10 thoughts on “Developers, Neighborhood Advocates Focus on Density and SA’s Growth

  1. The issue of property taxes.

    Property taxes are determined by only two things: property values and the tax rate. The tax rate has not increased. Thus, every person complaining about property taxes increasing is actually complaining about their property values increasing. This is an odd thing since increasing property values are actually making all of these people richer–a good thing in most people’s book.

    What causes residential property values to rise disproportionately in some areas? Two things are possible. First, the area becomes more desirable due to better schools, less crime, better amenities, more investment, cooler architecture, whatever people like, etc. The other potential reason is a shift in the potential uses of the property. Thus, if a block of single story houses is rezoned (or has the potential to be rezoned) to allow for high-rise construction (and the market would support such a use), then the property values will naturally increase. I would submit that land use policy in San Antonio is largely market-driven (sorry planners) and, thus, this shift in values is also ultimately largely tied to market forces. So at the end of the day, you basically have property taxes increasing because of forces in the property market. Unless you are against the idea of a market economy and ready to commit to something else (Marxism, anarchy, not a lot of choices), then you are basically stuck with this reality so long as you have our current property tax system.

    At the end of the day, I don’t think anyone complaining about property taxes actually wants to stop the market forces and investment that are causing their neighborhoods to become more desirable and higher value. Rather, they want to capture those gains but not have to pay the property taxes related to them. I don’t see how this is fair or just. You can test this hypothesis to see if people are really committed to the idea of staying in their homes without paying property taxes, or rather whether they are would really have low taxes versus property values. The way you would do this is to develop a program that allows people to freeze their property taxes but also their property values. The condition would be that the home would have to be sold when the owner moves to the taxing jurisdictions for the frozen property value and then the taxing jurisdictions could pocket the difference on a resale. My guess is that no one would take this deal since they will realize that they are better off just paying the property taxes, selling their home at a profit or taking out a home equity loan. Thus, they actually prefer higher taxes with higher property values versus low taxes and low property values.

    Really, the only alternatives to the status quo are (a) reducing government spending to allow the tax rate to go down, (b) finding other sources of revenue for the government, (c) shifting taxes to commercial property owners and/or land speculators, or (d) shifting the burdens of taxes from certain homeowners to other (like taxing the people who just moved here more to lower the taxes on the people already living here). You have to pick one of these and recognize the choices involved. There is no free lunch.

  2. Unfortunately, to Franklin and Schell, “meaningful input” in development means reducing the size of any development that gets proposed in their neighborhoods, resulting in less housing, less tax revenue to pay for badly-needed infrastructure, and less supply to meet the growing demand for urban housing, which jacks up prices, thereby jacking up taxes. But this argument that density is the problem is so deeply flawed, I’m becoming exhausted having to counter this myth.
    Also, Jim Bailey needs to get some context here: a flock of construction cranes does not make a construction boom. In fact, San Antonio built far more housing in the 1980s or 1990s than it did in the 2000s and is not on pace to set any records this decade either. As we learned in SA Tomorrow, roughly 2/3 of Housing is getting built outside our city limits—hardly something we should be encouraging by letting the urban nimbys continue to chip away at new housing for families.

  3. Ray, I found your comment so enlightening.
    My musings on this issue has made me ponder how/if there could be mechanism to help local residents living in neighborhoods most affected by in-fill to rehabilitate their current homes so they wouldn’t feel so “left out” and “pushed out”. (grants, low-interest loans, etc.)

  4. Ray, you are spot on. The current minority view that gets the most attention is the mistaken one that single family neighborhoods need to be preserved and kept affordable. As you point out, the opposite is true. In the urban core, this is not sustainable, and with it, those who are fighting for the ability to stay in their homes, will lose it to those who can afford it.

  5. The issues seem to be that if infill development takes place, the fabric of the original community will be changed and the tax value on real properties will increase. Part of the answer may be to allow existing residents to control the critical fabric and install a tax freeze on existing property values until the first sale/transfer of title. New development will acquire new value. There are examples in other cities….

