Jan 3, 2023 - Real Estate

Charlotte considers property tax relief to combat gentrification

Homes in Biddleville near Johnson C. Smith University. Photo: Danielle Chemtob/Axios

A Charlotte City Council committee will hear a proposal to revive and expand a tax relief program to help residents cope with rising property tax bills.

What’s happening: The Neighborhood Equity and Stabilization Commission (NEST), a group of community and neighborhood advocates the city commissioned after the 2040 plan’s adoption, is recommending the city help people who meet certain income and age requirements with their tax bills.

  • Under the commission’s proposal, those who earn up to 80% of the area median income, which is around $53,000 for one person and a little over $75,000 for a family of four, and are over the age of 55, would qualify.
  • The Charlotte City Council’s Housing, Safety and Community Committee will hear the idea at its meeting Jan. 3.

The big picture: With a property revaluation coming this year, many homeowners are likely to be hit with higher tax bills, especially in historically-Black, gentrifying neighborhoods around Uptown.

Why it matters: As Charlotte grows, property values are rising rapidly, putting pressure on both renters and homeowners in those areas.

  • The city has poured millions into preserving and building affordable housing in those neighborhoods, but the need continues to grow. Plus, most of that construction has been rental housing.
  • Both neighborhood advocates and city leaders have pushed for more investment to help longtime homeowners, like seniors and those on a fixed-income, stay in their homes.

Zoom out: Mecklenburg County shifted from an eight-year to a four-year revaluation cycle in 2019. That was the last time the county reassessed property values.

  • In that revaluation, the starkest increases in values were concentrated in historically Black neighborhoods surrounding Uptown, I reported for the Observer. It wasn’t unusual to see homeowners whose property values climbed 200% or 300%.
  • Of note: A higher property value doesn’t automatically translate to an increased tax bill. The county and city will still have to set tax rates.

Details: If council sticks with the criteria the NEST commission suggested, approximately 17,000 Charlotte households would be eligible for the relief, according to an analysis the city conducted that was presented at the commission’s December meeting.

Between the lines: City property taxes are only about 1/3 of a homeowner’s total bill. The rest is the county’s portion.

  • The county administers some state tax relief programs, but their income and eligibility criteria is much narrower. It also has a tax assistance program called HOMES, a grant that covers 25% of the most recent tax bill, up to $340.

Yes, but: The city had a pilot program like this before, called Aging in Place. Between the 2019 and 2020 fiscal years, $1.5 million was budgeted for the program. But the city only spent $76,056.

  • In the 2021 fiscal year, the city reallocated the rest of the money to the Corridors of Opportunity program to cover efforts like housing rehab.
  • The city conducted phone banking, mailed postcards and canvassed in neighborhoods, among other strategies to get the word out about Aging in Place.

Justin Harlow, co-chairperson of the NEST commission and former District 2 council member, tells Axios that COVID-19 played a role in getting the word out about the original Aging in Place program.

  • In an exclusive interview, he said widening the eligibility criteria will help reach more people. And he’s hoping that other city agencies can promote it. One idea could be when someone calls 311.
  • Reapplying to tax assistance can also be an administrative burden, he says. Harlow hopes participation could become automatic after someone applies the first time, with the city following up to verify a homeowner’s income each year through something like a copy of a pay stub.

“How do we prevent people from being displaced by … things that aren’t in their control?” Harlow says. “And so if we can at least aid that or slow that down, then I think we’ve done our job successfully.”


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