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Our city’s Rail Trail could lead to property tax rises. What can Atlanta’s much bigger trail project teach us about how to protect low-income homeowners?

  • We went there to find out more.

  • New Mexico homeowners are in a much safer position, but gaps remain 

  • A choice between a comprehensive-but-difficult fix and easier patchwork solutions

Beside Atlanta’s BeltLine Trail, a sign recruiting “legacy residents” to a program designed to keep them right where they are.

ATLANTA — They don’t make neighborhoods like West End anymore.

One of the city’s first “streetcar suburbs,” it still has the sort of big leafy trees and front porches attached to single-family homes that you would expect, though parcels are smaller than their modern counterparts. Originally built up in the 1830s, it is certainly a historic place, but by no means wealthy. One home that has clearly been renovated recently may sit next to another that is boarded up with signs posted to keep people away. The zip code’s poverty rate is 25 percent – 12 points above the national figure and roughly what you get when you average the rates from 87102 and 87104.

But these days, some long-time property owners face a new financial problem: Rapidly rising land and home values make them so rich on paper that they might not be able to afford to live there anymore.

Spend a few minutes reviewing real estate records and you’ll quickly see why. The owners of the three-bedroom house at 882 White Street, for example, paid just under $36 in property taxes in 2014. Seven years later, the bill came to $3,789. The house has been sold twice in the last 13 years: In early 2008, it went for $66,500. In 2019, it went for $350,000. Zillow thinks it is now worth $100,000 more than that.

One reason for all this is Atlanta’s white-hot real estate market, where the median listing price for a home is fast approaching $400,000. But another reason is that just a few blocks away, Atlanta has been developing the same sort of urban trail that Albuquerque broke ground on just a few months ago (DAN, 11/17/21).

West End borders the BeltLine, a 22-mile loop dotted with parks, art installations, and businesses set up to serve the people recreating or commuting there. In numerous repurposed warehouses made of red brick, the new tenants are heartily embracing the industrial-chic vibe, and outdoor seating at any number of breweries and coffee shops is plentiful.

Originally dreamed up in 1999 by a Georgia Tech student for a master’s thesis, the trail is plotted out largely on old railroad corridors. It is still very much a work in progress: The section near West End is paved, marked out with official signs, and has a finished look to it. But head east and you quickly run into a semi-finished section where workers are planting new trees and tending to other landscaping matters.

Keep going, and the paving gives way to a dirt track for a couple of miles, but even there, it is obvious just how highly desirable property near the trail has become. Without leaving the path, we counted ten major apartment or condominium developments under construction, representing many hundreds if not thousands of units, built partially in anticipation of an amenity that hasn’t even reached the area yet.

Could it happen here?
Atlanta and Albuquerque are very different places. Their metro area has about five million more people than ours, their per capita income is $20,000 higher, and their real estate market is more expensive.

But the parallels between the BeltLine Trail and our city’s Rail Trail project – presently envisioned as an eight-mile loop along the railroad tracks and through Wells Park and Sawmill, connecting back to the Rail Yards via the bosque trail and Barelas – are hard to miss. Both are meant to connect cultural and business centers as much as neighborhoods – not just run pleasantly along the side of a river as the bosque trail does. Both are envisioned not so much as a mere trail but almost as a kind of very long park, dotted with gathering spaces, low-key sports facilities, art, and other things you don’t see on, say, the trail that runs along the North Diversion Ditch. And both run through historic low-income neighborhoods where long-time residents – particularly those on fixed incomes – would have reason to worry that an increasing property tax burden would make their living situation untenable.

Property taxes are unique that way. If your income holds steady, you’ll most likely pay roughly the same amount of income tax as you always have. If your income drops, you’ll probably pay less. The same principle basically holds true for gross receipts taxes. But property taxes can rise even if your income drops.

The situation for Albuquerque homeowners, however, is not nearly as precarious as in Atlanta. New Mexico property valuations are subject to a 3 percent annual growth cap (though the actual tax paid can rise at a slightly higher rate than that). And for low-income seniors or disabled people, the two groups that are perhaps most likely to live on lower fixed incomes, an outright valuation freeze is available.

But the system does retain some capacity to put the squeeze on homeowners: Even relatively small percentage increases can add up over time, especially if incomes are flat, go down, or if other expenses increase. (They have also been known to cause political blowback.) For homeowners starting from a higher tax base – either because they bought in a hot market or once did a renovation that raised their valuation – a small percentage rise could translate into a more noticeable dollar figure.

And while caps and valuation freezes can certainly help, Bernalillo County Deputy Assessor Clyde Ward notes that they are contingent on filling out the right forms – sometimes annually. That can be a real challenge for those who are “land rich and money poor,” as he put it, but not especially computer-savvy or easily able to get Downtown to do it in person.

For some, Ward said, “it’s a struggle, so it’s just easier to pay the darn bill.”

A fix of sorts
In Atlanta, low-income property owners feeling the effects of the trail have another option. The Legacy Resident Retention Program is an initiative of the Atlanta BeltLine Partnership, a sort of non-profit arm of the public body that is developing the overall project. If you make less than the area median income and have lived in a zone near the trail since before March of 2017, then the program will pay the difference between your 2020 tax bill and future increases through the year 2030 – essentially freezing your bill at 2020 rates.

This is likely to come in handy for Tanisha Corporal, a social worker who bought a three-bedroom house in 2009 in the South Atlanta neighborhood, about half a mile away from the BeltLine. For most of the last decade, her property tax bill came to less than $50, but that started to change in a dramatic way in 2019, when it went up to about $600. Thanks to the program, it will effectively stay right there for the rest of the decade – a hedge against further valuation spikes.

