Housing in Charlotte

[kermit]

Forgive me if there was an existing thread for this.

I was fooling around with some old Moody's reports for Charlotte metro growth and pulled together this chart showing multifamily permits (in the metro as a whole) as a percentage of total residential permits (single family + multifamily). I am stunned that this ratio has been essentially flat for 23 years. 

The metro area definition changed in 2004 and 2013 but I don't believe that impacts this ratio significantly

Also put this comparison of total permits issued (SF +MF) vs population change. The two years where the metro definition changed are omitted from these data (and excel was told to fill in the gap in the graph).  Ignore the 1997 population change number as it was zero (I did not have 1996 data from Moodys) so excel shows 1997 as zero)

Pretty serious under-provision of housing 2005-2007. Some hints of oversupply recently (which is interesting considering prices).

What a Friday happy hour this was! [nerd]

Edited March 31, 2023 by kermit

[kermit]

I had forgotten about this crane in Sedgefield (Marsh project on Poindexter). It reminded me that Charlotte does do a pretty good job with infill housing production in areas adjacent to rail. This is what makes it so criminal that we are inept with transit expansion. Every day we are delayed, the worse the housing affordability situation  gets.

 

Edited April 1, 2023 by kermit

[kermit]

Certainly seems like the country club tax value declines are a textbook example of why we would be better off with a land value tax (if the assessors had valued the clubs based on the price of housing that could be built atop the golf courses those valuations would have certainly increased in line with county averages. If valued based on conversion to much denser housing then the assessed value would have skyrocketed).

Charlotte's got a lot of golf courses and parking lots. Not so much affordable housing however...

https://www.wfae.org/charlotte-area/2023-04-05/county-commissioners-call-country-club-valuations-nauseating-and-unfair

 

Edited April 6, 2023 by kermit

[CLTRaised]

3 hours ago, kermit said:

Certainly seems like the country club tax value declines are a textbook example of why we would be better off with a land value tax (if the assessors had valued the clubs based on the price of housing that could be built atop the golf courses those valuations would have certainly increased in line with county averages. If valued based on conversion to much denser housing then the assessed value would have skyrocketed).

Charlotte's got a lot of golf courses and parking lots. Not so much affordable housing however...

https://www.wfae.org/charlotte-area/2023-04-05/county-commissioners-call-country-club-valuations-nauseating-and-unfair

 

Would the land value tax not just punish all landowners in Charlotte? I imagine it would expedite the rate of punishing lower income land/property owners that are close to areas experiencing development, sure it would cause these country club people to pay more, but it would also cause property taxes to skyrocket for practically anyone in the city or someone with a larger lot. Maybe I am misunderstanding the core proponents of the land use tax, but to me it seems like a slippery slope allowing a third party to attribute qualities to property that do not exist presently. Further, unless changes were made to how home valuations are done, if one property is assessed to a greater amount due to its potential use, then all the surrounding properties would also be increased as well once that first property is sold, no? I would assume there would be an unspoken cap to how much a property value could rise to, especially if the lot is smaller but with the ability for an assessor to just simply state that a certain type/amount of properties could be placed on the lot seems unnerving. 

I could see an argument for commercial property owners to pay land use taxes, but then there would still be an issue with small commercial property owners that own the buildings that their businesses operate. Like I said, maybe I am confused on the inner workings of this tax method, but I have seen the idea of land use taxes being enacted frequently in the last few days in numerous cities and to me it just does not seem like it would be beneficial for anyone except the city tax coffers and developers that are eager to get their hands on certain properties around the city from citizens that can no longer afford their property taxes post revaluations.

Based on the article, the current method is also punishing lower income people, I believe that homeowners should not have their property taxes reassessed until their home is sold to a new owner, or if new city amenities are constructed near the property. It is not the property owners fault if the land becomes more valuable to the city throughout the duration of their ownership, they cannot see the future and the amount of development that is coming, or necessarily even want it. I do not agree with people that support restrictions on developers to prevent gentrification, the root of the cause is with the city/county governments, unfortunately they seem to want to complain about these issues impacting lower income residents but do nothing to curb their part in the issue. If taxes were increased once transactions are made then the developers/owners of the newer larger developments would be monetarily responsible for the new tax burdens placed on infrastructure, not the surrounding residents.  

