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Tuesday, November 6, 2018 by Jack Craver

Property owners who forfeit landmark status will have to pay more

Owning a property that has been designated a historic landmark has its benefits and its drawbacks.

The city of Austin, Travis County and the Austin Independent School District all offer hefty property tax exemptions for landmark properties – with the expectation that the property owner will take certain measures to maintain the structure’s historic character. If you need a new door, you have to make sure the replacement door is of the same style as the original, which could be costly. The tax exemption is supposed to compensate owners for the additional expense of maintaining the home for the long-term.

It’s not uncommon for property owners to contest an attempt by the city to designate their property a landmark. The owner could be a developer hoping to demolish or redevelop the structure or simply a homeowner who doesn’t want to lose the right to make changes to his or her house.

However, there are relatively few instances of property owners requesting that their historic designation be removed. Under the current rules, if Council agrees to lift the designation, property owners are required to reimburse the city for the last three years of exemptions they enjoyed due to landmark status.

Last week, Council voted to increase the back taxes owed to five years for properties that relinquish their historic designation.

The measure was prompted by a resolution authored by Mayor Pro Tem Kathie Tovo last year. Tovo pushed for the ordinance change in response to the unauthorized demolition of a house that was designated as historic. The resolution asked city staff to consider increasing back taxes owed in such cases, as well as to explore collecting interest on the back taxes.

On Thursday, Tovo said she plans to introduce another measure that would allocate such back taxes for historic preservation projects, specifically to help pay for the hefty fees that the city charges people who are seeking to have their property designated as a landmark.

“But when it happens,” Tovo added, “I want to make sure we capture that value.”

Council Member Jimmy Flannigan said he would be reluctant to support earmarking certain revenues for certain programs, and worried that gaining funds for historic preservation via the loss of other historic properties might make it easier for future Councils to grant requests to remove historic designations.

Tovo assured her colleagues that she certainly does not want to incentivize the loss of historic structures and that she is reluctant ever to grant requests to remove landmark status.

Council Member Ora Houston said the city is at risk of losing historic properties, particularly in East Austin, if it doesn’t do more to identify properties for landmark status. It costs roughly $1,800 in fees for an individual to get a home classified as a landmark, according to Historic Preservation Officer Steve Sadowsky.

“We talk about the built environment and the loss of that in historic East Austin, but the reality is that many people can’t afford the $1,800 in fees and then do the research,” Houston said. “If we don’t have some way to help with that process, then many more homes are going to get destroyed. And there is not going to be any way to identify that people used to live there that loved this city as much as we do now.”

Photo by Kenneth C. Zirkel [CC BY-SA 3.0], from Wikimedia Commons.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

historic preservation: Official actions of a municipality such as the City of Austin taken to preserve structures with their jurisdiction. Preservation is often accompanied by a property tax exemption.

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