Longtime Houston Heights resident Ivan Reyna tells Fox 26 reporter Isiah Carey that his family can no longer afford the 3-bedroom 1920 bungalow on Arlington St. his father bought for $18,000 — 37 years ago.
Across from the Reynas are two million dollar homes. Just down the block is another house that sold for $600,000. And that’s the problem. Reyna says as a result of the revitalization of the Heights he can’t afford his father’s dream any more. Ivan says, “the taxes have gone up 100% since they started building the mansions.”
HCAD records show the appraised value on the home has increased almost 40 percent over the last five years alone.
Ivan says they’re hoping to get at least $250,000 for their aging home as is. He knows potential buyers are not interested in the small structure to live in. Many of the newcomers want to shop around, buy the land, and tear down the structure.
Reyna says he’s alright with that. He, his sister, and older brother are hoping to make enough off the sale to move down to the Valley where Papa is. He says there they can get 5 acres of land for a cool $90,000.
Photo: Isiah Carey
…we have high property taxes here. it’s sort of ironic, but one day my neighborhood will be so nice i won’t be able to afford to live there!
I still don’t understand why this is such a bad situation. High property taxes mean higher land value. I can only hope this becomes my “problem” in the future.
So the house (lot) appreciates 1289% over the course of 37 years? That seems like a pretty good return on investment (7% CAGR).
let’s not forget that texans have voted to have high property taxes.
i think the story is incorrectly titled though as the revitalization of the heights is what’s allowing these people to live the american dream: selling your house to someone with money to burn.
It’s a problem when someone wants to continue to live in the same house/neighborhood he/she has lived in for decades and no longer has the ability to do so because the land under which the house sits is “worth” far more than the structure that holds an individual’s life.
I know we would all like to believe that we will be flexible and daring in our golden years; able to leave everything behind at a moment’s notice and relocate to wherever our money can take us, but many residents simply want the ability to stay where they are comfortable until they are no longer physically able to live there – not until they are priced out by taxes.
The comment has been made in the past that the elderly residents of Wilshire Village should not have been taken aback by the order to move out since they didn’t own the property. Owning one’s property isn’t exactly failsafe either unless one has unlimited funds.
Hey Swampo,
thanks for sharing the story – glad you were able to put it on your page. I felt bad for the guy because they don’t want to move even though they stand to make a killing when they sell the house…
IC
Hey Swamp,
thanks for sharing the story – glad you were able to put it on your page. I felt bad for the guy because they don’t want to move even though they stand to make a killing when they sell the house…
IC
The flip side to Hellsing’s comment though is look at California. My casual understanding of their budget problems is that in response to concerns like his (hers), is that the state put a cap on property tax appraisals. so there’s no money for things like schools. One solution is to fund schools out of something other than property taxes but that seems unlikely. Also (in my area of Spring Branch) the property values are going up precisely because the school district is good and more people want to live there.
It’s called gentrification by taxation and quite effective in getting rid of those pesky poor people who are ruining the “new” neighborhood. Something Houston Renaissance should have realized would have worked better than trying to buy land cheap and flip it expensive. Although of course they weren’t too successful with that.
But it’s not just the poor or the “second generation” that inherited the house. Many seemingly successful people bought in West U 15 -20 years ago and can no longer keep up with the taxes on their houses because their income didn’t go up along with the value of their houses.
As for California, well, until the recent insanity the nice thing about California was you could save, buy a house, and plan to live in it when you retired and not worry about losing it to the taxman. Something you do have to worry about in Texas.
I don’t buy it. This property has the over 65 exemption so they pay a fraction of the taxes of their neighbors. The report doesn’t state what the actual taxes are but I’m sure that the yearly property taxes are small compared to what it would cost to rent in the area. I suspect that they could continue to live here if they really wanted to.
I will save my sympathy for those who don’t have such a good retirement investment.
For $90,000 one should be able to buy your own colonia. Heck, I did.
I do believe/understand that people are being “priced out of the Heights” because they are expecting to coast along on the old homestead: The mortgage is paid, so, it’s all gravy right?
Nope, this is economics and so this is a class issue: The “landed” find themselves in the nouveau riche’s district. Say wha’?
