Ten Bucks Says My Neighbor Won't Lose Her House: My Gentrification Rant

The gentrification of DC is old news.  But with the Ward 5 special election, and new developments popping up throughout Northeast, it continues to be a hot topic.  I wanted to keep his blog light - I've posted one mildly sarcastic video about gentrification - but I now feel compelled to weigh in. 

Luke C. Moore Academy

There are rather esoteric arguments for and against the gentrification of a neighborhood.  New, more affluent residents can revitalize a community.  But many people argue that they'll be "pushed out" by the newcomers.  Is this concern a reality?

One of the most comprehensive studies on the issue says, "No."  As Harlem gentrified, Lance Freeman found residents were staying longer.  As the New York Observer points out: "Think about it: Would you be inclined to leave your apartment if the neighborhood was improving?"

But let's set aside that data, and insist gentrification will displace residents.  How do we fight it?  Two simple steps: First, increase home ownership.  Then, decrease property rates.  If people can afford to stay in houses they own, they can stay put as long as they like.

Construction at Monroe Street Market

And here's the great news:  Brookland is already there.  We have a surprising level of home ownership, and DC has low tax rates for occupied residential housing.  (Not to mention the Homestead Deduction and the Senior Citizen Real Property Tax Relief.) 

So even if the unthinkable happens - young residents buy their first home in Brookland and pour their hearts into improving their homes and their street, our long-time residents are safe.  I'll prove it to you:

Let's look at my neighbor, a 67-year old longtime resident, who owns a row house which she has had difficulty maintaining since her husband passed.  Let's put the tax appraisal of her home at about $300,000.  In DC, she qualifies for the homestead deduction, which brings the taxable value down to $232,500.  Taxing at the occupied residential rate of 0.85 percent, she owes $1976.25 annually.  She's also eligible for the Senior Citizen Real Property Tax Relief, reducing her tax liability 50 percent.  So she owes $988.13 annually, a monthly tax liability of $82.34.

Now let's say young, dual-income couples move in on both sides.  They add landscaping and fix up their exteriors - frequent 311 calls and weekend trash patrols leave the street a little tidier.  This bumps up my sweet neighbor's property value by 33 percent without her doing anything!  So how much will she owe now?

DC limits the amount her tax assessment can increase to 10 percent a year, so even though the assessor now values her home at $399,000, she can only be taxed on $330,000.  Same process: subtract the homestead deduction, then multiply by 0.85 percent.  Apply the Senior's relief, this puts us at $1115.63 annually, a monthly tax liability of $92.97.  (Edit: Her previous monthly tax liability was $82.34, which has now increased to $92.97, an increase of about ten dollars.)   

Ten dollars a month.  Ten.

Now, you can - and should - point out that ten bucks a month in many households, especially where someone might be relying on Social Security, is a noticeable shift in the budget.  You could also argue that ten bucks a month is an extraordinary value, if your neighborhood improves so drastically that unimproved property values jump 33 percent.  Either way, she's not losing her house over ten dollars. 

Brookland Hardware

We have big yards in Brookland.  We're on the Red Line.  We have several buses that go from our hood to downtown.  We have the Brookland Cafe, Brookland Hardware, and now, the best pizza in DC.  Monroe Street Market is on its way up, and the Colonel Brooks project is right behind it.  We have an amazing neighborhood that is going to continue to attract a diverse group of people.  This is a good thing.

Even better, we have long time residents in homes they own, paying taxes at low rates.  So our neighborhood is guaranteed an even keel of stability as we grow. 

There is a young couple moving in next door.  Even money says they'll re-sod the yard, plant a Japanese Maple, and move in plenty of Ikea furniture.  But my neighbor down the street - she's not going anywhere.  I'll bet you ten bucks.