Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Tuesday, January 07, 2014

It's impolitic to say but no property taxes for older senior citizens is a bad idea

Senior crossing pedestrian signThis sign is actually in Baltimore City.

A big reason that many DC neighborhoods declined in the 1980s and 1990s was because of limited housing turnover.  As households age, they buy less stuff, they go out to eat less, and therefore local commercial districts get less business and they decline in turn.   So it's important to balance aging in place supports with neighborhood improvement goals (see "Yes, the suburbs are still screwed: aging edition").

DC's Senior Citizen Homestead Property Exemption already cuts property taxes in half.  Most older households with minimal income have already paid off their houses, and the cost of property taxes are minimal, especially factoring in the Senior Citizen Homestead exemption, which cuts their property taxes in half already.

Semi-abandoned houses owned by seniors.  Certainly you see that in many neighborhoods where houses may not be lived in but still owned by the family, because the cost of property taxes and insurance and upkeep is so low.  When I lived in the H Street neighborhood back in the pre-2005 days, you could see this a lot.

But it happens all across the city.  In my neighborhood (Manor Park-Takoma) you can see on most blocks minimally maintained properties with phone books delivered a few months ago still on the porch and overgrown vegetation (one house that had been vacant for years was recently flipped and we were shocked to see after they cut back the shrubs that there is a front porch on the house).

There are 3 houses on my face block (22 houses total) where this is the case (two other houses are similarly situated but in the process of turning over)--that's almost 15% of the housing stock on our block.

One has been in the process of renovation for 5.5 years so far--it was willed to the daughter by the deceased property owner and is still taxed at the estate/senior rate and has been long paid off so they don't same economic circumstances of a typical flipper motivated to get in and get out to increase the velocity of economic return.

According to the Washington Post article "Two D.C. bills promote property tax cuts":
One bill, introduced by Anita D. Bonds (D-At Large), would exempt low- and moderate-income homeowners 75 or older who have lived in the city for at least 15 consecutive years from all property taxes.  ...
Bonds said her bill, which would apply to longtime residents earning no more than $60,000 a year, would allow more senior citizens to stay in their homes. “Helping those who need the help,” she said. “That’s what we should do.”
While there are good intentions behind the bill, this specific legislation is a bad idea.  It won't actually assist people in staying in houses as much as it will encourage neighborhood stagnation.

If there is a problem with some people in that demographic maintaining their ability to stay in houses because of property tax costs, more specific policies should be proposed, needs-tested, rather than blanket provisions exempting most everyone from paying taxes.

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At 10:31 AM, Anonymous Anonymous said...

DC really does need to lower some of our taxes- clearly there is a burden- I would say mostly the income taxes- abd small business taxes- these are ridiculous. I am not against lowering property taxes even more - but I also agree with you that some elderly do not take good care of their homes. Right across from my new place is a partially abandoned house owned by an elderly guy- he doesnt do anything and his progeny never help him either- and it is an eyesore wrecking the whole block which is actually well maintained. Perhaps an incentive to keep up your house would be a fair game? I am not a big taxation is the answer advocate. We should lessen taxes in any and every way we can to remain competetitive with the suburbs and other place s that are robbing this city. At one time DC had the lowest taxes and we had all of the businesses here- now its mostly gone and we struggling to get some trickle back.

At 11:16 AM, Blogger Richard Layman said...

1. DC property taxes for residents tend to be lower than the neighboring jurisdictions. Tinker with the homestead exemption maybe...

2. That is a separate issue from providing the necessary assistance when people need it, like your neighbor.

A problem though is that it can be very difficult to provide help to people who don't think they need it.

As recent cases about people dying in their properties or tax liens make clear.

The Emmaus organization that provides assistance to seniors has a program for housing improvements.

And I did that post last month about Rebuilding Together and the issues about housing maintenance for seniors-low income-disabled especially.

At 11:28 AM, Anonymous Anonymous said...

Reposted from a different blog entry:

Anonymous Anonymous said...

Amen. I am a big believer that people have different housing needs at different phases of their life. I'm generally against the whole notion of "aging in place" because it often uses public subsidy to maintain a living arrangement that frankly isn't tenable. Same with senior tax exemptions.

The latest issue of The Economist has an article (pertains to Britain) about how a significant percentage of the housing stock owned and occupied by seniors is significantly underutilized, and they would rather live in smaller homes but the supply isn't available. The magazine blames zoning restrictions, but the jist of the problem is similar. People staying with their current living arrangements even though it really isn't best for them at their stage in life.

At 11:31 AM, Blogger Richard Layman said...

Thanks for your comment. Here is a link to the Economist story:

It's too bad that for the most part we have built neighborhoods to only work well for people under 65, with families, rather than to have a variety of housing types and tenure forms that can accommodate people and households of a variety of types.

At 11:36 AM, Anonymous Anonymous said...

density is better for the elderly- despite their present seeiming resistance to it in many parts of DC [ historic associations/ NIMBY pressure groups mostly seem to be elderly car centric types] however overseas you can clearly see that having density means elderly can walk the short distances more easily than driving everywhere. NIMBYs on CH I talk with all seem to think that elderly MUST have cars and easy car access- this is the exact opposite of what really works. These people are living in a fantasy world and need to wake up. My father was great walking around right up until two weeks before he passed way.You clearly do not need a car for fulfillment.

At 2:01 PM, Anonymous charlie said...

Not to sound like Richard, but this is a classic case of what we used to call tax policy being corrupted by politics.

And there isn't a perfect tax policy -- it should ultimately reflect what people want.

But you've got to find the line between noise and and effective taxes.

That all being said, I'd say both proposals are largely catering to noise. Bonds is worse because it designed to be fraudulent.

ANother option is exempt transfer taxes on elderly residents making it easier to move the property. Aging in place may be good for elders, but isn't good for urban fabrics.


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