[Summit] Urgent: Immediate threat to East Side property taxes and home values

[Andrew Nosal]

A simpler formula would be to cap the dollar value of the exemption at say, 50% of the median single family house price.

Political imperatives of “wealth creation” do a lot of harm.  When house prices rise wealth is not being created.  Actual wealth is created only when housing units are created.  Exclusionary zoning and toleration of neglectful abandonment of foreclosed properties raise housing costs but do not create wealth.  They consolidate existing homeowners claims upon existing wealth, enrich mortgage lenders and put secure homes ever farther out of reach for everyone else.

If it is true that the more you tax something, the less of it there will be, an adequate home that everyone deserves should be taxed less, and unearned inflationary gains should be taxed more.  The proposed tax structure more or less does this.


> On Jun 10, 2019, at 6:19 PM, Greg Gerritt <gerritt at mindspring.com> wrote:
> 
> Mikaila, has much wisdom here.  greg 
>  
> From: Summit <summit-bounces at sna.providence.ri.us <mailto:summit-bounces at sna.providence.ri.us>> on behalf of Mikaila Mariel Lemonik Arthur <mmlarthur at gmail.com <mailto:mmlarthur at gmail.com>>
> Date: Monday, June 10, 2019 at 6:16 PM
> To: Summit Neighborhood <summit at sna.providence.ri.us <mailto:summit at sna.providence.ri.us>>
> Subject: Re: [Summit] Fwd: Urgent: Immediate threat to East Side property taxes and home values
>  
> People living in $1,000,000 houses are really not middle-class, at least in wealth terms. According to the Federal Reserve (https://www.federalreserve.gov/publications/files/scf17.pdf <https://www.federalreserve.gov/publications/files/scf17.pdf>), the median net worth of American families in 2016 was $97,300; for Blacks, it was $17,600 and for Latinos, $20,700. The median home value was $185,000 for those who own homes. The 50% exemption level, then, clearly encompasses the middle part of our wealth distribution. (For what it's worth, the median family income was $52,700.) Some of these values are a bit higher in Rhode Island--median household income in 2017, according to the Census Bureau, was $63,870, and the median home value was $257,800.  But Americans have an odd tendency to think they are middle-class even when they are actually far below or far above the median.
> 
> There is a real issue for people who have lived in a neighborhood for a very long time and who find values rising above what they can afford to pay, particularly seniors on fixed incomes. The right solution to this is not to avoid asking people to pay what their wealth means they should--it is to create a system of liens where those--especially seniors--who face getting priced out of their neighborhoods can continue to pay at a reasonable rate of increase and have the excess obtained by the city on the sale of the property after their death.
> 
> Those who complain about mediocre services need to realize that services cannot be better without more money. It costs money to fix sidewalks, to provide high-quality public schools, to ensure sufficient response time in cases of emergency, to protect our robust historical and cultural heritage, etc. The money needs to come from somewhere, and it should absolutely come in proportion to our ability to pay. Some parts of the world have instituted wealth taxes, which might be more fair than property taxes as the disparities in financial assets are far greater than those in property values. Some cities, like New York, have city income taxes, though those do not grapple with the fact that wealth inequality is far more extensive than income inequality. There are other ways to create more progressive and equitable taxation schemes besides this one, and all deserve exploration and analysis to see which can raise the most revenue the most fairly while still protecting those in gentrifying neighborhoods from displacement.
> 
> But we simply cannot demand high-quality city services and ensure that our city is a great place to live without asking that those of us who have economic privilege pay their fair share. The choice may be stark, but it is the choice we have: we craft a more equitable progressive tax structure and continue to have a diverse, exciting, welcoming city and maybe even improve our city services; we hold down taxes and end up with a city that cannot afford its schools or pot-hole-repair crews; or we increase taxes in a less-equitable fashion and end up like San Francisco, where long-time residents have no hope of affording to remain in their city (want to know more about this? Watch the new movie The Last Black Man in San Francisco--I hope none of us want that future for our city).
> 
> --Mikaila
> 
> 

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