Gentrification and Austin Housing Prices

[Azul]

Originally Posted by zrx299

Property taxes based on perceived paper value is just plain evil and feudalistic.

If/when you sell, that's an entirely different story. That's capital gains.

Plenty of much more fair ways to raise funds for local services that don't have people guessing and paying ever increasing "rent" on their own damn property every year. Why even bother owning at that point?

As someone who isn't familiar so much with taxation and the politics behind it, could you explain what other methods a jurisdiction could pursue for taxes? I haven't ever thought of an alternative to property taxes (except maybe Land Value Taxes) and I'm curious if you've ever thought through any alternative to what we have now.

[urbancore]

Originally Posted by zrx299

Why even bother owning at that point?

I don't know enough about different taxing systems to dispute your idea, but I do have a few great reasons to own, despite the current tax system (which I loathe BTW)

1. Pride of ownership....nothing quite like coming home to a home you own...even better, one you built.
2. The tax credit on the interest on your home mortgage.
3. ZERO tax on any gains when you sell up to $250k/single or $500/married
this alone yielded me most of my net worth over the last 15 years.
4. Hedge against inflation. You lock in a price and an interest rate that keeps your payment relatively steady (taxes can only rise 10%/yr)...I have neighbors who live in $800k homes who pay $2k/mo mortgage cause the bought it when it was worth $300k.
5. You can customize, to a large extent, your house. Especially in the city...I personally would never live under an HOA.
6. Gain equity that you can tap into relatively easily. You can always quickly sell for 90% of value, and move within a month or so.
7. Stability, you are not at the whim of a landlord.....who may sell, redevelop, etc.
8. Respect. Let's face it, when I rented I was taken less seriously than after I purchased.
9. Finances. Renting is relatively easy. Purchasing is hard. You have to swallow your pride, save your money, learn how to acquire, manage, budget, invest and spend your money. I thought I knew a thing or 2 prior to applying for a loan. I knew squat, I'm much more in tune with my finances. I'm not afraid of the process, and have actually learned how to use the banks to help me get where I want to go. That took building a relationship with a local banker. Now when I go to them, I'm treated as repeat customer instead of someone who wants to cash a paycheck. My banker never said "no", he said..."not now, but here is what you need to do, and come back". Honestly, that taught me more about becoming an adult, a man, than probably anything else I can think of just now.
10. Knowledge. When I rented, i didn't care about building practices, materials, landscaping, insulation, green building, zoning, city planning.....now I care about all those things, and have a working knowledge of the entire process. I am a jack of many trades now, all due to the fact I am a home owner. My wife changed careers, and now designs homes for a local infill home builder. Added bonus, my children will watch us build our next couple homes, and learn not to be afraid of the process themselves. It's quite fulfilling.
11. Creativity. I never knew I was "creative". Home ownership, remodel and building, forced me to develop creatively in design and problem solving.
12. TCAD does not force people to move, they put a lien on your home and you pay it when you can, when you sell, when you die. I know this because TCAD put a lien on my property a couple times during a rough patch 10 years ago. I was never "forced" to do anything, but make more money to pay it off. They go to a judge, win a judgement, and file a lien. Nobody comes to your house to force anything.


I can go on, but those are the reasons I can think of off the top of my head.

[zrx299]

Originally Posted by Azul

As someone who isn't familiar so much with taxation and the politics behind it, could you explain what other methods a jurisdiction could pursue for taxes? I haven't ever thought of an alternative to property taxes (except maybe Land Value Taxes) and I'm curious if you've ever thought through any alternative to what we have now.

I'm far from an expert, but a few ideas come to mind: State and county income tax, for one. Everybody pays their "fair share" in a predictable fashion. No more of this obscene nonsense of taxing paper valuations of something, which is largely out of your control. Something is only truly worth what someone else is willing to pay for it.

Home ownership should be celebrated, not saddled with a tax burden tied to wild price inflations. No more of the yearly assessment garbage.

No more "oh you put a deck in, so now you owe the city an extra $950 this year".
Did you get an extra $950 worth of services for that year?
Did your new deck somehow make you extra money this year?
Of course not. There's zero logic to it.
(If you sold, that's entirely different. That's Capital Gains)

[lzppjb]

Originally Posted by Azul

As someone who isn't familiar so much with taxation and the politics behind it, could you explain what other methods a jurisdiction could pursue for taxes? I haven't ever thought of an alternative to property taxes (except maybe Land Value Taxes) and I'm curious if you've ever thought through any alternative to what we have now.

Sales tax

[atxsnail]

Originally Posted by Azul

As someone who isn't familiar so much with taxation and the politics behind it, could you explain what other methods a jurisdiction could pursue for taxes? I haven't ever thought of an alternative to property taxes (except maybe Land Value Taxes) and I'm curious if you've ever thought through any alternative to what we have now.

There aren't really that many options for taxation just property, income, and consumption. There are various flavors of each, however. The tricky thing is to figure out how to balance between regressive taxes which shift the tax burden toward the lower end of the income spectrum and progressive taxes which place more of the burden on the wealthier among us (all while still getting enough to fund services).

