Orleans Parish property owners are angry. And some are afraid that 2020 property tax assessments are going to push them out of the city once and for all.
Having the value of one’s home rise a little over four years might be welcomed and something for which one can prepare.
What residents don’t want to see and quite frankly cannot handle are high tax bills that result from seemingly inexplicable jumps in value of 25 percent, 50 percent, even 75 percent, 100 percent or more since the last time their property value was assessed.
Yet that is exactly what tens of thousands of New Orleanians have been dealing with since the 2020 tax bills were mailed.
There will be some homeowners who will go through the tedious appeals process and emerge having had some success in getting decreased tax bills. There are those who will figure out how to pay the higher property taxes somehow. Perhaps they will deplete a rainy day fund, withdraw money from an investment account or even borrow. Those scenarios are not ideal; but at least they will survive the higher assessment . . . this time.
However, as Morgan Clevenger of the Fairgrounds Triangle Neighborhood Association says, “it can’t just be about this time. If people can’t afford to live here, they will be forced to leave. We have to think about the next step.”
When Clevenger realized that her neighborhood was one of the hardest hit by the high 2020 property tax assessments, she and her neighbors began to organize and share their stories.
ACCOUNTABILITY
For many, the increased assessments have little rhyme or reason. Clevenger’s land value has gone from $21,000 to $135,000, she says. She says that a neighbor’s building value, last assessed at $167,000, is now assessed at $419,000.
Meanwhile, $150 million worth of property is listed as tax-exempt although their exemption agreements have expired. The absence of those properties from the tax rolls results in a $10.5 million revenue loss.
And the owners of about 40,000 properties in New Orleans, mostly located uptown, were not assessed at all. According to media reports, the assessor’s office did not get around to those properties before the deadline. The plan is to have them assessed by next year.
That, to us, is unacceptable.
The assessor has one job. With re-assessments taking place every four years, he had 48 months to do it.
And why would the uptown area, where many of the city’s wealthiest residents reside, be the section of town that his office doesn’t get to, while Black and working class residents in neighborhoods like Gentilly and New Orleans are faced with higher assessments that could put them at risk of losing their homes.
If performing a complete re-assessment of all parcels and businesses in Orleans Parish every four years is too big of a job, perhaps it is time to revisit the law that changed Orleans Parish’s seven-assessor system.
In November 2006, Louisiana voters passed a measure that reduced the number of assessors in Orleans Parish from seven to one.
Now in his third term, Orleans Parish Assessor Errol Williams became the city’s first unified assessor when he was elected in 2011.
Of course, since the mail-out of the 2020 tax bills, several Orleans Parish residents have wondered from where does the assessor draw his power. Feeling powerless in their battle to fight skyrocketing assessments they cannot afford, they angrily question to whom is the assessor accountable?
Like the mayor, he is directly and duly elected by the people of Orleans Parish. In short, he must answer to the voters at least every four years. His job, as is that of other assessors throughout the state, is to determine the fair market value of all property subject to taxation within the jurisdiction he is elected. The assessor’s office must submit a financial report annually to the state’s legislative auditor and is bound by state guidelines and laws in the manner in which he assesses property and operates his office, which is funded by property taxes.
Heavy Burdens
In New Orleans, 32 percent of homeowners are housing-cost burdened, meaning they spend at least 30 percent of their income on maintaining their home. About 14 percent are severely housing-cost burdened, spending at least 50 percent of their income on housing costs.
After struggling to maintain the demands of homeownership—mortgages, insurance premiums, taxes, and upkeep—they hardly have sufficient resources for food, transportation, clothes, medical care and other necessities. That means they probably have nothing left to pay substantially more in taxes.
“It’s called gentrification,” Thomas says. “Communities are changing. We have people coming in able to pay $400,000 or $500,000 for a home or a business; and it is pushing out our elderly, and low income residents, even our middle-class residents.”
Mary Adams Thomas, NOMAR
They also likely don’t have money for lawyers, appraisals or other expert help that would give them leverage in appealing their assessments.
A tax bill of just 25 percent higher than what low- or moderate-income homeowners have paid during the past four years may be enough to send them into delinquency. With property tax bills too high to afford, they could find themselves having to make tough decisions—stay and pay, sell and move, or risk losing their homes.
The main reason local homeowners—especially those who are housing-cost burdened—struggle to maintain their houses at all costs is because they know that the throughout this nation’s history, real estate ownership has been the key to generational wealth building.
But like racist government policies, redlining and unfair lending practices before, high tax assessments continue to threaten the promise of homeownership and generational wealth for Blacks in New Orleans and across America.
One Uptown resident who asked not to be named says she is not certain what her tax bill will ultimately look like as she left the assessor’s office one recent afternoon while the informal appeals process was still open. Last year, she paid $5,000. In order to pay the bill each year, she says she puts away money each month from her fixed income. There are two things of which she is certain: first, she can’t afford to pay much more; and second, she and fellow New Orleanians need some relief.
“We get a house, you pay off the mortgage. You pay insurance and taxes and that’s like paying a mortgage all over again. Everything is increasing except the salaries. They don’t increase. They stay the same. It doesn’t make sense.”
