Protections to Off-Set Gentrification's Displacement Effects.
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There are a set of three property taxes proposals that can strongly benefit struggling communities in Indiana that are on the brink of having major market shifts. The two proposals would address securing the long-term residents place despite increased property values and the other would hold down property tax bills for new comers who buy properties in designated areas of depressed or endangered communities. The third would encourage home owners to fix up their homes both aesthetically but as well as in efficiency.
Proposal One should provide a protection for people who have held title to their homes for 10 years or more or have held a land contract or some other means of legal convenience for at least 10 years and are living in a locally designated geographically specific area that is likely to see rapid property tax increases. The protection could best be implemented on having their taxes be based on their purchase price of the property plus the average annual growth up to the year of nonstandard property value increase. The property then would resume normal tax rates concurrent with the area upon the date of sale or transfer to a new owner.
Proposal Two would allow local municipalities to designate geographically specific area that are severely under occupied (below 75% occupancy) and are facing crippling property value which would limit natural resurgence. Those who purchase primary residences of 1-4 units or build homes in the designated area would have a tax abatement for a period of 5 years. The life of the designated area status would be limited to a 5-year period limiting the tax revenue loss to a maximum of 10 years for the area and 5 years per location. The property owner who must be a resident of the property to claim the abatement sells the property in less than 15 years from the date of purchase or build completion must pay the accumulated taxes at the close of the sale. This by its self would encourage the person to re-invest those savings back into their home.
Both proposals would encourage local residents to not fight the influx of new neighbors and on the same token encourage people to buy in early. Furthermore, this strategy would have a positive effect on the business community to locate near a resident stable community that can provide them employees and a significant customer base. Lifestyle based businesses such as restaurants, entertainment venues and recreation venues would also be attracted to the community.
The final proposal would adopt a strategy that can be applied to the community in steps to encourage homeowners to fix up their properties to the new standard. There are already tax deductions that are available on the income tax to make homes energy efficient. However, what is missing is a credit that could encourage people in specific geographical areas that are severely under occupied (below 75% occupancy) and are facing crippling property value which would limit natural resurgence to fix up their homes. This credit could be funded by the new tax revenues created by rising property values. Understanding that if all three proposals passed that the new revenues would be limited for a period of time does not demean the value of this proposal as little to no revenues will be collected if values to not increase.
Protecting against the Displacement Effects of Gentrification is Possible!
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