PHILADELPHIA — Cities that have worked for years to attract young professionals who might have once moved to the suburbs are now experimenting with ways to protect a group long deemed expendable — working- and lower-middle class homeowners threatened by gentrification.
The initiatives, planned or underway in Boston, Philadelphia, Washington, Pittsburgh and other cities, are centered on reducing or freezing property taxes for such homeowners in an effort to promote neighborhood stability, preserve character and provide a dividend of sorts to those who have stayed through years of high crime, population loss and declining property values, officials say.
Newcomers, whose vitality is critical to cities, are hardly being turned away. But officials say a balance is needed, given the attention and government funding being spent to draw young professionals — from tax breaks for luxury condominium buildings to new bike lanes, dog parks and athletic fields.
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In the prime brownstone territory of Fort Greene, Brooklyn, longtime homeowners have received offers that top $1 million.Spike Lee Exchange Highlights Gentrification DebateFEB. 26, 2014 “We feel the people who toughed it out should be rewarded,” said Darrell L. Clarke, president of the Philadelphia City Council, which last year approved legislation to limit property tax increases for longtime residents. “And we feel it is incumbent upon us to protect them.”
Cities like Philadelphia are now experimenting with ways to protect a group long deemed expendable — working- and lower-middle class homeowners threatened by gentrification. Credit Jessica Kourkounis for The New York Times In doing so, cities are turning urban redevelopment policy on its head and shunning millions in property tax revenue that could be used to restore municipal services that were trimmed during the recession because of budget cuts, including rehiring police officers.
A decision to reduce property taxes can be risky because such levies account for at least 50 percent of operating budgets in most American cities and sometimes provide as much as 80 percent of a city’s revenue.
But even Detroit, where a declining tax base has been at the core of the bankrupt city’s troubles, recently announced plans to cut property tax rates.
Last month, Mike Duggan, Detroit’s new mayor, said property taxes would be cut by up to 20 percent to levels that more accurately represent the value of homes in the city. The reduction could cost Detroit as much as $15 million annually in revenue.
The tax adjustments are part of a broader strategy by cities to aid homeowners — who continue to struggle financially since the home mortgage crisis. In Richmond, Calif., lawmakers are attempting to use eminent domain to seize underwater mortgages to try to help homeowners keep their houses.
Housing experts say the arrival of newcomers to formerly working-class areas — from the Mission District in San Francisco to the Shaw neighborhood in Washington — is distinct from previous influxes over the past 30 years because new residents are now far more likely to choose to move into new condominiums or lofts instead of into existing housing, making the changes more disruptive.
“This latest wave of gentrification has happened very quickly, and cities are cognizant to keep from turning over entirely,” said Lisa Sturtevant, executive director of the Center for Housing Policy, a nonprofit research group. “And cities where property values are up and budgets are generally more stable have the wherewithal to provide tax breaks.”
Continue reading the main storyContinue reading the main story Ms. Sturtevant said that given that many of the younger, newer arrivals do not necessarily plan to stay for long, cities are making a sensible economic choice.
“There’s less personal investment and less incentive to stay, so cities are saying, ‘Let’s invest in the stayers,’ ” she said.
In Boston, which an analysis by the Federal Reserve Bank of Cleveland last year found had the highest gentrifying pressure in the nation — followed by Seattle, New York, San Francisco, Washington and Atlanta — concluded that about one-fourth the city’s population lived in gentrifying neighborhoods.
Rene Goodwin, seen here, saw the value of her home rise to $281,000 from $90,000 in a single year. Credit Jessica Kourkounis for The New York Times “Property values are increasing exponentially, and longtime homeowners are victims of the success story,” said Stephen J. Murphy, a city councilor in Boston who co-introduced legislation allowing residents who have owned homes for more than 10 years and whose property taxes have increased by 10 percent or more to defer property tax payments until they sell their home. The bill, approved by the City Council, is pending the approval of the state legislature.
But Philadelphia, undergoing a resurgence during which the city has had its first population increase since the 1950s, appears to have enacted the most comprehensive measures to safeguard longtime homeowners.
The first, the Homestead Exemption, allows most homeowners to reduce the assessed value of their house by $30,000 for tax purposes, while a second law, called Gentrification Protection or LOOP, short for Longtime Owner Occupants Program, is more narrowly focused on protecting homeowners from increases to their property tax bills because of gentrification.
Continue reading the main story RECENT COMMENTS
jr 4 March 2014 Neighborhood old-timers do not automatically deserve credit for having maintained depressed communities before gentrification booms hit. For... Elsie 4 March 2014 Considering the fact that American children have never scored lower educationally, I think it's clear that "all of that money" rich... Paolo Gonzales 4 March 2014 Any argument pitting the interests of wealthy newcomers against long-time working class residents is a false dichotomy - income diversity... SEE ALL COMMENTS The program generally allows homeowners who have lived in homes for 10 years or more and whose household income is less than about $110,000 annually to cap and freeze their assessments for 10 years if the assessments increased by 300 percent or more as part of the city’s new property tax formula.
“Philadelphia is a city of neighborhoods, and the reason people want to move to our neighborhoods is because of the character they have,” said Mark Squilla, a council member who said it had been common in his district for home assessments to surge by as much as 10 times in a single year. “Gentrification is a great thing. But we have to keep a handle on it.”
Rene Goodwin, who lives in the same South Philadelphia neighborhood her grandparents lived in during the 1920s, has seen the value of her home rise to $281,000 from $90,000 in a single year.
“To keep an urban area vital, there has to be an infusion of new people and buildings, but that doesn’t mean you destroy people who have kept up the neighborhood, who’ve swept the sidewalk,” she said. “It’s that commitment that has made developers interested in the neighborhood — and then you’re going to penalize the people who’ve stayed?”
Jacy Webster, 56, who lives on what had until recently been an Italian-American block in South Philadelphia, said he had come to feel like a stranger.
The new arrivals, mostly young families, seem to move a step faster than he does or to not see him. Old courtesies like waving hello and casual chats have become rare.
“I don’t belong anymore,” he said.
The changes have meant that the assessment on his house has more than quintupled during the past year — to $250,000 from $45,000 — which he said might force him to move and perhaps rent his home out if he does not qualify for LOOP. The Feb. 17 deadline to apply has passed, and he is waiting to hear from the city.
Mr. Webster said, however, that there was at least one advantage to being surrounded by wealthier neighbors: “It’s actually safer than it’s ever been.”
------- "A man who is good enough to shed his blood for his country is good enough to be given a square deal afterwards. More than that no man is entitled, and less than that no man shall have." - TR
1. "I'll believe it when I see it" In response to Reply # 0
". . .Last month, Mike Duggan, Detroit’s new mayor, said property taxes would be cut by up to 20 percent to levels that more accurately represent the value of homes in the city. The reduction could cost Detroit as much as $15 million annually in revenue.
2. "I'm of two minds about this" In response to Reply # 0 Thu Dec-11-14 04:26 PM by John Forte
I hate, hate, hate, to see people lose their homes because of rising property taxes, but at the same time, far too many services are based on property tax revenue. I think if it came up for referendum, I's vote for it.
EDIT: My property tax dropped this year after DOUBLING last year. PA counties apparently sometimes go a decade without re-assessing, so when they hit they can be HUGE.