In a piece on what cities are doing to promote neighborhood stability in the face of gentrification, the New York Times hailed the Homestead Exemption and LOOP as "the most comprehensive measures to safeguard longtime homeowners". Are they really that effective?
The New York Times is right that Philly's Homestead Exemption allows homeowners to deduct $30K from the taxable value of their homes (as long as the home is their primary residence). The Homestead Exemption, however, came right alongside the AVI, which dramatically raised taxes for many homeowners. It's true that property taxes were very out of whack, but it still came as a shock to homeowners who had been paying taxes on less than the actual value of their property for years. The Homestead Exemption was in many ways the spoonful of sugar required to make the AVI go down.
The other program mentioned, the Longtime Owner Occupant Program provides property tax relief for ten years to homeowners who have lived in their homes since July of 2003, and who fall below a certain income threshold. This is a program targeted to help homeowners stay in neighborhoods as they gentrify, and it ought to help those homeowners that qualify. However, there's another property tax discount program that speeds gentrification along, and LOOP might be conceived of as a counterbalance.
The savings that LOOP and the Homestead Exemption provide to homeowners are somewhat small in comparison to Philly's Ten Year Tax Abatement, which allows all improvements upon property (including entire homes built on land) to go untaxed for ten years. Debate has raged about the efficacy and value of this program, but there's no doubt that it speeds gentrification by offering developers powerful incentives to build in Philly.
· Cities Mobilize to Help Those Threatened by Gentrification [NYT]