have been entered either before the expiration of that date or subsequent to the actual tax!

Mr. DENT. In the last 2 or 3 years, appeals have been very few on account of inflated market prices.

Mr. Bates. In other words, there is no general feeling throughout the city that property is overtaxed here!

Mr. DENT. Well, I would say that in the last few years the reason that we have had so very few appeals has been due to the fact that property has been selling at such ridiculous prices, in my opinion, that they would not have very much of a case. Prior to this rise in real estate prices, during the last few years since the war started, I would say between twelve and fifteen hundred each year.

Mr. BA’TES. Out of what total assessment in the District ?
Mr. DENT. One hundred and forty-nine thousand.

Mr. BATES. So you have had between a thousand and fifteen hundred appeals.

Mr. DENT. Yes, sir. I think one of the reasons for that is because we do not—I do not know of any assessing authority in the United States that attempts—to put on an assessment equal to the selling price of a house. For instance, if a house during normal times

Mr. Bares. I am afraid you are not fully informed on some ot lier parts of the country. Of course, I agree with you that the full sales price as of today on the inflated prices would be a basis for your statement. But going back some 6, 7, 8, 10 years ago, probably in your own District, the actual sales price probably compared pretty well with your assessed value. That is some years ago.

Mr. DENT. I do not want to disagree with you, Mr. Bates, but according to the National Association of Assessing Officers, the general policy of assessors is in the case of a house that sells for $10,000 during normal times to put that house on at around $8,500. Now, obviously, the purchaser who has paid $10,000 for a house during normal times believes that house is worth $10,000 or he would not have bought it in the first place; he is satisfied, therefore, with an $8,500 assessment.

Mr. Bates. That is right.

Mr. DENT. Furthermore, by putting it below the price, you reduce the number of appeals, otherwise, if you would put it on at the original price, you would be constantly harassed each year for reduction on account of depreciation, so, in the long run, I think the municipality does better by not putting on the top price and giving credit for depreciation each year.

Mr. Bates. The reason I made that statement, Mr. Dent, as you know, you supplied me with some information from your own files. When I made the statement that your assessment was pretty nearly 100 percent in the prewar years with the sales price of the property, I note here that your assessment in the case of business property actually exceeded the sales price of the property that you gave me.

Mr. DENT. That is true.

Mr. BATEs. Now, this schedule here. I want this part of the record, is of quite a number of cases, probably a couple of hundred cases here.

Mr. DENT. About 200, I think.

Mr. BATES. Two hundred were taken as sort of sample cases, not selected at all, but just picked at random from your files, and they are representative cases, are they not!

Mr. DENT. I can assure you, Mr. Bates, that those cases were not hand-picked. We did not pick them with any idea of benefiting the assessor's office.

Mr. Bates In other words, what I asked you to do in order to give us some idea of the background of your assessment policy here, is to pick at random a couple of hundred cases of business property, apartment houses and residential properties, given the assessed value, say, bet ween the years 38 and 940), and the sales price of those properties during that period, and then the very same properties that were sold between 38 and '40, to give the assessed value in 45 and '47 and the actual selling price in that same period, '45 and '47.

Mr. DENT. They were picked to this extent: That we started out in the low squares and went right on through and picked out property that had been sold in both of those years. So that you would have a picture as to the selling price in the 1937–38 period, and also the inflated price during the recent period.

Mr. BATEs. That is right. And then along with that, you inserted a column of the assessment that you expect to place on those properties this year.

Mr. DENT. They are already on the books; yes, sir.

Mr. BATES. And subsequently, I presume, they will be subject to that Equalization and Review Board?

Mr. DENT. Yes, sir. We are beginning to get quite a number of appeals now.

Mr. BATEs. So, what I said at the outset that property values here during the prewar period when we had really subnormal conditions, the assessment was pretty well up toward the actual full value of the selling price of the property.

Mr. DENT. Yes, sir. Of course, I do not believe that the period between '37 and 38 was really a subnormal period because we had a very high market in 25 to 27. Then we had the depression that we all remember—1929. And the market went to pieces in '32 and 33.

Mr. BATEs. That is right. Mr. Dent. It started recovering, and I think by '37 and 38 we had approached what we called a normal market again.

Mr. BATEs. So, you would say that the figures you presented here from 38 to '40 represented the normal period?

Mr. DENT. In our opinion, yes, sir.

Mr. BATEs. Now then, according to this schedule, just for the record, on the entire schedule of business properties, the sales price

99888-47-8

a

during the past 2 years was $2,234,000. The new assessment, that is the combined assessment on those properties of $2,234,000, is $1,600,000, which gives you about a 65 percent assessment basis.

Mr. DENT. That is on the present selling prices.
Mr. Bates. On present selling prices, that is right.
Mr. DENT. That is right.