All(previous)bets are off and it’s a new day.
(I can be smug because I live in an area where I’ll welcome the day the checkbooks come calling.)
If only we could all have this “problem”.
Long story short. You NEVER own your land, you just rent it from the government. Don’t believe me? Don’t pay your yearly rent (taxes) and see how that works out for you. Today it is these people. Tomorrow it could be any one of us (even Landed Gent)…
The over-65 exemption does reduce the taxes but in realty, the taxes still go up each year while income doesn’t. Many defer the taxes but that only works when values keep rising each year. If they start falling, the deferred taxes can add up very quickly and leave little equity.
California has the better system. They just have taxing districts along with a legislature that can’t live within their means like everyone else.
I think freezing the valuation once the homestead owner turns 65 would be the fair way to address the problem but of course the developers wouldn’t like that because then the homestead owner might stay put for another 20 years and deny them the right to build 2-4 townhomes. And of course in areas like Fourth Ward make it impossible to “gentrify by taxation.”
As for deferring taxes apparently HCAD is allowing everyone to now. What else are they doing to do – auction off half of Harris County at the courhouse?
Nate,
You are absolutely correct.
Anyone not familiar with land ownership needs to look up the terms “fee simple” and “allodial title”. Basically, you “own” your property but with some encumbrances, one of which is taxation.
Why can’t we just own our property without encumbrance? You can, but you have to build your own army. Good luck with that!
You can, but you have to build your own army. Good luck with that!
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And then you would have to tax yourself to pay for your army. There is nothing wrong with taxation for the common good. The problem in this country is it is no longer for the common good. For the most part the average taxpayer is subsidizing the very poor and the very rich. And the politicians and their buddies.
A friend has a bungalow a few blocks away and his taxes on a $240k appraisal with only his homestead exemption are $4600.00 If these folks inherited the house and have an over 65 exemption they are looking at what $300 month in taxes–but no house payment?Seems like a mighty sweet deal to me. But wait just a second……I just looked up my 90 year old neighbors place–on the tax rolls at 128k. Her taxes?
$228 per year!!! Sounds like the a trumped up story for the news.
If these folks inherited the house and have an over 65 exemption they are looking at what $300 month in taxes–but no house payment?Seems like a mighty sweet deal to me.
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I know this will come as a shock but for many that $300 added to the utilities pretty much takes up their income. Which is why they live in the houses they have always lived in. Bought by their parents and grandparents 25,50,75 years ago. Maybe you would prefer they go live under a bridge?
Of course their property taxes would be lower if we used the California model and for all intents and purposes locked the taxes at time of purchase. Of course their income would also be 6-9% lower because they would be paying state income taxes. Besides think of all the people who would be out of a job if we didn’t need the infrastructure necessary to appraise and then fight the appraisal of every property every year ;)
Everyone calling this a “good problem to have” should stop and consider that the market value of your house is not a check you can write out to pay your taxes.
This is the problem with relying on property taxes so heavily – they are inherently regressive. So, the less income you have, the higher effective tax rate you pay if you own a house that increases in value.
It’s a stupid system designed to screw people who do crazy things like retire or buy a house in a stable neighborhood where prices go up.
It’s not the only way to do things. When I lived in DC, my property taxes were under $500 a year. (I also paid a hefty local income tax, of course, and my overall tax burden was much higher than here. News flash: even with our high property taxes, the overall tax burden in Houston for middle class people here is extremely low.)
I’m not going to pretend to know this family’s situation. But the fact is, when we depend on a regressive tax like property taxes so heavily, it makes life a whole lot harder for people whose income drops. In a time of high unemployment that is unlikely to end soon, some of you may be experiencing that a lot sooner than you thought. You’re a lot more likely to lose your home when you’re faced with large property tax bills (whereas a system that depends more on income or consumption taxes effectively gives you tax relief while you don’t have an income).
While some of us do well under this system (including me) for a good part of our lives, it does have an impact on neighborhood stability; when retired or less affluent residents can’t keep up with the taxes, it means that people get forced out of neighborhoods a lot faster.
Finally: smug contempt of the fortunate toward the less fortunate is really, really unattractive.
