As a result of rapid gentrification, many neighborhoods saw a significant increase in property values since the last reassessment in 2016. Those increases not only varied across Durham, but within neighborhoods, depending on neighbors’ proximity to new construction.
“They’re just starting to build houses near me. My taxes jumped up last year. Everybody else’s went up two or three years ago,” says Ms. Foust, a Southside resident who has lived in her home since 2004, a home her parents purchased in 1977.
“I got my house remodeled and technically it showed the price of my house went up. But when you looked at it online, it was still showing $65,000. Then I received a notice that valued the house at $236,000. So you know I flipped,” Ms. Foust explains.
Getting a loan to pay the taxes wasn’t an option. Moving out of her home was out of the question. So she filed an appeal, an option given to homeowners who, according to the Durham County website, “believe their appraised property value is substantially higher or lower than the price for which it could have reasonably sold on January 1, 2019.”
After an appeal, her house was revalued at $126,498, a value significantly lower than $236,000, but almost double the $64,784 value assessed just three years before. As a result, her taxes increased from about $415 to $808.
The chart below shows the change in property value since 2004.
Higher Taxes Affect Renters, Too
Renters feel the impact of higher tax bills in increased rent as homeowners who have opted to rent out their homes, generally pass the increase to their tenants. In Durham County over the last several years the number of cost-burdened renter households – those paying 30% or more of household income on housing – has increased from roughly 23,000 to more than 29,000. And in Ms. Foust’s neighborhood there has long been a larger proportion of renters than in the county as a whole. And, as in Durham County overall, half of them are cost-burdened.
If homeowners struggle to pay their taxes, the City has “relief” measures in place. However, most of the programs are set up to make sure the taxes are paid before the January 6th deadline. If homeowners receive their tax bill in August or September, even a payment plan may not offer much relief.
The payment plan they sent me was reasonable, but the payments they gave me were another bill. It really didn’t help me.Ms. Foust, Southside homeowner
Another program, The Longtime Homeowner Grant Program was “designed to assist longtime homeowners that may have experienced an increase in their property taxes due to the City of Durham’s revitalization efforts in the Southside, Northeast Central Durham (NECD), and Southwest Central Durham (SWCD) target areas.”
However, there are limitations.
In addition to homeowners’ eligibility being tied to income of 80% or below of AMI, The Longtime Homeowner Grant Program is limited to:
- Accept applications between December 5, 2019 and March 30, 2020;
- The applications being accepted through the end of March 2020 are for the increased tax paid for the 2018 tax year;
- Target only three neighborhoods (Southside, Northeast Central Durham, and Southwest Central Durham); and,
- Residents of the neighborhoods mentioned above who also live within 500 feet of a City housing investment. (A map is provided on the City’s website to help determine whether or not applicants are within the appropriate boundaries.)
The application [for the Longtime Homeowner Grant Program] covered the increased tax paid in the previous year. The proposed program would provide the grant at the same time that the tax bill is paid.Jim Svara, Durham Resident
A 2020, Equity-Based Alternative
Durham residents Jim Svara and Raymond Eurquhart (Brother Ray) believe they have a better alternative, one that they have been working on since 2015. Their proposal, the Longtime Low-Income Homeowner Tax Assistance Program, would continue the city’s Longtime Homeowner Grant Program, yet broaden its scope to cover all neighborhoods, making it county-wide.
Svara points out another important distinction: “The application [for the Longtime Homeowner Grant Program] covered the increased tax paid in the previous year. The proposed program would provide the grant at the same time that the tax bill is paid.”
By covering tax increase, it meant that if your bill was already high and didn’t go up, you didn’t qualify. The proposal we’re working on is based on percentage of income.Raymond Eurquhart, Community Activist
Rather than covering the tax increase, this expanded tax assistance program is based on percentage of income. For example, for a one-person household whose income is less than 30% of AMI (income up to $17,820*), the maximum property taxes paid by the homeowner will be $178, which is 1% of income. The rest of the tax will be covered by a grant for the homeowner that is paid to the County Tax office.
“By covering tax increase, it meant that if your bill was already high and didn’t go up, you didn’t qualify. The proposal we’re working on is based on percentage of income. We’re bringing this forward as a new expanded, broader and fairer approach, one that builds in equity in terms of being based on income,” Brother Ray explains.
Svara and Eurquhart estimate that 6,100 households would be newly-eligible this for tax assistance (based on the state-approved Homestead Exclusion tax relief program). And one of the program’s strongest components is that it will provide relief in the year that the taxes are due rather than as a reimbursement.
What Comes Next
Ultimately, Brother Ray and Jim hope the program will be adopted into the City’s budget for the fiscal year 2021, scheduled to be approved in June and to begin in July of 2020. If that fails, they are prepared to lobby to get the proposal on the November ballot as a referendum to see if Durham’s residents agree that low income homeowners should be protected by this program.
*HUD 2019 income limits