Dear Honorable Members of City Council,
Please answer the following questions regarding pending ordinance 2013-119, tax abatement for rehabilitated real estate:
Is the tax abatement program legal?
Is the tax abatement program primarily benefiting the wealthy?
Is the tax abatement program piece-meal revision in the public interest?
The Constitution of Virginia and the Code of Virginia authorize localities to grant a partial tax exemption for a building that has been substantially rehabilitated because of age and use.
“Rehabilitate” means to bring back to good condition. By definition, a building must not be in good condition in order to be “rehabilitated”.
Many localities with tax abatement ordinances target buildings not in good condition by requiring a large expenditure on the existing building. Property owners must meet a high expenditure threshold and a low building expansion limit. The expenditure must be put into improving the existing building.
Many localities limit the building expansion to 15%: Bristol, Danville, Franklin, Fredericksburg, Galax, Hampton, Norton, Staunton, Suffolk, Winchester, Cambell, Clark, Isle of Wight, Page, Stafford, Warren, Blacksburg.
Richmond’s existing ordinance has a LOW expenditure threshold and NO limit on building expansion. Tax abatements are allowed even when a large addition is attached to a building in good condition. The ordinance was abused so often that the city assessor reportedly suspended the program.
The pending ordinance retains the low threshold and sets a building expansion limit of 100%. While the expansion limit would eliminate the most extreme abuse, it does not force expenditures into buildings not in good condition. A property owner would still qualify for a tax abatement for doubling the size of a building in good condition.
The patron of the pending ordinance is on record: “…it was necessary to make an immediate change to the ordinance to provide for ADDITIONS to single family homes.” He tacitly acknowledges that rehabilitation is not the purpose or the ordinance. (Facebook, Oct. 21)
The patron has drafted a comprehensive re-write of the tax abatement ordinance and included provisions for commercial and industrial buildings. Only the provision for residential additions is under consideration. Proceeding in this piece-meal fashion limits the public’s ability to judge and respond appropriately to all the planned changes in the ordinance.
Neither Richmond’s existing ordinance nor the pending ordinance meet the definition of “rehabilitated” nor do these ordinances target buildings not in good condition. The greatest benefit seems directed to additions on large expensive homes in good condition. Proceeding in a piece-meal fashion limits public understanding of the issues.
Richmond’s existing and pending ordinances seem to be illegal and contrary to the intent of the Constitution of Virginia and the Code of Virginia. Please inform the public.
Sincerely yours,
C. Wayne Taylor
City Hall Review, LLC
Attachment:
Table 6.1 Property Tax Exemptions for Certain Rehabilitated Real Estate, 2012.
Copy:
Jean Capel, City Clerk
Press
Better Government Richmond
Interested Parties
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