Charlotte and Mecklenburg officials have received some promising budget news recently: Revaluation is having less of a negative impact on revenue than expected, which means more money is coming into the city and a property tax increase is unlikely.
Even better: City Manager Ron Carlee told the Observer last month that he’s anticipating a stretch of strong economic growth. That would give the city some options – investments in capital projects, maybe, or even a property tax cut.
Here’s another possibility: Charlotte could follow other cities’ leads and protect residents of gentrifying neighborhoods.
Those cities, like Charlotte, have long encouraged urban redevelopment with policies that help revitalize struggling neighborhoods, making them attractive to young professionals. When that happens, property values sometimes spike, and the corresponding property tax bills become too steep for long-time, low-income residents to bear.
Now, cities across the country have passed or are considering initiatives that would freeze or slow property taxes for those residents. In Pittsburgh, a gentrification program caps property tax hikes at 5 percent in certain neighborhoods. In Philadelphia, the LOOP program will cap or freeze property taxes if residents lived in their homes at least 10 years and have a household income less than about $110,000.
About 20 states already have varying caps on property tax increases. North Carolina has no cap, but it does offer a “homestead exclusion” of up to $25,000 on the taxable value of residences. That’s limited, however, to the elderly and permanently disabled.
The cities with recent initiatives are largely in states that have no property tax caps. Officials say they want to prevent residents from being forced out of once-struggling neighborhoods. “We feel the people who toughed it out should be rewarded,” Philadelphia City Council member Darrell Clarke told the New York Times last month.
The initiatives also come with a macro benefit. Young professionals who move into urban neighborhoods often stay for only a few years before heading to a more suburban environment. Keeping longtime residents in their homes helps maintain a neighborhood’s character, stability and, yes, diversity. That’s good for everyone.
As with any plan, the details would be critical for Charlotte. Which individuals would qualify, for example, and should a property tax freeze or cap be transferable if a home is passed down to family member? We think any plan should be narrowly tailored for longtime residents who otherwise would have little choice but to sell their homes.
Critics will say that the free market, not government, should determine who lives where. But city growth policies already have put a thumb on that scale in places like Charlotte. We should protect, not penalize, the people who are part of our city’s core.
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