Maybe all of this is idealistic thinking, or maybe I just am confused, but the solution seems simpler than what people are currently suggesting.

Edited April 6, 2023 by CLTRaised
typos

[KJHburg]

South Carolina uses a tax system that bases it what it was last sold for and existing long term owners benefit from much lower tax values.  I have owned a condo in Hilton Head for 20 years and my taxes are much lower like 1/3 of my neighbors in my same condo community only because they bought more recently and theirs is based on their recent sales price.   I am not sure this is the answer to the problem as you could have someone owning a home 20 years making a high income benefiting from the SC approach.   California uses an approach like SC and it has caused all kinds of problems with local government funding.  (Prop 13) 

My idea would be give tax relief to the people who really need it the lower income homeowners.  NC has a program right now that lets your value be 50% of the assessed value based on your income.      https://files.nc.gov/ncdhhs/documents/files/TaxReliefPrograms.pdf

Here is an application for this program and is offered in all 100 counties.  https://files.nc.gov/ncdor/documents/files/2021-AV-9-Revised-Secured.pdf

I would say expand this program to capture more property owners who are have lower than median incomes and own their homes by loosening some of the requirements especially on the income side.  

The only reason I even knew about this program I was watching the local Government access tv channel one late night when I had insomnia and discovered my aunt in Concord could benefit from this program.  

Mecklenburg County information on these programs.  https://cao.mecknc.gov/services/tax-relief

I have personally found this information is not widely known and my elderly aunt thanks me every year for finding it.  

 

Edited April 6, 2023 by KJHburg

[kermit]

On 4/6/2023 at 2:04 PM, CLTRaised said:

Would the land value tax not just punish all landowners in Charlotte? I imagine it would expedite the rate of punishing lower income land/property owners that are close to areas experiencing development, sure it would cause these country club people to pay more, but it would also cause property taxes to skyrocket for practically anyone in the city or someone with a larger lot. Maybe I am misunderstanding the core proponents of the land use tax, but to me it seems like a slippery slope allowing a third party to attribute qualities to property that do not exist presently. Further, unless changes were made to how home valuations are done, if one property is assessed to a greater amount due to its potential use, then all the surrounding properties would also be increased as well once that first property is sold, no? I would assume there would be an unspoken cap to how much a property value could rise to, especially if the lot is smaller but with the ability for an assessor to just simply state that a certain type/amount of properties could be placed on the lot seems unnerving. 

I could see an argument for commercial property owners to pay land use taxes, but then there would still be an issue with small commercial property owners that own the buildings that their businesses operate. Like I said, maybe I am confused on the inner workings of this tax method, but I have seen the idea of land use taxes being enacted frequently in the last few days in numerous cities and to me it just does not seem like it would be beneficial for anyone except the city tax coffers and developers that are eager to get their hands on certain properties around the city from citizens that can no longer afford their property taxes post revaluations.

Based on the article, the current method is also punishing lower income people, I believe that homeowners should not have their property taxes reassessed until their home is sold to a new owner, or if new city amenities are constructed near the property. It is not the property owners fault if the land becomes more valuable to the city throughout the duration of their ownership, they cannot see the future and the amount of development that is coming, or necessarily even want it. I do not agree with people that support restrictions on developers to prevent gentrification, the root of the cause is with the city/county governments, unfortunately they seem to want to complain about these issues impacting lower income residents but do nothing to curb their part in the issue. If taxes were increased once transactions are made then the developers/owners of the newer larger developments would be monetarily responsible for the new tax burdens placed on infrastructure, not the surrounding residents.  