And while not every resident has seen their tax bill skyrocket as a result of a higher assessment, many face other challenges.
From Appalled to Appealing
Brenda W., who asked that only her first name and last initial be used, says issues with the family home that her parents left behind have been ongoing and pre-date the 2020 tax bills. She and two of her siblings are maintaining and slowly renovating the house. Annually, they each contribute $1500 a year to pay the property taxes on the house. The total property tax bill for the Carrollton area home is about $4500. And that’s too much, she says.
“It’s been extremely high,” she says. “And it’s going up.” Brenda is concerned that the assessed value of the house is inflated based of an external facelift, without consideration for the property’s overall condition.
“We have to make homeownership affordable. Do you think going up on property taxes is going to help? You cannot keep taxing us out of existence. We have to decide what kind of city we are going to be.”
Morgan Clevenger, Fairgrounds Triangle Neighborhood Association
“It looks beautiful on the outside, but it’s unfinished on the inside—the walls and floors are not done. I have gone to the assessor’s office with pictures of the inside, and it still did not go down.”
Brenda W. attended an appeals workshop hosted by the Fairgrounds Triangle Neighborhood Association (FTNA) on Aug. 16, hopeful that she could get information and guidance to get the taxes reduced. Appeal forms, cover letters, checklists, information on the appeal deadlines, as well as information on freezes were made available at the workshop.
The hands-on seminar was designed to help homeowners put together a formal appeal to contest their 2020 assessment. While the informal appeals process ended on Aug. 19, residents have until Aug. 22 to make a formal appeal.
New Orleans Metropolitan Association of Realtors (NOMAR) joined FTNA’s efforts. The organization provided realtors to perform a comparative market analysis or CMA for homeowners at the workshop.
A CMA, which can be a useful tool for residents making the formal appeals, is a process in which the size, true condition and age of an individual property are examined in order to get a more accurate value of the home, says NOMAR’s Mary Adams Thomas.
“You can have a brand new house built right next to one that is 60 years old, and the CMA is going to look at the true value of that 60-year-old house. Thomas says. “Another example is that many older homes were built with one bathroom. Newer homes have two or more. That alone can increase the value of a home by $25,000. The CMA is going to look at that and make the adjustment to the individual property.”
Royliene Johnson does not remember how much her 2019 tax bill was. But the Tremé resident says it was much lower than the $1800 bill she received this year. Johnson, who recently turned 65, says she attended the workshop to learn more about property tax relief options, such as freezes for seniors. She inherited her home from an aunt who made her promise to keep it in the family, and she intends to do just that, she says.
“I grew up there and I want to stay there,” says Johnson, who also expressed concerns about the homestead exemption not keeping up with higher property values.
Johnson is not only concerned about her current tax bill, but to her, it is unseemly that the $75,000 value of the state’s homestead exemption, established nearly 40 years ago in 1980, has remained unchanged since then.
“The homestead exemption has remained at $75,000 even though the prices of houses have steadily increased,” she says.
She believes it is something lawmakers should consider changing.
In order to change the homestead exemption, the state legislature would have to approve a bill that would send a measure before the voters.
The New Orleans Tribune could not find evidence of any recent legislative action to attempt to raise the homestead exemption; however, an attempt to lower the exemption to help local governments generate more revenue made its way to a House committee last April, but luckily failed.
If there is a bright side to the shockingly high 2020 assessments it is that homeowners are becoming more aware of the policies surrounding their property taxes and how they impact them.
And for those seeking to inform and mobilize residents, that is a good thing.
The Gentrification Factor
When asked what she believes has contributed to the swelling tax bills and escalated property values, Thomas, who serves as chairwoman of NOMAR’s Housing Opportunity Committee, gets right to it.
“It’s called gentrification,” Thomas says. “Communities are changing. We have people coming in able to pay $400,000 or $500,000 for a home or a business; and it is pushing out our elderly, and low income residents, even our middle-class residents.”
Thomas was on hand at the Aug. 16 workshop, helping attendees navigate the process.
“. . . get a house, you pay off the mortgage. You pay insurance and taxes and that’s like paying a mortgage all over again. Everything is increasing except the salaries. They don’t increase. They stay the same. It doesn’t make sense.”
Uptown New Orleans homeowner
“Our focus is keeping people in their houses and keeping housing affordable,” she says.
Gentrification occurs when richer new residents move into lower-income neighborhoods, purchase and renovate homes and open swank businesses. In doing so, they drive up property values, property taxes, and rent, making it difficult if not impossible for long-time, lower-income residents to maintain their homes in those neighborhoods.
Black residents in historic neighborhoods like Tremé, Marigny, the Seventh Ward, and Bywater have watched gentrification happen in their communities as they struggle to hold on to the property that their families have owned for generations.
A look at where property taxes have skyrocketed is proof. Many residents throughout neighborhoods like St. Roch, Marigny, Bywater, the Upper Ninth Ward, Lakeview, Mid City and Gentilly, as well, saw significant increases.
