March 02, 2007
Tax breaks for historic buildings moves forward

Following up on an action item first raised in August, there is now a proposal to grant a full property tax waiver to buildings identified as historic as a means of helping to preserve them.

The new tax incentive, which excludes single-family residences but could affect dozens of other buildings in and around the city's core, is among several proposals that could foster preservation and maintenance of historically significant structures, officials say.

The plans also call for a reduction in the percentage of neighborhood support required to designate a historic district, and other revisions to city rules that the City Council will consider soon.

While preservationists might prefer a tougher law banning any demolition of historic landmarks, the compromise could be more palatable to developers and property rights advocates who argue the city shouldn't dictate how owners manage their structures.

There are no quotes in the story from any potential opponents of this proposal, so it's not clear yet how this will play with them. Folks who favor preservation are mostly but not completely happy with this.

"I think it's extremely significant," said Barrie Scardino, the executive director of the American Institute of Architects' Houston chapter.

In addition to the specific policy changes, Scardino said, the tax abatements and other measures will send a message that the city is serious about preserving its history.

City Controller Annise Parker, who headed a committee that worked on historic preservation when she served on the council, said the omission of residences is a serious weakness in the proposal.

"The residential properties are under tremendous assault from new development," Parker said.

Agreed, but one step at a time. Other measures, like the prevailing lot size and setback ordinances, or the reduced requirement for designating a historic district, may be a better tool for residential areas anyway.

Buildings that meet the criteria would be eligible for a full, permanent exemption from city property taxes, and officials said the city will ask Harris County to provide a tax exemption as well. Owners would have to refund any tax savings if they altered the building's facade.


It wasn't clear Wednesday whether county officials might go along with the tax idea.

County Commissioner Steve Radack said the county relies so heavily on property taxes for revenue that it rarely, if ever, can grant 100 percent exemptions.

"Unlike the city, the county doesn't have the luxury of bringing in hundreds of millions of dollars a year on a sales tax," Radack said.

The county has in the past offered temporary and limited tax incentives for historic structures.

While I appreciate Commissioner Radack's concern, let's put this in perspective. The city's property tax rate is 0.645, and the county's is 0.40239, or about 40% less. If the city grants full exemptions to all the buildings listed, that would cost Houston $1.5 million in tax revenue as noted. In turn, that would be $936,000 for Harris County. While that's not a trivial amount of money, I seriously doubt it will break their budget, and I daresay future growth will be slow, like maybe a new building added a year. Obviously, the county's concerns should be addressed, but there should be plenty of room for a deal here.

Posted by Charles Kuffner on March 02, 2007 to Elsewhere in Houston | TrackBack