Maybe all of this is idealistic thinking, or maybe I just am confused, but the solution seems simpler than what people are currently suggesting.

Yea, these are fair points.

The immediate problem at hand is the current tax code makes it awfully easy (inexpensive) for some property owners to sit on land and leave it undeveloped. This keeps density low, and reduces the supply of affordable housing -- in this sense the current property tax system is punitive against people searching for affordable housing now. The only way to house new arrivals in Charlotte is to get underutilized land into the housing market, otherwise we just sprawl into environmental oblivion -- and a land value tax is one (potentially flawed) way to accomplish this (as I understand the outlines of it).

When I think of a land value tax, I initially think of at grade parking downtown. Putting a potential value on that land seems straightforward.  I agree that the suburban golf course is a trickier situation. Its clearly underutilized and I suppose an appraiser would have an easy time valuing it as equivalent to the adjacent housing but I can see how it might be tempting to value it at much higher densities (should zoning permit that). I can see how that might open a can of worms, but clearly it makes no sense for the city to allow property tax revenues from these parcels to continue to decline, taxpayers are essentially subsidizing their declining business (in the same way we are currently subsidizing uptown parking lot owners while while they wait to sell or develop).

Despite what I said above, I am not sure I am (personally) comfortable equating revaluation with punishment -- I think the country club example reminds us that revaluation can (potentially) also be a way to increase equity, particularly when done on a revenue neutral basis.  While any reshuffling of the status quo creates disruption and displacement, there are often positive aspects to change that should also be part of the cost-benefit calculation.

Edited April 10, 2023 by kermit

[CLTRaised]

On 4/6/2023 at 7:03 PM, kermit said:

Yea, these are fair points.

The immediate problem at hand is the current tax code makes it awfully easy (inexpensive) for some property owners to sit on land and leave it undeveloped. This keeps density low, and reduces the supply of affordable housing -- in this sense the current property tax system is punitive against people searching for affordable housing now. The only way to house new arrivals in Charlotte is to get underutilized land into the housing market, otherwise we just sprawl into environmental oblivion -- and a land value tax is one (potentially flawed) way to accomplish this (as I understand the outlines of it).

When I think of a land value tax, I initially think of at grade parking downtown. Putting a potential value on that land seems straightforward.  I agree that the suburban golf course is a trickier situation. Its clearly underutilized and I suppose an appraiser would have an easy time valuing it as equivalent to the adjacent housing but I can see how it might be tempting to value it at much higher densities (should zoning permit that). I can see how that might open a can of worms, but clearly it makes no sense for the city to allow property tax revenues from these parcels to continue to decline, taxpayers are essentially subsidizing their declining business (in the same way we are currently subsidizing uptown parking lot owners while while they wait to sell or develop).

Despite what I said above, I am not sure I am (personally) comfortable equating revaluation with punishment -- I think the country club example reminds us that revaluation can (potentially) also be a way to increase equity, particularly when done on a revenue neutral basis.  While any reshuffling of the status quo creates disruption and displacement, there are often positive aspects to change that should also be part of the cost-benefit calculation.

I see the benefits of it in regards to parking lots, especially Uptown, it would definitely motivate development for underutilized areas in developing areas. I think my main concerns are when it comes to residential areas. The more I think about it, the more I think my issues come down to property taxes rising due to nearby properties having an increase in value, which is likely the reason why these lower income property owners are in their current predicament and likely would be in any property tax reform. Maybe a neighborhood wide moratorium on revaluations in districts that are seeing drastic changes in property values that allow property owners to plan and adjust to future rises in property taxes could work?

With a land use tax, would areas of abandoned/mostly vacant strip malls see a rise in property taxes? I would think that would accelerate the decay of areas that are already teetering on the edge of going under. However, maybe it would inspire growth out of necessity to turn a profit but there isn't a guarantee that a developer would take on the project. Are there any cities that currently impose a land use tax? I think using it for areas around Uptown to see how it carries out would be useful insight before applying it to the whole city.