Senator Linda Gray Seeks to End the Tax Break Benefiting Historical Homeowners, but Will She Change Her Mind When She Sees the Dilapidated, Unloved Homes?

Ugly Trellis House is finally gone.

This large, ramshackle 1920s bungalow, kitty-corner to my own, has been glowering at me ever since I moved into the neighborhood seven years ago. I could see its beauty, but I had to look hard, past the cheap, ugly trellising that someone had long ago nailed all around its façade; the tumble-down landscaping; the flaking paint.

But for once, I can report that a nasty old building is gone not because it's been torn down and replaced with something shiny and modern, as is usually the case in Phoenix. Ugly Trellis House is gone because someone recently bought it and has renovated it, inside and out, from the ground up. Ugly Trellis House is no longer ugly or trellis-y; it's a beauty.

Two months ago, this cutie was a dump. What if SB1166 had already passed?
Robrt L. Pela
Two months ago, this cutie was a dump. What if SB1166 had already passed?


Want to praise a Phoenix design element, old or new, that you've admired or loathed? E-mail Robrt Pela.

But I can't help wondering whether this home's new owners would have been so willing to overhaul this dreary old building if they knew that their property taxes were about to be doubled.

At a state Senate Finance Committee hearing late last month, Republican Senator Linda Gray proposed a bill that would eliminate the preservation-friendly tax break currently benefiting 5,200 Phoenix historic homeowners. That break is part of a 34-year-old program that, among other things, offers 50 percent lower property taxes as a buyer's incentive. The thinking behind such programs, which have worked wonders here and in other cities, is that it's expensive to rehabilitate or maintain old buildings, and people are more likely to buy, maintain, and restore them if property taxes are lower. The result is the preservation of what's left of our architectural history and a stronger residential presence in the downtown core.

Neither of these things seems to matter to Gray, whose constituents reside in northwestern Phoenix and don't benefit from the old-home tax incentive; her primary interest appears to be joining her colleagues in the scrounging of nickels and dimes to heal the budget deficit. According to preservationists who oppose the bill, Gray is working hard to obscure a plain old tax increase.

"She's trying to convince people that she's leveling the field by making everyone's property tax the same," Wayne Murray told me. "I think she wants people to think we're getting special compensation, but this program is not like Social Security or Medicare — your house doesn't automatically qualify just because it's old. You go through a qualifying process, and the result is stability in a community of houses that would otherwise be neglected."

Murray is a Coronado resident and preservation activist who owns dozens of properties in historic neighborhoods; he attended the Finance Committee meeting last month and is amused that Gray is asking historic homeowners to provide some kind of proof that they're actually putting the money they save on taxes into rehabbing their houses.

"Actually, that's something that's always been in place," according to Brad Bauer, president of the Willo Neighborhood Association, one of the historic 'hoods that would be affected if SB 1166 were to pass. "But I don't know that anyone has monitored it. How would they?"

I guess the county assessor could pay someone to police historic homes. But if someone from the Assessor's Office called me to ask if I'd recently spent money rehabbing my old house, and I hadn't, I'd lie.

Gray, who didn't return my phone calls, has been seen on Fox News, talking about how the whole setup is "unfair," because owners of newer homes here aren't given breaks in return for maintaining their properties. She told the Arizona Republic that these lower taxes are "taking 50 percent away from the schools," a cheap shot probably designed to get her bill backed by the teachers union and concerned parents everywhere.

It's this sort of obscuring of facts that will likely get this bill — probably in some tidied-up, amended version — passed. If it does, those of us who plan to put a new roof on next month or landscape our property this summer may not, in anticipation of a doubled property tax to budget for.

And then, all the other Ugly Trellis Houses will live on.

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Betsy Ross
Betsy Ross

Plus, since property tax bills are only configured every two years now in Maricopa County, then the house's condition and selling price goes into figuring the amount of property taxes, does it not? So their tax bite is less due to the condition of the property, and that would be the base rate based on the selling price.

So unless they do major work requiring a building permit, then the County Assessor would not be coming by to reassess it, so from the outset their tax bills are lower and remain so unless and until they do any major work or repair requiring a building permit (and if they do it in stages, since it is based a great deal on the amount of the repair itself or if it impacts city or county services, they may never have to get a permit).

So it seems to me those in those historic districts have been getting a free ride on the backs of the other communities, as have most of those part-time retirees and such with second homes there that actually many times use more of the city services (such as emergency medical personnel) than other citizens.

So I can see giving seniors tax breaks if they are on Social Security and don't meet a certain threshhold due to illnesses or don't have a school district within their community such as Sun City, but not those that live in incorporated areas that are incorporated when they purchase the property and do have schools in their communities, and are able to well afford it, especially with many of those elderly individuals purchasing second homes from the East Coast and Canada.

Betsy Ross
Betsy Ross

The tax break given to historical homes is actually a privilege and immunity that should not apply at all to the property taxes themselves, but on the price of the home to begin with. If those homes are dilapidated, then they should sell for less and be scooped up as has been "historically" the case by investors looking to turn a quick profit. That is what works, and is fair to all. That's what a "fixer upper" is all about.

And what needs to be done is tax breaks given to those living in those socialized HOAs which the state is getting huge amounts of added tax revenue, but the property owners zilch in order to truly level the playing fields. And seniors should not be getting any discounts on their property taxes, especially if they are second homes to begin with - since a great deal of those property taxes go toward city services, and educating the next generation - their posterity, as it were.

That "privilege and immunity" also needs to go, and was passed as an incentive due to Del Webb wanting to market those properties to East and West Coast retirees in their planned communities, but if they are living within an incorporated area, or where there is a school district, they should be also supporting it with their property taxes. Sun City does not have a school, and is actually unincorporated or was when it was built. But the privilege given to those living in homes where there is a school district should have to pay, and what kind of message does that send to our kids - that Grandma and Grandpa moved to Arizona in order to save having to pay property taxes for their grandkids educations?

Really incredible. There is much "unfair" about Arizona's property tax system - and then in what those property taxes are actually spent for, as a 45 year resident can attest, in less and less providing for those public costs and services, and more and more for "privileges and immunities" for corporate special interests.