Consumption taxes (e.g. sales, gas) tend to be regressive because there's an upper limit to how much of their money rich people spend buying stuff. Income and Property taxes are generally more progressive as higher incomes are in higher tax brackets and those people tend to have more expensive homes.

Apologies if this isn't what you meant. There are probably other ways to make property taxes more "fair", like getting rid of the non-disclosure status in Texas and re-balancing the burden between commercial and residential real estate.

[urbancore]

Originally Posted by atxsnail

Property taxes are generally more progressive as higher incomes are in higher tax brackets and those people tend to have more expensive homes.

exactly, the problem arises in fast growing cities with rapid appreciation. My tax bill is $30k/yr and should be closer to $50k/yr if it was based on current market price. If my mortgage wasn't low, there is no way I could afford it. I couldn't afford to "buy" my house, no way. Not saying I "struggle", but I certainly can't let up off the gas.

[zrx299]

Originally Posted by atxsnail

There are probably other ways to make property taxes more "fair", like getting rid of the non-disclosure status in Texas and re-balancing the burden between commercial and residential real estate.

Corporate welfare must come to a complete halt.

It would require a federal mandate outlawing it, to keep states & counties from "competing" against each other, but ultimately that burden in its current form gets thrown right on the backs of the working public.

"Set up here and bring X number of jobs. We'll give the business a 15 year tax break. Why? Because the people taking those jobs will get taxed the full rate."

Either everybody/every entity pays (including Churches!), or get rid of the entire property tax system.

[urbancore]

Originally Posted by zrx299

(including Churches!)

Especially this. I've seen a house that was a "church". Which is totally legal. They pay zero taxes. It is an Eastern Orthodox church. It is a house in a SF neighborhood, they set up a small chapel in the living room, and they live there.

https://www.google.com/maps/place/20...!4d-97.8055471

I can't say I blame them for working the system.

What stops me from forming my own religion, and taking my house off the tax rolls? It all stinks. "Welcome to St. Urbancore Church....none are welcome"

[KevinFromTexas]

https://www.kut.org/post/how-wave-te...RRL6incur6tbQk

How A Wave Of Tech Expansion Could Further Strain Affordability In Austin
By JIMMY MAAS, KUT • 7 HOURS AGO

If you were relieved by last year’s announcement that Amazon’s HQ2 would go elsewhere – along with its potential 50,000 employees over 15 years – know this: Expansion efforts by Amazon, Apple and Google could produce a near-equivalent wave of folks coming to Austin – and sooner than any HQ2.

Apple is planning to bring 5,000 employees by the end of 2021. When complete by the middle of the next decade, the campus will host 15,000 workers.

In February 2011, about 53 percent of homes in the Austin area were priced below $200,000, according to Luis Torres, a research economist at Texas A&M University's Real Estate Center. Right now, he said, only 8.6 percent of homes are selling for less than $200,000.

[atxsnail]

Originally Posted by atxsnail

There aren't really that many options for taxation just property, income, and consumption. There are various flavors of each, however. The tricky thing is to figure out how to balance between regressive taxes which shift the tax burden toward the lower end of the income spectrum and progressive taxes which place more of the burden on the wealthier among us (all while still getting enough to fund services).

It seems the lege has decided which way they want the regressive/progressive balance to lean (as if there was any doubt as to their preferences):

https://www.statesman.com/news/20190...property-taxes

[migol24]

***Mod Edit*** The following discussion was moved from another thread and based on the suggestion that projects like Capitol Studios should be located in other areas of Austin.



I think Clarksville and Travis Heights are fine just the way they are. Those neighborhoods should be preserved as best as possible. Maybe I'm being a NIMBY but I don't live there so it's technically not my backyard. Anyways, those neighborhoods don't need these kinds of projects.

[Urbannizer]

Originally Posted by migol24

I think Clarksville and Travis Heights are fine just the way they are. Those neighborhoods should be preserved as best as possible. Maybe I'm being a NIMBY but I don't live there so it's technically not my backyard. Anyways, those neighborhoods don't need these kinds of projects.

I can see this working for W Lynn and Enfield in Clarksville. There are some run down spots along both that could be redeveloped.

[migol24]

Originally Posted by Urbannizer

I can see this working for W Lynn and Enfield in Clarksville. There are some run down spots along both that could be redeveloped.

Absolutely not Enfield.

West Lynn, mmmmaybe. Depending on the scale of project. Hopefully it's small and doesn't over shadow the vibe and feel of those neighborhoods.

[kingkirbythe....]

Originally Posted by Urbannizer

I can see this working for W Lynn and Enfield in Clarksville. There are some run down spots along both that could be redeveloped.

Yes! These streets are perfect for this sort of stuff. Some Great Streets infrastructure and development would make for walkable "main street" node. It would slow down the traffic and give Enfield some good character.

