Bacon's Rebellion

Habitat for Taxation

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by

James A. Bacon
in

As if we needed further proof of Barnie’s motto, “No good deed goes unpunished,” Habitat for Humanity homeowners in NVA are being overwhelmed by property tax increases. As noted in this Washington Post piece, the homeowners couldn’t benefit from the increases in their home’s value even if they wanted to, due to restrictions placed by Habitat.

One house built in Alexandria in 1999 has more than doubled in value since it was built and is now worth a half-million dollars. The monthly house payment, which includes real estate taxes, is up from $515 to $954 in the past 18 months — chiefly because of higher taxes.

Some jurisdictions are taking measures to reduce the tax burden on Habitat homeowners, but this is yet another example of a problem with local property taxes.

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  1. Anonymous Avatar
    Anonymous

    It is not only Habitat owners who can not benefit from the increase in home prices. It is another mistake in the concept of value. The value to a homeowner is his ability to live in the house. That value does not change for him just because someone else offered a high price for a neighboring home. In fact value is usually assumed to be inversely related to price.

    I imagine that very few people have enjoyed salary increases at anywhere near the rate that real estate taxes have increased. This can’t continue indefinitely without dislocation occurring.

    In theory, government’s job is to protect my property, but in this case the government has an interest in ensuring that someone wealthier than I obtains my property, or at least that I pay taxes at the same rate someone else is willing to pay.

    My existing government has an interest in moving me out, but my proposed new government has a stake in keeping me out, so they restrict new home construction.

    Residents of the new area might like to sell but they can’t and new residents would like to buy but they can’t. Both parties lose money and yet some idiots would claim this is in the public interest.

    That contention cannot be justified.

    This has nothing whatever to do with the number or cost of services the government is required to provide to the house and its occupants.

    Compared to the rate that home prices have increased, virtually everyone is on a fixed income. Yet local governments are treating the increased tax revenue as new income, with only a nod toward reducing the rate in accordance with assessments, let alone keeping the revenue in line with income.

    There is only one source of income, and that is cash flow, whether measured by income or by expenditures. Dislocations and rising taxes cause uncertainty that reduces cash flow and ultimately the ability to pay.

    Whether various levels of government put six hands in my various pockets or one hand, they will only find a certain amount of money. If they take too much out, I will have less to spend at my favorite vendor. Consequently, when government looks in his pocket they may find nothing.

    Ray Hyde
    Delaplane, VA

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