    • What needs to be recognized is that what you are proposing will result in shifting tax burdens from one set of persons (existing residents) to another set of persons (the newcomers). California has a system like this under Proposition 13 and you can study the impacts. I personally think a system like this creates grossly unfair situations where two persons owning identical properties and getting the exact same city services can pay dramatically different amounts of property tax. While it sounds nice to focus on reducing property taxes in existing residents, an honest conversation involves recognizing that this will shift the increase the burden on other taxpayers. Again, no free lunch.

      • Your assertion that the current residents of some of these homes who resist the higher taxes (and thus, property valuations) are looking to benefit from the more desirable conditions without paying the price for them may seem valid to some… but consider the time it takes for the increased tax revenues in an area to actually trickle down into the community and actually benefit residents suddenly suffering a significant increase in their monthly expenses… Better schools, sidewalks, security, etc. does not happen immediately- the residents of neighborhoods on the upswing rarely actually see the benefits come to fruition before they are priced out of their homes. They are far more likely to pay the higher taxes while being the ones suffering the inconveniences of the actual improvement processes involved in the construction and improvement projects necessitating closed roads, sidewalks, parks, etc. for years while their kids most likely still suffer from underfunded schools, over-worked faculty and overall less opportunity. By the time the neighborhoods are improved- they won’t live there anymore. Perhaps they get a higher price when selling (if they aren’t foreclosed on) but considering the inconvenience of uprooting their family most likely to rent somewhere or buy in a neighborhood very possibly less developed than the previous one- after having paved the way with their payment of higher taxes (possibly for years) to improve infrastructure for the next wave of residents- I don’t see how the situation can be seen as in their own benefit. New buyers in areas such as these typically are looking at the long game of buying low-ish on the front end of an up and coming area and becoming part of the improvements in the neighborhood (these are rarely families with school-aged children unless they are that of the progressive, “open-minded” artsy intelligentsia types typically willing and able to pay for private school). More often these days, these homes are being snatched up as either long or short- term rental revenue streams for the new owners and the time it will take to build up the infrastructure and public services in these areas are of little importance to them. Taxes not an issue for them as that cost is absorbed by their renters or are simply within their budget when buying the house whether they choose to rent it out or not. Either way, the juxtaposition of street-art graffiti murals and a mix of old-school mom and pop restaurants and hip new local businesses make up for the inconveniences of less-ideal infrastructure, etc. Believe it or not…. some people just want to buy a house to raise their family in and leave at least enough when they die that their families don’t go into debt to cover the costs of burying or burning them. The accrual of deferred taxes, again, presents an incredible burden which would very likely produce the same result as above leaving the family with very little revenue with which to finance their relocation. This little rant does not offer a solution, I readily admit and I am not an anti-gentrification type of person in the slightest- I’m actually quite tired of people insisting it is a scourge to communities…. I believe there are incredible benefits that come with gentrification to cities and their neighborhoods… the problem is a binary view of the topic. Without understanding the nuances and severity of its affects on many of those most affected, we risk perpetuating the unfortunate cycle of bleeding urban neighborhoods of their cultural diversity, grassroots arts and non-profits organizations and so many of what originally attracted developers and new buyers to the area to begin with. And if you take a look around lately, it’s pretty obvious this country needs communities filled with culturally and socially diverse residents learning to live, understand and work with one another. It’s worth the effort for us to all figure it out. Regardless of how complex of a situation.

  6. I see a compromise answer for not having people taxed out of their life-long home being something similar to the reverse mortgage answer. Taxes due could be capped but the accumulated balance would be due upon sale. Another compromise to letting a “family” retain ownership could be resetting the cap if the house is not sold with owners passing. Owner stays in home and fair tax bill is eventually paid. Win-win if staying in home is the objective.

    • This is a fair suggestion. I would suggest that there should be interest charged on the accrued tax liability. I also would say that I think reverse mortgages, home equity lines of credit and property tax lenders basically already offer this kind of service to people that want to make this tradeoff.

  7. Meaningful input means having conversations about infill development where it is appropriate, and having those discussions BEFORE a developer comes in, says “I’m building X”, and forcing the existing people in the neighborhood to respond negatively. It also does mean a developer may need to reduce their density, particularly when they are forcing a square peg into a round hole. I can’t take any of Ray’s comments even at face value any more because EVERY comment in EVERYTHING to do with this topic includes nimby in the response. Most times, this is not the case, nor is it accurate.

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