Soul of the City district could tax covered properties with mayoral approval

If the mayor approves the district, nonexempt Class 2 property except hotels would face a value-based tax, while nonexempt hotels and motels would face a room tax. The taxes cover nonexempt properties inside the mayor-approved boundary, which must include the listed lots. If a taxable building sits on tax-exempt land under a ground lease, the lessee or land user would owe tax based on the building's value and their interest in or use of the land. The act names the half tax year beginning April 1, 2026, as the tax period's start. The tax ends when the act expires or the district ends, whichever comes first.

If the mayor approves the district, it would charge $120 yearly for each covered rental unit. The rate covers Class 1A property with at least five units available for long-term rent that were placed in service after July 17, 1985. Other Class 1A property and all Class 1B property are exempt. A unit restricted by income under a federal or District affordable housing program is exempt when the district identifies and certifies household income at or below area median income. The tax period is tied to the half tax year beginning April 1, 2026, and ends when the act expires or the district ends, whichever comes first.

If the mayor approves the district, it would exempt qualifying taxable property from the following year's district tax. The exemption covers taxable property in the district whose owner makes the qualifying safety expenditures. The owner must show spending of more than $250,000 on safety work that improves public space next to the property or adds retail security for that property. The owner must provide satisfactory proof, and the district must certify the spending. Spending during one tax year can qualify the property for an exemption in the following tax year.

The listed district tax rates could rise by 3% each year. The increase applies to the listed Class 2 property rate, hotel and motel room rate, and covered rental-unit rate. The mayor must approve the district, and each increase must meet an additional requirement in district law. Each allowed increase is measured against the current tax year's rates.