Mayor And Council Proposing Property Tax Changes

Mayor Greg Fischer and several Metro Council members are proposing changes to the city’s property tax moratorium program that would enhance anti-displacement efforts in neighborhoods experiencing rapid investment.

An amendment filed today would make the Property Assessment and Reassessment Moratorium Program more accessible to homeowners in west Louisville, Smoketown and Shelby Park. The goal is to avoid the displacement that can occur when a neighborhood sees such quick investment that property values rise markedly, which in turn can raise property taxes beyond what current residents can afford and put pressure on existing homeowners to sell.

The moratorium program will work in concert with other anti-displacement measures such as the recently launched Russell Homeowner Repair Program, which provides funding to help Russell homeowners make critical home repairs.

Established in 1983, the moratorium program encourages residential and commercial property owners to make improvements to properties that are at least 25 years old, and in return, their Metro Government and Urban Services District taxes are frozen for five years, even if their property values rise.

The proposed amendment would lower the amount of money that homeowners in west Louisville, Smoketown and Shelby Park would have to spend on such improvements to qualify for a tax moratorium. Under the amendment, homeowners would qualify if their improvement costs equal at least 5 percent of the value of the improvements, based on the latest assessment made by the Jefferson County PVA. For example, the average single-family home in Russell is valued at $36,717, meaning the owner would need to spend at least $1,836 on upgrades and improvements to qualify.

Commercial and residential properties located outside of west Louisville, Smoketown and Shelby Park may also still be eligible for the tax moratorium program.

Those properties are eligible if the improvement costs equal at least 10 percent of the value of the improvements and if the property is in a census tract where at least 50 percent of household incomes are less than 60 percent of the area median income.

The amendment to the moratorium program is possible because of Section 172B of the state Constitution, which governs the ability of local governments to offer a property tax moratorium and limits this action to qualifying repair activity and no more than five years.

Measure is part of a broader effort

Mayor Fischer said the proposed changes – including a waiver of the program’s $40 administrative fee for qualifying low-income owners – represent just one piece of a broader effort by Louisville Metro and its partners to stave off displacement and build wealth among longtime residents.

“We are seeing significant reinvestment in some of these neighborhoods, and we want to be sure that the people who live in these communities, the people who are the soul of these communities, can stay and grow with these communities,” he said.

Colleen Younger, Jefferson County Property Valuation Administrator, agreed.

“New investment is good and necessary to stabilize neighborhoods, but an important piece must be to offer protection to current, longtime homeowners who are the heart and soul of these urban neighborhoods and the households that are the most financially fragile and at risk,” she said. “Property values in west Louisville neighborhoods rose for the first time in eight years during the 2019 assessment, and this program will offer some protection as property taxes rise due to fast growth in the target areas.”

The Smoketown and Shelby Park neighborhoods will be reassessed this year. Property owners can challenge their assessment through Jefferson County PVA’s “You have a right to appeal” program, where residents can submit photos and documentation through mail, in person or online. For more information about the program, call (502) 574-6380 or visit jeffersonpva.ky.gov.

Council President David James, who is among five sponsors of the amendment, said, “I’m happy to be a sponsor of this ordinance as we try to fight against gentrification and protect our citizens and neighborhoods.” (See other Council comments in support of the amendment below.)

Other anti-displacement efforts

Additional anti-displacement efforts in Louisville include the Russell Homeowner Repair Program, the Emergency Repair Program, the citywide Down Payment Assistance Program, and additional funding for Russell homebuyers to make repairs.

The Russell Homeowner Repair Program, which launched in 2019, assists existing Russell homeowners in building equity by granting up to $25,000 per unit to help owner-occupants make critical improvements to their homes, using $2.3 million in CBDG funds. The city’s Office of Housing, which administers the CBDG funds, has received more than 90 applications for assistance and is still accepting applications for the program. For more information, visit https://louisvilleky.gov/government/housing/russell-homeownership-incentive-program.

Through its Down Payment Assistance Program, Louisville Metro Government’s Office of Housing gives qualified homebuyers up to 20 percent of the purchase price to help them buy homes in neighborhoods throughout Jefferson County. In addition, the city will grant up to $35,000 to qualified residents buying a home in Russell, in an effort to promote homeownership among Russell residents.

The city also is continuing to work with key partner organizations and residents on additional measures aimed at advancing its anti-displacement work, including consideration of Renter Equity Models to help renters build wealth, and the possible establishment of a Community Land Trust to create permanent affordable homeownership opportunities, among other measures.

Louisville Metro Government’s 2020 legislative priorities include seeking more tools to address blighted, deteriorated, and vacant properties and pursuing funding and policy solutions to meet the growing demands for affordable housing, including a state Low-Income Housing Tax Credit program.