The ongoing debate of tax abatements and TIFs for developers in St. Louis is an essential one.
Critical thought and engagement in this topic is essential for our future as a city.
But, I get a little miffed when hear arguments that are 100% against tax incentives. I wonder if these folks realize it’s not just the developer/construction/rehab firm/law firm who benefits from these abatements. We the people do as well in some cases. If you put in the work to find a home that benefits from tax abatement or you work hard to apply for the tax credits to renovate home, the people win too.
Sometime tax breaks are a long-term, speculative play toward the future. Tax breaks for a development increase the value of dilapidated, vacant or underutilized property, incentivize investment and raise the value and tax rolls down the line.
I feel like tax breaks have played a crucial role in historic preservation and rebuilding our neglected city.
I know this personally as we purchased a historic renovation home and are now experiencing a drastic increase in our monthly mortgage/escrow payment due to tax abatements expiring this year. Man, it’s a huge deal on personal finances, the kind of thing that requires you to take stock in where and how you choose to live.
We are hard workers and have been since our teenage years. We can hopefully absorb the massive 2X plus increase in property taxes that we’ve experienced, but I can see how paying the piper can come harder to others just starting out or on even tighter budgets. Some call rising costs of living gentrification, I don’t. I’m not being forced out, but I am faced with a decision to stay or go (just like the Clash).
Luckily, in St. Louis, housing is cheap. If you don’t like the cost of living in a certain neighborhood, you can move to another and live very reasonably.
Some people I know (maybe us included) have been playing this game for years. Buy a house, love it, take care of it, be a good neighbor, help people out, get involved, move on….STL has rewarded us with rising home prices since the 1990s along the way. Sure, there are ups and downs, 2008-ish was rough, but you win some and lose some.
I can see how raising property taxes can translate to higher rents. Raising taxes means some landlords might think it’s getting more expensive here and they may need to raise the rent to cover the rising expenses and pass it along to the renter. This is a case where the argument of gentrification in a city like St. Louis is rational in my mind. Renting is smart and easy, you have way less home-related expenses, but you are beholden to the property owner’s whims and demands. It’s a give and take. Owners are more insulated and usually benefit from rising real estate markets. Who doesn’t want to make some money on an investment?
Renters may feel changes and have to move if they can’t absorb rising costs within their neighborhood.
When we purchased our most recent home it came with several years of abated property taxes. The previous owner went through all the steps necessary to do a historic rehab and get the tax credits and abatement procedures that make the numbers work for a gut rehab in a neighborhood that experienced a generation of little to no investment. It was a good deal for us too when we purchased the home and benefited from several years of lower property taxes based on the assessed value of the home prior to the renovation. And, it made the renovation from abandoned, boarded up house to great historic, modern home for a family of five.
We payed for a home history from a local firm called Sherlock Homes. It was thrilling to learn about all the people who’ve lived in our home. A Hungarian immigrant family who worked at Monsanto back when the company was located in St. Louis lived there for most of the time. They sold it to another family and in a short period of time, it fell into a landlord’s hands who didn’t care for the property and it fell into severe disrepair, they rented it out to tenants who then trashed the place. The ghost signs of vandalism and spray paint are still slightly visible in our gangway. The tax cuts were sweet for the developer and in turn, us.
It was a long-term play, and one that I think paid off…it’s just time now, in 2019 to have to pay up on the long term investment and we’re feeling that. I’m okay with it.
The neighborhood is a better place for not having lost this humble brick home. And, we’ve loved living here for ~seven years.
We loved the tax profile too. We were on the verge of not being able to afford the monthly payment when we bought the home, but the tax abatement helped make the numbers work.
Nobody likes paying taxes…this country was founded on loathing unreasonable taxation in Europe. Name me one person that wants to pay more. That’s why tax deductions are so popular and heavily leveraged. I get a little cynical when I read and hear the idealistic set talk about how tax breaks are anti-civic minded sins. In my opinion, we pay plenty of taxes to cover the expenses of running a city that is ~300K people and dropping. We need to clean house in the management of the departments, but we pay a lot of taxes already. Our sales tax rates are three feet high and rising, and that likely affects the working poor more than anyone.