The Gubment has to pay for those soapbox derby parks and tiny tricycle cities somehow.
Finally: smug contempt of the fortunate toward the less fortunate is really, really unattractive.
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They think they are better than everyone else and above everyone else and of course it could NEVER happen to them because of course they’re smarter than everyone else.
They’re really just more obnoxious than everyone else.
From John (yet another):
Sorry, but these people are not the “unfortunate.” Most of us would love to own a home we have never paid a mortgage on, left to us by Pappy who moved back down to the Valley. So John, don’t preach, just lighten up.
And 37 years in the Heights hardly qualifies as a long-term resident. I can remember when the only people living in the Heights were old Germans.
Now, get off my lawn!!
Taxes on this property run $1600 annually with the over 65 exemptions. In lieu of a house payment or rent elsewhere, it seems mighty cheap even with utilities but they may lose the homestead if Papa has moved. Or they may have other expenses, debts etc….
The news story of course tries to tug at our heart strings with the urban gentrification angle. The fact is, these folks will pocket more money because of what happened on their block. We see houses just like that all over Houston in less “desireable” areas that would go for a third to half of what they may get for the property. Seems like they aren’t exactly being forced out of their home if the can move to the Valley buy a property free and clear and pocket over $100k.
And no, Matt Mystery, I would not prefer that they sleep under a bridge. I would prefer for you to crawl back under your rock.
And no, Matt Mystery, I would not prefer that they sleep under a bridge. I would prefer for you to crawl back under your rock.
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That will never happen simply because I don’t have a rock to crawl back under.
Quite a few people are taken advantage of when they become delinquent in their taxes. The vultures come a calling offering to rescue them from the taxman. The house is worth $250,000, they owe $10,000 for taxes, the vultures, such nice people, will give them $25,000 which will cover the taxes and leave them $15,000. Quite legal, by the way.
In Fourth Ward, in the beginning before the Attorney General’s Office stepped in, Houston Renaissance, composed of some of our city’s finest citizens, offered the poor African-Americans $6 a square foot for their property. And added a little incentive. The possibility of losing their property to condemnation and not even getting the $6.
Perfectly legal. But stank to high heaven.
When they began to flip the land, they were selling it for $16 a square foot. So much for non-profit community development organizations committed to revitalization. According to one former city councilmember, they spent over $24.5 million in public funds to buy $6.5 million in land. No one ever did see a final, complete audit. So no one really knows where the other $18 million went. Probably under the table. Some of it to the various politicians who turned their head to it.
Or maybe the spent the $18 million on a demolition derby. Including some truly historic homes containing some truly rare architectural treatments including in one case rare pine used for flooring.
While our “historic preservationists” turned their heads as well.
Regardless of anything else, this is this family’s home which has been in their family for 37 years. Texas used to be the one state that held property rights and homestead rights above all other rights. No more.
What the developers wanted, the politicians gave them.
And at some point when the developers want Sixth Ward, they will get that as well despite the supposed historic preservation protection.
And when they start screaming about it all, I will ask them all where they were when the developers were doing the same thing in Fourth Ward.
Preaching? I’m not the one pretending to know the owner’s financial situation. I’m not the one telling the owner to shut up and stop complaining. I’m not the one telling the owner that having to leave your home is a GOOD thing. I’m not the one criticizing the owner for inheriting property (funny, last time I checked, the right to pass your property on to your heirs was something we valued).
Smug, smug, smug. Not pretty.
Sorry other John,
I got you confused with another poster. Lo siento.
You’re a lot more likely to lose your home when you’re faced with large property tax bills (whereas a system that depends more on income or consumption taxes effectively gives you tax relief while you don’t have an income).
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That is one of the advantages of acquisition value although of late in Los Angeles it has become a disadvantage in some areas since the acquisition value in some areas is prohibitive for most people which may present some problems when and if the “family homestead” is sold finally.
