Indiana’s longtime homeowner residents should never have to leave their homesteads because they can’t afford to pay sharply rising property taxes. Unfortunately, our county governments have few tools to prevent this. House Bill 1026 was introduced in the General Assembly this year to address and fix this problem.
HB 1026, the Neighborhood Enhancement Property Tax Relief Program bill, grants county governments and city and county councils authority to establish property tax relief programs to provide relief for longtime homesteaders who live in distressed areas experiencing rapid increases in property values.
These family homes are most often near the heart of a town or city, in areas easily accessible by transit to downtown business hubs, hospitals, higher educational institutions, and other amenities that helped drive the neighborhood’s early growth.
These were some of the first and oldest communities in our towns and cities and, later, the first to experience flight as new development continued outward. Their values subsequently declined and they became home to families without either the means to join the outward migration or the desire to leave the family homestead.
Today, there is growing interest in reinvesting in communities like these, which are highly attractive to those who want to live close to their workplace and an urban hub. This reinvestment drives values and ultimately property taxes upward. We see this in Marion County. Fountain Square, close to Indianapolis’ downtown core, had a median home sales price of $30,000 in 2010. Growing interest in the neighborhood and its access to many of the core’s amenities drove investment in new businesses and housing stock. By 2014, the median home sales price had increased to $131,000.
To local governments, increasing property taxes is a good thing. That’s why we seek to attract new businesses and residents. But this might not be a good thing to those longtime residents faced with a rapid rise in property taxes, especially those who live in these communities because they are affordable. HB 1026 would provide local governments the tools to better help families like these.
During a hearing on the bill in early January, a longtime homesteader—a neighborhood organization president who lives in the first ring outside the downtown core and just blocks from an exciting new innovation district slated to start construction this year—spoke of the irony of having worked for years to make her neighborhood safe, attractive and livable again only to now realize that one day soon she might not be able to afford to stay.
This is an issue faced by those who work to energize their neighborhoods, towns and cities. Local governments, responsive to concerns like these, need the flexibility and power to act. The current inability of local governments to proactively address this issue undermines the collective benefits community investment is intended to create. Reinvesting in our declining neighborhoods is essential, but it should not cause the loss of those who held such neighborhoods together over the years of decline.
Unfortunately, HB 1026 did not move forward this session. Instead, its fate might be shaped in a summer study committee. In the meantime, I urge the Indiana General Assembly to provide local governments across the state the necessary tools to help protect those longtime homeowner residents who could be most affected as we reinvest in our cities and towns.•
Vop Osili, a member of the Indianapolis City-County Council, was co-sponsor of a 2015 council resolution urging the General Assembly to provide local governments the power to mitigate property taxes in areas of rapid reinvestment.