I don’t mind paying people well for doing a good job, but I had to call the Collector of Revenue office several times to argue a tax issue that I haven’t been able to figure out for four years, and they couldn’t even explain the taxation policies and rules and what I needed to do to fix the issues. They all but hung up on me and I was being polite and courteous. Terrible service over at City Hall. It embarrasses me and it doesn’t have to be like this.
We need to pay fewer people more money who want and have the skills to serve the public. I just don’t get a warm and fuzzy feeling paying taxes here due to the lowest level of services we are provided. Throwing more money at it won’t fix a damn thing.
I called my mortgage company, explained the problem and they nailed it. Gave me everything I needed to know. They said St. Louis is a mess to deal with.
I don’t like the way this city is run at many levels, but especially the patronage offices and cronyism and nepotism and straight up racism and unprofessional service that is observable on so many levels.
But look at that pie chart in the banner of this post. Taxes are necessary. We have so much real need.
61% of our property taxes fund the schools.
In a city starved for residents and new jobs, we need real estate growth to raise the public revenue for the basic services and the improvements we want and need as a city. We need money in our schools.
Please trust me on this, I have had three children in the SLPS for a combined 34 school years. We’re not done, but we’re happy with the trajectory we’re on.
But, the schools are starved for money. Yes, they could be run much better, but there are many examples of us not being able to pay the qualified better and buy things we need and want.
I’ll use an example of sports…I could have chosen band, foreign language, field trips, teacher salaries, physical amenities, etc. But I’ll use sports because we have such talented athletes who are ham-stringed by crappy facilities and equipment, the most talented leave for greener pastures.
We have not one decent grass field for soccer in the entire city. I laugh when reading about the MLS groups trying to sell St. Louis as some soccer mecca. It is NOT. The suburbs west and east of St. Louis have done very, very well investing in soccer. There are beautiful artificial turf fields in Fenton, Creve Coeur, Chesterfield, St. Charles and O’Fallon, IL. They have a rich soccer culture. If you want to play soccer and you live in St. Louis, gas up your tank and waive goodbye to your free time, it’s time to drive to the outer reaches of our region for soccer.
Trust me, we need money.
But I toe the line when it comes to complaining and proselytizing for higher or more taxation in a city as strapped for people and business as St. Louis.
If you find yourself taking the stance of no-tax breaks for developers, consider the hundreds of homes rehabbed using tax credits. Think of the developers that can leverage a better a deal in the suburbs and play us against them.
My family benefits from property taxes. Everyone should pay their fair share. I get it.
Funding schools with property taxes is a fundemental inequity. It says the haves will have and the have nots will not.
The future of St. Louis schools raising more money relies on us having a lot of vacant lots with new homes or vacant buildings becoming taxable or undervalued building stock getting investment and raising property values.
We need more money and people with money and means to pay more property taxes for schools. 61% folks, that is a lot of money you (we) are providing to the schools.
Yeah, our household budget took a hit this year. We are paying more. But, I’m okay with it. The schools need it.
Think about that vacant building on your block likely owned by a suburban “investor” and if it sells and raises the value of your home, it probably is a benefit to the city and you personally.
Vacancy, abandonment and no investment is a bear that drags down our city. I celebrate investment and positivity; and most of all, more people being around me and my neighborhood.
Parts of the city are getting better, others are emptying out. Celebrate the parts that are able to attract investment and support those that aren’t.
Tax breaks have played a critical role in historic rehabs and redevelopment of challenging properties. They’re great if you can get em. It’s a bummer when they expire, but hey, we all gotta pay up when tax time rolls around.
We’re on a constant cycle of abatements and TIFs being granted and expiring. Based on the timing of the deal, you are on the winning or the losing end. I’m not 100% against tax breaks. I’m on a case-by-case based on community benefit…which is subjective.