Urban

Cities Give Tax Breaks to Those Threatened by Gentrification

March 4, 2014

Cities that have worked for years to attract young professionals who might have once moved to the suburbs are now experimenting with ways to protect a group long deemed expendable — working- and lower-middle class homeowners threatened by gentrification.

The initiatives, planned or underway in Boston, Philadelphia, Washington, Pittsburgh and other cities, are centered on reducing or freezing property taxes for such homeowners in an effort to promote neighborhood stability, preserve character and provide a dividend of sorts to those who have stayed through years of high crime, population loss and declining property values, officials say.

Newcomers, whose vitality is critical to cities, are hardly being turned away. But officials say a balance is needed, given the attention and government funding being spent to draw young professionals — from tax breaks for luxury condominium buildings to new bike lanes, dog parks and athletic fields.

“We feel the people who toughed it out should be rewarded,” said Darrell L. Clarke, president of the Philadelphia City Council, which last year approved legislation to limit property tax increases for longtime residents. “And we feel it is incumbent upon us to protect them.”

In doing so, cities are turning urban redevelopment policy on its head and shunning millions in property tax revenue that could be used to restore municipal services that were trimmed during the recession because of budget cuts, including rehiring police officers.

A decision to reduce property taxes can be risky because such levies account for at least 50 percent of operating budgets in most American cities and sometimes provide as much as 80 percent of a city’s revenue.

But even Detroit, where a declining tax base has been at the core of the bankrupt city’s troubles, recently announced plans to cut property tax rates.

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