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City staff to suggest tougher historic preservation exemption standards

Wednesday, July 6, 2011 by Michael Kanin

Changes appear to be in store for the way that the city grants historic zoning.


Staff with the City of Austin’s Planning and Review Department will suggest that the City Council amend its historic preservation ordinance to bring tougher standards for the justification of the tax break associated with home preservation. The move is expected to come in early August.


In return, the plaintiffs in a law suit brought against the city have delayed a court hearing on a temporary injunction that would keep Austin officials from granting tax exemptions associated with their historic preservation program. Should the council fail to approve staff’s recommendation, their attorney, Jim George, has indicated that his action will move forward.


Should the changes be affected, they could impact both current and future historic home owners.


George told In Fact Daily that his group would “pass that hearing on the condition that the staff make a recommendation to the city … that the ordinance conform” to state law. “If they don’t do it,” he continued, “we will keep going.”


The law suit contends that Austin’s current historic preservation ordinance is “in clear conflict with state law.”


“The only authority the City of Austin has to grant a historic property tax exemption comes from the Texas Tax Code,” the plaintiffs write. They continue on to suggest that the city’s existing rules make “no mention of any requirement that an exemption only be granted if the property is ‘in need of tax relief to encourage its preservation.’”


The changes to Austin’s historic regulations would bring that tougher need requirement into the city code. In so doing, city officials would imply that the former regulations didn’t meet state standards.


It remains unclear whether current historic home owners would have to re-justify their status. Still, Jerry Rusthoven from the city’s Planning and Development Review department told In Fact Daily that historically-zoned properties don’t automatically qualify for a tax exemption. “Every year, anyone who seeks the tax exemption has to apply for it,” he said.


Rusthoven said that he couldn’t comment on anything that had to do with the lawsuit.


The tax exemption associated with historic zoning is a hotly contested matter. The Austin Independent School District revoked the benefit in September. The Travis County Commissioners’ Court commissioned a study which suggests that the exemption should be drastically altered in a general rebalancing of the county’s tax exemptions.


The Austin American-Statesman reported that the city lost $4.2 million to historic exemptions in 2009. Travis County officials said that the program costs them $1.2 million in revenue.

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