There are quite a few living in homes that are appraised far below their market value, in some cases as low as 5% of the market value from what I’ve been told, and even in Los Angeles there are a limited number of buyers for $1, 5 and 10 million homes. And then you have the people who bought the $25 million home for $12.5 million in Holmby Hills whose neighbor of course bought their home for $25 million and wants to know why their house is not adjusted and never will be. What goes up doesn’t always go down. Not in Los Angeles anyway. There is some adjustment going on in Los Angeles. But only in some areas where there have been sufficient sales to justify the adjustment. The taxman doesn’t willingly give up the tax dollars.
But what goes up does come down here. And in some areas, that spells trouble for people who look at their home as their retirement annuity as well as for HCAD.
This family will do alright by selling. But not all do. And there is this element of “gentrification by taxation” that perhaps not even Isiah Carey realizes is there in some of the best as well as some of the worst areas. Happens in West U just as much as the Wards.
The real problem is we have government that looks upon the homeowner in Texas as an ATM that has unlimited funds available for withdrawal.
And that of course keeps the vultures well-fed. At some point, however, some of these “better neighborhoods” will first become too expensive for most. And then see massive devaluation when people have to sell because of taxes.
Of course we have to have taxes. Otherwise we would be using well water and septic tanks, driving on dirt roads, and shooting each other in disputes rather than calling the police.
There should, however, be a better way than taxing people to death. And out of their homes.
Matt Mystery – the best system I’ve personally experience was when I lived in Massachusetts in the late 80s/mid 90s (it may have changed). (And before everyone whines about “Taxachusetts,” note that as a percentage of per capital income, the tax burden in Mass. falls right around the middle of the country; I’ve paid more in some places (DC) and less in others (VA and TX). But I’m talking about structure here, not dollar amounts.
The income tax in Mass. when I lived there was 5% (moderate as state income taxes go). The biggest item in the state budget was “local aid,” which basically was payments from the state to local governments that covered the kinds of basic services that we pay for out of our property taxes here.
To some degree this was needed because Mass. doesn’t have cities that annex surrounding areas or any meaningful county government; so a place like Boston requires some way to collect money regionally to pay for infrastructure that supports the region. (If our city boundaries were arranged like those in Mass., Houston city limits would be somwhere between 610 and BW8 and the much of what’s now Houston would be separate jurisdictions.
It was a striking difference from the neighborhing state where I grew up, Connecticut, which when I was a kid had no income tax and depended heavily of property taxes. The result of that was that the cities got caught in spiral of high infrastructure costs and declining tax bases, leading to higher property taxes, which drove out property owners, which led to still higher tax rates to try to get enough revenue from what remained (with declining property values), etc. The result was that the cities basically declined shockingly; it’s one of the wealthiest states in the US and its cities are just disasters of poverty and decay. Bridgeport, where I grew up & the largest city in the state, was bankrupt, crime-ridden, and most businesses had just moved out; at one point when I was in college there was not a single non-adult bookstore or movie theater in the whole city. A downtown mall was completely empty. Public parks and beaches that we used to visit when I was a kid became open-air drug markets. A mile away, outside city limits, were some of the wealthiest communities in America.
I think we’d be better with a very broad, very simple consumption tax supplying a much greater portion of the revenue. Or a simple income tax, which is far less regressive and doesn’t leave you with tax rates warping property values, as happened in CT.
I’m not complaining about the tax burden in Texas; moving here is like getting a raise because we pay so little, especially by comparison to other major cities. We do seem to have chosen the most painful possible way to raise tax revenue, however.
I never understood why Texans were so proud of not having an income tax. At least state tax was a deduction on the federal return AND it went down when your income went down.
My income in 2009 was reduced but my property tax is the only tax that didn’t decline.
In the end, you will be taxed and, when it comes to local services (like most things) you get what you pay for.
I hate to play devil’s advocate, but isn’t it illegal to claim the “over 65 exemption” if the person who is over 65 lives in the valley? I’m just sayin.
It is a no no to claim the exemption but the article indicated that Papa moved this year so they may be selling because they will lose the exemption.
well it’s simple, really. a higher property value isn’t a fluid asset ’till you sell the place-that’s when you pull any money out. otherwise, you need to pay more and more every year for the same home as the value goes up. so if you’re income isn’t also increasing, you may be at a point where you get priced out of your own home. if you look aroung the city-even in an affluent area like river oaks-you see homes where the owners are obviously ‘house poor’ due to the huge taxes they are required to make.
