Lifting the more than 100 year-old federal law restricting the height of buildings in the District of Columbia would eventually expand the city’s “very limited tax base,” city chief financial officer Natwar Gandhi told a House subcommittee Thursday.

The Congressional Heights of Buildings Act of 1910 limits the district’s structures, basing them on a formula involving the width of the streets on which they sit. Thursday’s hearing of the House Committee on Oversight and Government Reform subcommittee on health care, the District of Columbia, the Census, and the National Archives explored the possibility of amending it.

Because the district cannot tax the incomes of nonresidents, and there is so much federal tax-exempt property, the city has often backed bonds with residents’ income taxes. Gandhi said the limited taxing power of his city is one of its biggest financial challenges.

“By allowing the district to support more residential units and office space, this change would afford more flexibility to the district in accommodating growing jobs and population,” Gandhi testified. “To be clear, changes in height and density restrictions could increase the value of the real property tax base, which accounts for over $1.8 billion in annual tax revenues.”

It wouldn’t be an instant fix.

“The realization of higher taxes from increased density will take time,” he said, “especially given the slow recovery from the Great Recession and the underlying economic uncertainty.”           

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.