This proves that despite the propaganda disseminated by City Councilwoman Kristen Palmer, short-term rentals have had absolutely nothing to do with the displacement of residents or lack of affordable housing. In fact, the issue has only worsened because residents with property that could go on the long-term rental market will not be anxious to offer affordable rents as they pay higher taxes.
Gentilly resident Gail Herbert attended the workshop and says she sees the impact of gentrification in her neighborhood. While she was concerned about her higher tax bill, she is also wary of some of the changes she has witnessed, such as a newly renovated house near her own on the market for about $275,000.
“I mean they got it fixed up nice, but I can’t get that for my house,” Herbert says.
Of course, gentrification is not just happening in New Orleans. It is a national issue. There are some who say that gentrification causes more harm to renters and has little impact on homeowners. In other words, homeowners don’t move or are not pushed out by gentrification; at least that’s what so-called experts on the topic would have everyday folk to believe.
The reality is that gentrification can and will result in higher tax bills. And higher tax bills can and do result in tax delinquency for property owners unable to pay.
So perhaps they are right. Gentrification does not force longtime residents out of their neighborhoods; but not being able to afford to pay your property taxes in your newly gentrified neighborhood certainly does.
According to one study conducted in Philadelphia by researchers with the Federal Reserve, the rate of tax delinquency in gentrifying neighborhoods in that city increased by more than four (4) percent and by over five (5) percent in communities that were experiencing intense gentrification.
Still, this alone did not drive out homeowners in the Philadelphia neighborhoods examined in the study—a fact researchers attributed to a tax overhaul that provided safeguards to protect low-income homeowners in addition to the elderly and disabled
Unfortunately, low-income homeowners in Louisiana do not get similar relief. Last April, the Louisiana legislature pretended to discuss giving low-income homeowners a tax break. Instead, the one measure that the legislature approved for voter consideration on the Oct. 12 ballot is geared toward providing tax relief for low-density multi-family dwellings of 15 units or less in an effort to expand affordable housing opportunities in New Orleans, which could help renters, but would not provide tax-relief for low-income, single-family homeowners.
Driving It Up, And Driving Folk Out
Clevenger says she and her neighbors saw signs of gentrification soon after Hurricane Katrina.
She describes the Fairgrounds-Triangle neighborhood as predominately working-class, but economically diverse.
“All of a sudden people started seeing our neighborhood as a place they wanted to be. Lots started selling.”
With those purchased lots have come high-priced new construction of homes with values that surpassed many of the older houses in the neighborhood.
That is a big part of the problem, Clevenger says.
“Just because a couple of people come in here and build $500,000 homes does not mean that is how the rest of the neighbors are living. And the burden should not be put on the homeowners to prove that their assessment is wrong.”
To be sure, post-Katrina New Orleans was ground zero for gentrification. And while Hurricane Katrina might be classified as a natural disaster, there was nothing innate about the gentrification that has taken place here in the wake of the storm.
Far from organic, gentrification is often manufactured and forced.
The inequitable administration of the state’s Road Home program is one example of how gentrification gained its foothold here.
The state program that provided homeowners with grants to rebuild their houses offered substantially different amounts to homeowners in historically White neighborhoods when compared to the amounts offered to those that owned homes in New Orleans’ historically Black neighborhoods even if the homes where identical in size, age as well as in the damage incurred from the storm.
A 2008 analysis of Road Home grants by PolicyLink showed that homeowners in the Lower Ninth Ward faced average shortfalls of over $75,000—the difference between the available resources and the actual cost of rebuilding each home. At the same time, homeowners in Lakeview faced shortfalls of $44,000 per home. The data showed that as of 2008, as many as 35,000 Black homeowners were negatively affected by the disparity.
Today, the Lower Ninth Ward, which once could boast one of the highest rates of Black homeownership in the state, has lagged behind other areas of the city with regard to post-Katrina revitalization and residents returning.
It’s worth noting that property across the Lower Ninth Ward experienced widespread decreases in assessments for 2020–a signal, perhaps, that the area is being primed for a new crop of gentrifiers who can now snatch up the homes and land the Black residents could not return to.
Meanwhile, we find it curious that huge swaths of land in New Orleans East have more than doubled in assessed value, which, for us, indicates a move to push out property owners there with astronomical tax bills.
Even the razing of traditional public housing, which has been replaced by fewer, mixed-income units, has played a role in changing the face of New Orleans.
Noise ordinances and baseless nuisance complaints that push out long-time businesses that have been neighborhood staples for decades have all played a role in creating a “new” New Orleans where New Orleanians have no place.
But gentrification can’t work for New Orleans in the long-term. Somehow the city must find its way back to being a place that makes homeownership and renting in New Orleans affordable prospects for all.
“There isn’t a long list of New Yorkers willing to pay $400,000 or $500,000 to purchase our homes,” Clevenger says. “There is an end to that line. For one thing, they see the infrastructure problems; and they watch the national news. They see that every time it rains, we flood. We have to make homeownership affordable. Do you think going up on property taxes is going to help? You cannot keep taxing us out of existence. We have to decide what kind of city we are going to be.”