From December, one of the largely finished sections of Atlanta’s BeltLine trail.
Art projects, be they murals or more 3D installations, are a common feature of the trail.
One of ten major residential construction sites we passed along an undeveloped section of the BeltLine.
Tanisha Corporal is enrolled in the Legacy Resident Retention Program, a kind of property tax freeze administered by an Atlanta nonprofit. (Atlanta Beltline Partnership)

“If the neighborhood goes really far really fast, property tax could be a challenge,” Corporal said. “That’s definitely a real concern.”

The program is one of three such initiatives in Atlanta, and the other two have no particular connection to the BeltLine. Former Mayor Keisha Lance Bottoms created one in 2020, and a nonprofit called The Westside Future Fund operates another targeted at a collection of specific neighborhoods (with financial help from Atlanta-based Chick-fil-A).

But operationally, they are all similar. A third party finds people who it wants to help with property tax bills and then covers those bills – the process is only modestly more formal than if you did the same for a relative going through a rough patch. The county assesses the property as normal, the homeowner pays the bill, the program pays its portion directly to the county government, and then the government issues a rebate check to the homeowner.

“We actually have to physically walk the check to Fulton County,” said Jen Treman, the BeltLine Partnership’s associate director of programs.

For all its small-scale (and low-tech) elegance, however, the program has its weaknesses. Finding those legacy homeowners amid all the renters, people who make too much to qualify, and an avalanche of new arrivals is no easy task for a nonprofit. The BeltLine Partnership estimates that 2,500 homeowners qualify for their program, but as of November, only about 60 people were enrolled, with about that many also in the application pipeline.

The partnership advertises on social media and through community organizations. They have yard signs and banners. They’re even going to hire people to knock on doors (particularly important for those without internet access) and are pushing word of mouth as much as possible.

Once they find a candidate, there is also the matter of convincing them that the probably-unfamiliar nonprofit is not running some kind of scam.

Corporal has run into this very problem when talking up the program to friends and neighbors: “There’s just been fear around trusting systems,” she said

But the enrollment goal is still doggedly clear: “All of them,” Treman said.

There are other issues: Taxes have markedly increased between 2017 and 2020, but the partnership is using 2020 as the baseline year because it doesn’t have the budget for anything else. And the program is slated to end in 2030, meaning some participants could see a dramatic tax increase at that point. It is also quite possible that long-time residents who make a bit over the median income are feeling the squeeze enough to up stakes, but they don’t qualify for the program at all.

Rob Brawner, the executive director of the BeltLine Partnership, is all too aware of those gaps, but he doesn’t think of the program as a permanent fix. Rather, it’s a kind of protected bridge to 2030, by which time he hopes Georgia politicians will figure out something more comprehensive.

“The long-term solution is not for philanthropy to indefinitely pay people’s property taxes,” he said. The goal is “having some sort of change to the tax policy that protects legacy residents … if we really care about this, ten years should be plenty of time.”

Go big?
As hard as it is for a non-profit or city to administer a tax rebate program for a limited group of people, it is potentially much harder to take on that kind of comprehensive reform Brawner is talking about.

Our state legislature could, in theory, write in some sort of exemption or freeze for low-income property owners living near the Albuquerque Rail Trail, but lawmakers in other parts of New Mexico would have to be convinced that helping out a small slice of the state’s largest city was a good idea. It could also create some kind of break for low-income people in general, but while that might have more theoretical appeal across the state, it would make the legislation exponentially more complicated.

Local authorities, meanwhile, can’t simply gather up a group of taxpayers and decide that they don’t have to pay anymore, Deputy Assessor Clyde Ward said. But he thinks the kind of small-scale approach used in Georgia might be more workable here: “A collaboration between the nonprofit and the city and the assessor’s office – trying to reach those people – would be maybe something that would need to be done.”

The city, for its part, seems well aware that the Rail Trail could raise property values and taxes. Project Manager Ciaran Lithgow, who works for the city’s Metropolitan Redevelopment Agency, acknowledged as much just last week during a presentation to the Barelas Community Coalition.

The MRA intends to develop an “equity plan” based on the idea of “ensuring that existing residents surrounding the Rail Trail can continue to afford to live in their neighborhood once the trail is built,” according to a slide in Lithgow’s presentation.

Also: “We are in the process of researching national best practices for abating or freezing property taxes for residential property owners on fixed incomes, such as those implemented in Atlanta,” MRA Manager Karen Iverson said in a statement. “We want to ensure that existing homeowners and renters on fixed incomes are not displaced and can enjoy the benefits and quality of life enhancements that the Rail Trail has the potential to bring.”

That is a sentiment that Ryan Gravel would agree with, having watched the development of the Atlanta BeltLine with keen interest for over 20 years. He was there at the beginning, in fact: In 1999, he dreamed the whole thing up for that Georgia Tech master’s thesis.

These days, he is still a fan of the trail, even in low-income neighborhoods where it might bring with it affordability challenges and the specter of gentrification. (Back in 2016, he resigned from the BeltLine Partnership’s board, citing a lack of progress on affordable housing commitments, among other issues.)

“You don’t hold communities down just to keep them affordable,” Gravel said.

“Gentrification sounds scary,” he added, while cautioning that we shouldn’t overthink it: “The problem is rising taxes and rents … It’s just doing the hard work of managing change and making sure that the city is for everyone.”

Travel expenses for this story were financed by The Neal Peirce Foundation, which was established in 2020 to support journalism about what cities and metro areas can learn from each other. The philosophy stems from Peirce himself, a nationally syndicated columnist who died in 2019. (Read his New York Times obituary here.) Peirce said his goal as a journalist was “to cross-fertilize ideas” and “to show the amazing new forces at work at the local level.”