Preventing displacement when revitalization means gentrification

Paul Carden Gentrification
Paul Carden Gentrification

The Dallas Examiner

The revitalization of an older or economically neglected neighborhood is often welcomed as a blessing by residents and advocates for those areas. Abandoned structures may be done away with, tighter code enforcement can improve the safety and attractiveness of the streets, infrastructure is modernized, and new businesses bring with them the promise of up-to-date products and job growth, all while maintaining the character of the region.

But when revitalization becomes gentrification – defined by Cambridge Dictionary as “the process by which a poor neighborhood in a city is changed by people who have money, including especially the improvement or replacement of buildings” – the undertaking might seem like an invasion to some, and leave residents feeling a financial pinch amid the drastic, costly makeover.

Members of the Oak Park Estates Neighborhood Association in Southern Dallas understand that outlook and hosted the May 21 forum, “How to Prevent Displacement from Gentrification.”

A standing room-only audience of varied races, ages and genders was in attendance at St. Augustine’s Oak Cliff to learn more about how to keep their neighborhoods safe from the high costs associated with excessive growth.

Even then, a frontage road along Marvin D. Love Freeway, down aways from the West Kiest Boulevard church, was closed as part of the new construction for the Southern Gateway Project, which widens 35E and US67. Eventually a deck park – similar to Klyde Warren Park, yet denied as a definite feature by project planner John Nguyen during a June 2016 public meeting where most residents voiced opposition to the concept – will be built in front of the Dallas Zoo.

Cheryl Jackson of the Dallas Central Appraisal District addressed attendees first. She was able to provide a crash course in the residential property valuation process used by DCAD, the proper course of action and documentation needed when protesting the finding of the agency, and the fact that county residents may volunteer to serve on the agency.

Jackson also guided the audience through the homestead tax exemption and various senior citizens exemptions, in addition to the specific residential business classes used by the agency.

Paul Carden with Venture Commercial Real Estate then addressed gentrification. Be it the southerly growth of Uptown, or the ongoing court drama between HMK Mortgage LLC and West Dallas renters and homeowners that began in 2016, older or lower income neighborhoods around the city are shifted by developers into a costlier zone that tends to push out longtime residents and businesses with higher rental prices and property taxes.

Such complaints are often brought up during public housing forums or gatherings with elected officials, especially from residents or activists representing areas south of Fair Park, or to the west or east of downtown.

Carden, a founding board member of the Southern Gateway Public Green Foundation, presented to the audience some real-world methods as a way to assist in planning and preparing for gentrification for homeowners.

“This presentation does not focus on renters,” he announced. “I know a lot of times when we talk about gentrification, it’s very common to kind of lump everyone into a single group. But the policies and tools that are available to homeowners are vastly different than the tools available to renters,” as well as the impact of those tools.

Like Jackson, Carden also emphasized the homestead exemption.

“They give you kind of a base discount that’s typically a percentage. DISD also gives you a fixed $25,000 discount on top of that percentage,” Carden said, adding that typically being 10% minus an additional $25,000.

He recommended that residents stay informed about public policy that may change the percentage discount.

“The percentage is far more important to a homeowner than the base amount,” he added, especially in a gentrified neighborhood. “The reason why is that … if you have a percentage, if your values have skyrocketed, so too does your discount,” as opposed to a fixed amount like the senior citizen exemption.

“The senior exemption kind of caps out at effectively $1,800 a year with the current tax rate,” Carden offered. “What’s far, far, far more valuable to the homeowner is the senior tax ceiling,” a state law, although the city or county also have the option of implementing such a ceiling. “It allows you to transfer the percentage of the tax you pay to the school district … it basically freezes your taxes at the moment you qualify for the senior exemption, or disabled [exemption], it’ll freeze that at that point.”

The example Carden presented was that a homeowner under the senior tax ceiling paying $500 in Dallas ISD taxes, who had already taken all of the allowable exemptions, would freeze at that level permanently.

“It can go lower if for some reason the … property value drops, but it won’t go higher than that amount as long as you are in that house,” he affirmed.

Even then, if the homeowner moves, that tax rate can be transferred to a new residence as a percentage. What that means for residents age 65 or older in lower income neighborhoods is, while they may pay no school taxes now, if they relocate, wherever they move in the state they will continue to pay no school taxes, according to Carden.

Ultimately, what these and similar ceilings and exemptions mean in the face of gentrification is that residents 65 and older have a better chance of staying in their homes as their neighborhood changes and prices go up, as long as they plan ahead and remain engaged in changes in local tax laws. This also acts as an incentive for seniors to maintain their homes to raise the property values, since they cannot be displaced by gentrification if they do not wish to be.

Planning is important for all homeowners, regardless of age or income, the speaker confirmed, but when to implement the plans is perhaps even more important.

“Consider what you want your neighborhood to be like long term in terms of housing mix and price points before values start skyrocketing and before taxes become too high,” he said.

Local residents do often desire some level of revitalizing through redevelopment, but he confessed that the irony of such action often leads to higher mortgage rates and other costs, further stating in writing, “Prepare for success in getting the grocery store, trail or amenity you wanted, but assume and prepare for higher values and taxes to follow.”

Carden’s presentation is available at http://www.opena.org/meetings.html.

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