Has anyone considered the possibility that these folks may have taken out home equity loans on this house to benefit from its rise in value, and now they can no longer afford the payments? Would be interesting to know…
I’m torn and saddened by the changes in my neighborhood in recent years. i was raised here by my grandmother, and i am now raising my daughter here. There is no better place to do so… the memories of the people i knew and grew up with here are always pleasant. the trees, the safe streets, the warmness of our community. But in the past ten years i have seen this neighborhood lose its originality, and has been in a way commercialized. and the swarms of people wanting to make money and take advantage of the good the heights has to offer have rolled in. They buy homes.. and tear them down. I know this happens everywhere, and its a part of life. but when there is something special… you should always try to preserve it or at least not take advantage of it. for example, in most cases when they tear down these homes, they build two in its place. simple addition two homes twice the profit… and i need not to mention they are overly priced, and made of the cheapest wood compared to our houses. buyers are basically paying 5-800,000 for granite kitchens and 1-2 extra bedrooms, losing their land for a normal yard and view out windows, you have no yard in these lots, you can open your window and knock on your neighbors window to ask for sugar, thats how close they are.
I can not put full blame on anyone.. and those who havent lived here before or lived here in the “good ol days” can never understand what is being lost. its not just the house structures themselves… but home. this word brings feeling, love, warmth, a sense of belonging.
Most people who lived here before do not live here anymore.. for many reasons. some have wished to make a home elsewhere, others just could not afford it any more, others have aged an their sons and daughters have taken them, or they have passed away.. and the children have chosen to sell.
the original heights.. Most homes are small and quaint. Home… No over-sized rooms, or extravagant kitchens and baths. it was just enough for a close nit family to share. the streets full of trees, the yards were shared. kids could go and play freely through out the neighborhood in other peoples lawns, except for the occasional grouchy old man who yelled out his screachy screen door in the porch, but when it came for ice cream money earning time for kids, he happily paid us change to clean his yard.
My wish to continue sharing this experience with my daughter… are slowly vanishing away. We will lose our home and our community. Soon i will be forced out out of my house.. my neighborhood.. my treasured home. When you are about lose the only thing you know.. and know that where you are forced to go next is nothing like what you know, its a terrifying thing.
many reasons combined have made this outcome.. from not preserving our houses in heights, home builders trying to make extra money, rising taxes, old debt, accidental injury, uneducated lower class family, low ss fixed income, sudden unemployment, and the high influx of the rich, and time. i just didnt have enough time to change my family and i circumstances fast enough compared to the rapid growth our our community. Although i still don’t lose hope… and i fight every day.. i know the end is near.
For those who only have dollar signs in your eyes.. know this,
no, we will not make a killing off of the sale
no, we do not want to lose our home
yes, the new homes built here have raised property taxes significantly
yes, the chances of selling your home as is to another family are low
yes, home builders will buy at lower rate
yes, if able to save our home we would
yes, the poor have been forced out
yes, most have been taken advantage of
no, they are not moving to better places
no, they are not gaining the american dream their parents and/or grandparents had tried so hard to leave them.. they are losing it.
no, we don’t want your pity
Although i wish i could open peoples eyes to the great lose and unneeded “rejuvenation” the heights and its original owners are experiencing.. its something that cannot be done. Most people are now quick to speculate, judge, take advantage, disregard, and it seems as though they are at times unsympathetic. which i know not true… because when given light, one can then see.
my next wish.. is for those who are still fighting to keep our homes..
i know for most the fight is hard.. and we are at the losing end.. but don’t lose hope.
so happy we don’t have to pay property taxes after the first property (only after second, third, etc)
Dear Torn–
Fought that battle last decade and understand your heartbreak. Got a couple new laws and enough publicity to get it on the City’s radar, so it was not time wasted, but in the end, we did cash out just a few months ago.
I knew it was a neighborhood on the upswing and had always seen my house as an investment. Used to tell friends “This IS my 401k”, thus I invested in the granite countertops and made many improvments and it paid off handsomly. No regrets.
Glad I lived there, glad to be gone.
Way to pile on, lol. That was pretty funny.