Mr. BATES. I have in mind, of course, and I am thoroughly in accord with your point of view, that in these inflated times that we ought not to have inflated assessments. If we did have that it means that in the days ahead of you if we had any recession, that you would have those conditions come back to plague you a great deal.

Mr. DENT. I can give you an example of one city in this country that during the high market in 1925 to 1927 increased real estate assessments materially; they secured a considerable amount of additional revenue, and on the strength of that made large capital investments, large capital improvements. When the depression came about they had to reduce those assessments back, and they were loaded up with a tremendous bonded indebtedness, so that 51 cents out of every tax dollar was paid for interest.

Mr. BATES. We had that same situation in many parts of the country, and I recall in the '27 period when the tax commissioner of my own State, operating under compulsory laws, interpreted that the assessed value should be on the fair market value rather than having the assessors applying the 100 percent rule. If we did that we would have wrecked the economy of the communities. We did not do that. These are typical examples of assessment and sales prices, and represent pretty much the general run of your assessment and conditions here in the District; is that right, Mr. Dent?

Mr. DENT. Yes, sir. Mr. Bates. I want to put these in the record at this particular time. (The documents referred to were as follows:)

Comparison of assessed valuations with actual sales for the years 1938-40 and

1945-47, also the assessed valuation for 1998

800.
19, 20, 25, 26
818
29
59
829, 830, 844
147
138, 139,
27
33
817
41.
31
29
66
45
800
832

1940 1910 1939 1910 1938 1910 1910 1938 1910 1939 1939 1938 1939 1939 1938 1940 1940 1939

$55, 513

8. 523 13, 721 88, 453 60, 170 84, 899 10. 462 14, 720 5, 616 5, 390 6, 040 11, 984

8, 943 13,871 10, 809 10, 700 66, 420

$80.000
14, 300
16, anca)
60,000
55, doo
52, 000
16, sua
12.000
5, 650
5, 000
5, 978
11, 500

8,000
14,000
18, 101

1916 1916 1945 1916 1916 1945 1916 1946 1915 1915 1916 1916 1915 1916 1945 1945 1946 1946

$61, 125
11, 613
13, 721
72, 453
60, 170
79, 899
10, 462
19, 720
5, 616
5, 390
7, 025
10, 452

8, 913
13. 871
10, 809
10, 700
56, 420
11, 451

$85, 000

25,000 26, 500 108,000 110,000 66.000 14. 250 34, 000

8, 950 10,000 12, 000 42, 000 27, 500 17. 500 16, 500 13,000 73.000 22, 500

$69, 350 13, 550 15, 524 75. 453 71, 170 69. 972 12, 285 23.956

5. 616 10.836

7. 425 13, 978 13, 026 16, 764 12, 648 12, 600 65, 800 13, 257

96

97

omparison of assessed valuations with actual sales for the years 1938–40 and 1945–47, also the assessed valuation for 1948—Continued

APARTMENT HOUSES (8)

$5, 841
3, 231
2, 449
3, 146
3, 422
4, 162
7, 720
6,053
4,116
5, 267
2,712
5, 716
1,939
3, 498
2, 231
2, 115
4, 100
2, 708
2, 412
2, 702
3,074
10, 208
7, 904
7,168
3, 073
5, 431
4,493
4,829
4,722
3, 565
14,068

7,381
10, 767
17, 461
6, 493
3,665
15, 733
11, 561
7, 455
9,676
11, 018

9,070 10, 117

9. 636 16, 103

8, 847
10, 555
10, 822

8, 409
11, 793
11, 147
12, 400
15, 338
14, 304
10, 075
14, 358
6, 821
5, 651
7.614
9, 379
8,874
5, 993
8, 570
12, 253
15, 518
10, 109
46, 704
33, 500

7, 260
10, 584
11,736
9, 649
9, 729
5, 541
27, 420
11, 906
18,385

$6,500
7,000
4,000
8,500
4, 250
9,000
15, 500
10, 500
10,000
13,000
9,000
9, 500
8,500
8,000
4,500
4, 500
7,000
4,750
6, 650
8.000
5,750
12, 800
19,000
15, 000

7, 500
12, 500
13.000
10.000
8,000
4, 500
30,000
15, 250
25, 000
29,000
19,000

6, 250
28, 500
32, 500
19,000
19,000
22, 500
24,000
18, 750
19,500
32,000
16,000
* 25,000
18,000
16, 500
21, 500
25,000
18,500
28,000
24, 500
19, 500
27,500
12, 600

9,000
13, 750
28, 500
16, 500
12,000
12, 250
21,000
25, 500
19, 000
65,000
20,000
14,000
19, 450
15, 000
11, 500
26, 000
16,000
44,000
21, 500
19,500