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Worried owners say historic homes may not be worth the price

Tuesday, April 26, 2011 by Kimberly Reeves

Some owners of properties deemed historic by the city are beginning to doubt whether Austin’s historic landmark ordinance and its rebates are worth the effort.

 

Proposed revisions to the city historic landmark ordinance will go to Council this week, a response to a spike in proposed historic landmark cases at the end of 2009. Such a decision, however, could mean new and tougher constraints, and fewer benefits, for hundreds of homeowners under the current abatement program.

 

Those changes smart for many existing landmark holders, especially those who consider themselves under siege, given the cost of maintaining properties that sought historic designation. For example, West Austin homeowner Tina Contros is beginning to question whether she should have given up the development rights on the Bull House in 2009 in exchange for what may end up being no more than an annual $2,000 tax break.

 

“We should look at this like any other development incentive to spur economic development because that’s what it is,” Contros said of criticism leveled at historic abatements. “I, as an owner, said I’m going to place my property into servitude, in exchange for a benefit, to preserve the city’s historic fabric. It’s essentially the same as any other development incentive offered by the city.”

 

Contros agreed her $6,000 package of tax breaks, now whittled down to far less with the loss the school district’s tax abatement, was important but hardly equal to the money she spent inside and outside her home in the last two years. At the bottom line, Contros said, was her choice to give up her development rights, a choice that eventually benefits the city’s historic neighborhoods.

 

Contros’ home is in Enfield. Architect John Mayfield’s Mans-Bendel House was one of the first landmarked in Hyde Park almost three decades ago. Mayfield considers adjustments to the existing landmark ordinance to be a change in the structured agreement between the city and property owner.

 

“If I’m not going to get a benefit, they can’t tell me what to do,” Mayfield said.

 

And these days, with recent stepped-up property inspections, the city is telling homeowners to do a lot more than the cost of a proposed $2,000 per-year annual tax break. Mayfield said he’s getting a distinct impression his property is not as desirable for city tax roll deductions as it has been in the past.

 

“I’ll just say it’s odd I got my letter from the county saying that there could be decisions that would affect my historic tax benefits on the same day I got my letter from the city saying they couldn’t recommend me for my abatement based upon various criteria,” Mayfield said.

 

In other words, homeowners who say they have spent tens of thousands of dollars to level foundations and match paint and preserve windows and doors are getting nasty letters that appear to say they haven’t done enough to earn their abatement. At some point, some may choose to abandon the abatement and possibly even the historic landmark program.

 

One of the key issues at last week’s special-called meeting of the Historic Landmark Commission to consider recommendations on revising the landmark ordinance was whether all existing and future landmarks would be capped at the proposed annual tax abatement of $2,000 per year or whether existing landmarks, especially homesteads, should be grandfathered from potential ordinance changes.

 

Representatives of the Heritage Society of Austin told commissioners they supported a variety of recommended changes that would strengthen the faith Council had in the program: better training of commissioners to recognize proper landmark criteria; an annual inspection, possibly underwritten by a new owner-paid fee, to maintain landmark compliance; and the use of funds to support incentives to rehabilitate structures.

 

The Heritage Society wanted abatement caps tied to an average exemption in the program. That would be a tax exemption of $2,591 a year. The recommendation of Historic Preservation Officer Steve Sadowsky was an exemption of no more than $2,000 per year, starting in 2013. A cap of $2,250 would be applied to landmarks over 100 years old.

 

And a revolving low-interest loan program would be created to rehabilitate the structures of low-income owners, as long as the owner agreed to maintain ownership.

 

However, the Texas Constitution prohibits cities from making loans for any purpose. In 1985, Austin voters approved issuance of $66 million in bonds to finance energy conservation loans. The Texas Supreme Court eventually ruled that such lending was unconstitutional. But no one mentioned that fact at the meeting.

 

Commissioners Patti Hansen and Megan Kleon
recommended a gentler step-down approach to existing tax abatements. The city cutting off the tax abatement so pre-emptively would be like “breaking a covenant,” Myers said. The specifics of how that might occur appeared to be less clear. The commission agreed, in general, to a 5 to 10 year recommendation.

 

The Historic Landmark Commission appeared to be in general agreement on the document presented, but no formal vote was taken. City staff is expected to brief Council on the item this week.

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