[migol24]

Fixing the street grid and sidewalks and adding bike lanes are all great. But I think those can be implemented without sacrificing the architecture and charm of those neighborhoods. I just don't understand why everyone is always so prone to add generic mid-rises, as if that's the end all to urbanism.

There are plenty of ways that traffic can be improved, especially speeding vehicles. There is a YouTuber that I follow that heavily deals with this sort of thing.

This video in particular applies to the topic because these neighborhoods kinda function like a suburb. They're not for mixed use projects, but rather for families and people with yards. There is nothing wrong with that.

Although, I do concede that projects like this along Exposition would work great.

https://youtu.be/MWsGBRdK2N0

[427MM]

Originally Posted by migol24

I think Clarksville and Travis Heights are fine just the way they are. Those neighborhoods should be preserved as best as possible. Maybe I'm being a NIMBY but I don't live there so it's technically not my backyard. Anyways, those neighborhoods don't need these kinds of projects.

Don't see how protecting single family zoning affordable to only our top ~5% of income earners does anyone any favors (excluding those owning such structures/land). Perhaps we could at least get rid of Compatibility and parking requirements on all of our corridors? Sad the lowest hanging fruit of all can't even seem to happen.

[Urbannizer]

Originally Posted by 427MM

Don't see how protecting single family zoning affordable to only our top ~5% of income earners does anyone any favors (excluding those owning such structures/land). Perhaps we could at least get rid of Compatibility and parking requirements on all of our corridors? Sad the lowest hanging fruit of all can't even seem to happen.

This. It’s a bit of a selfish way of living. The city can at least highlight major thoroughfares of a neighborhood towards dense multifamily housing as it’d enhance the area as a whole especially with retail (Capitol Studios has retail). Most of the SFH homes along both stretches aren’t worth saving.

[migol24]

I wasn't going to respond because I've been creating controversy lately, no matter what I say. But I think my stance is being misconstrued. First of all, I am not one of these top income earners, so I'm by no means being selfish. I don't even see how preserving neighborhoods architectural charm equates to defending the 5%ers. That's a strawman, imo.

I'm all for affordability and single family housing but I'm also against pasty generic looking mid-rises that pass as affordable when they're anything but affordable. A lot of these kinds of places are going for $1200+ for studios. That's not exactly affordable. These types of developments are only going to make neighborhoods like Hyde Park, Travis Heights, Clarksville, North Loop, Crestview generic losing the fabric of its original charm and more expensive.

I prefer these developments being built along more major streets like South Congress, Exposition, Lamar, etc. Level those poor shopping strips along Congress and Oltorf, or up along North Lamar. The neighborhoods should be preserved as best as possible.

We think that any development means progress. Look at the old photos of Austin and how a lot of those old beautiful architectural buildings were leveled all in the name of progress. Instead they were replaced with concrete, parking lots or ugly brutalist buildings. Not every development is progress.

But sure, I get that some development aren't worth saving. That's where I think some of you miss the mark because with the redevelopment a lot of those projects are actually gonna be worth a lot more than what those projects are worth now.

Maybe the problem isn't nimbyism. Not in this scenario, at least. Maybe what the problem is is pressuring our city officials to make our city affordable. I dunno, but I sure as hell didn't make that comment to make this about affordability.

[H2O]

If every residential lot in Austin allowed up to 4 residential units (as federal residential mortgage underwriting standards allow), and we eliminated minimum parking requirements, our neighborhoods could begin to resemble Riverdale or other inner-city Toronto neighborhoods. As the video pointed out, Riverdale is significantly more dense than any Austin 'neighborhood'. By neighborhood I do not mean mixed-use districts and developments like Downtown, West Campus, Triangle, Domain etc. Having lived in both, I can tell you from direct experience that Mueller is the closest thing we have to Riverdale in Austin. Our minor neighborhood corridors such as West Lynn, Enfield, Exposition, E Cesar Chavez, E 12th Street, 38th, 45th etc, would be well suited to mid-rise, mixed-use infill development (3-5 stories) similar to the Danforth seen in the video (which has a subway running under it).

[427MM]

Originally Posted by migol24

I wasn't going to respond because I've been creating controversy lately, no matter what I say. But I think my stance is being misconstrued. First of all, I am not one of these top income earners, so I'm by no means being selfish. I don't even see how preserving neighborhoods architectural charm equates to defending the 5%ers. That's a strawman, imo.

Nothing "strawman" about it. Look up the home values in the neighborhoods you mention, compare them to our MFI chart and see that the homes are only affordable to our very top income earners. If housing that is affordable to a broader range of income earners was the goal, we'd ditch the single family zoning and allow groups of four-six middle income earners to team up and outbid the sole high income earner. As it stands, these areas are only accessible to our top income earners--exclusionary zoning doing what exclusionary zoning does.

I agree with the charm of these areas being a very real thing. Just seems we could protect more of our social character by allowing the physical character of these areas to thicken over time. Until we elect more council members who care more about housing for the masses than complaints from $1M+ homeowners it seems may just keep getting worse.