HP’s demo tax is fundamentally unfair
Peter Diambri is 87 years old and owns a tiny vacant house on a small lot in Highland Park. The home, formerly a rental property, has been subject to freezing and subsequent severe water damage. Several years ago, at the City’s request, Diambri boarded up and secured the property.
Mr. Diambri and his family have determined the home, with an estimate property value of $100,000, cannot be feasibly repaired and want to take corrective action. Diambri contacted the City to obtain a demolition permit to raze the objectionable structure, but he was shocked to discover that while the City is not opposing the demolition they want him to pay a $10,000 demolition tax to do so.
One-third of the $10,000 is to go to the City’s infrastructure fund, and two-thirds of the money will be deposited in the City’s Affordable Housing Trust Fund that helps provide below market housing to those that may otherwise be unable to afford to live in Highland Park. On top of the $10,000, Diambri would also have to pay an additional $5,000 if he wishes to defer paying the tax now and a $750 demolition permit fee (100 percent of the permit fee is also diverted to the affordable housing fund). Of course, he will also have to pay a contractor an estimated $20,000 for the demolition.
This isn’t a special tax just for Mr. Diambri; it’s a tax targeted toward all owners of older residential properties. In other words, as a consulting firm hired by the Village of Wilmette best put it: “[A demolition] tax would impact mainly older, functionally obsolescent single family detached houses, typically owned by longtime, older residents whose major assets are their homes.” Even when a homeowner sells to a builder, the consulting firm says: “Its cost would [still] likely fall on residents selling houses destined for demolition, because builders (who may be the persons actually paying the tax) would factor the tax into the price they would be willing to pay for the property.”
Very few communities nationwide have instituted such a tax, and even fewer as high as $10,000. That’s not to say the City’s goal of funding affordable housing is devoid of merit, but those that simply own older homes, which are most likely to be demolished, should not shoulder a disproportionate burden of funding these activities. As is, most Highland Park residents are not required to contribute anything toward affordable housing efforts, while those that own smaller, older homes destined by the market to be demolished get hit with this massive tax.
At 87, Mr. Diambri has put in a lifetime of hard work to provide for his family and retirement. He is trying to do the right thing by demolishing a functionally obsolete property; he should not have to forgo 10 to 15 percent of his property’s value to fund ancillary city services, especially when most other Highland Park residents do not have to contribute even $100.
Howard Handler is Government Affairs Director for the not-for-profit North Shore – Barrington Association of REALTORS – the area’s leading private property advocate. Handler, a licensed real estate broker, received his undergraduate degree from the University of Wisconsin – Madison, and his master’s degree in Public Policy and Administration from Northwestern University. He can be reached at: hhandler@iar.org
Old H.P.
7:43 pm on Thursday, February 7, 2013
Come on Pete, It’s just time to redistribute your money. You must think you have a right to keep it or something. Now hand your money over to the trust fund kids, they know what’s best for Highland Park.
Cliff Hanger
11:34 am on Friday, February 8, 2013
and the private country clubs are in for a free ride... so maybe there's the answer... just declare the place a private thinking club, in this place, it'll be damn near unique.
Standards
6:45 am on Tuesday, February 12, 2013
Would HP prefer they abandon the home and leave it and make the neighboring properties worth less with such an eyesore? What the heck is wrong with our city?
Next election this should be a major point to debate and we should use our votes to change this. I've had it with these politicians- time for new blood.
Cliff Hanger
11:49 am on Tuesday, February 12, 2013
From Standards mouth to every voter's ear...
Meshephelous
11:51 am on Tuesday, February 12, 2013
It seems like the big lobby behind this tax is the real estate agent/broker industry. Looks like the prices on teardowns will suffer and they will be deprived of commissions.... I'm shedding a tear for you.
On the other hand, I don't agree that this tax should go to affordable housing. There is plenty of that in Waukegan. Look at the police blotter and see how much activity there is on the 2700 block of St. Johns... Hmm... Wonder why....
Bryce Robertson
9:53 pm on Wednesday, February 13, 2013
Your insinuation that affordable housing brings crime is both appalling and small-minded. First off, there is no affordable housing in the 2700 block of St. Johns. Additionally, if you read the police blotter regularly, you'd notice that there is actually very little crime in that area. The closest thing to affordable housing are a few 3-unit buildings that have low rent, one of which is somewhat dilapidated. The other, actually, just underwent a brilliantly done renovation about four years ago.
Highland Park's affordable housing is a model for other communities across the country. You should get to know the program (see: http://www.cpahousing.org) before you start saying that residents of HP's affordable housing are criminals. Suggesting that our program is anything like Waukegan's "Section 8" housing units is disturbing, and an insult to both those who live there as well as those who spend their time volunteering and working to ensure that our housing program is as high caliber as it is.
Valerie Mattingly
3:47 pm on Wednesday, February 13, 2013
Another rip-off by our fabulous politicans!!! They are nothing but a "legalized mafia" and they are out to destroy the average citizen (taxpayer)
Cliff Hanger
3:49 pm on Wednesday, February 13, 2013
why not? They've already pretty much destroyed what used to be a beautiful place...
Meshephelous
8:56 am on Thursday, February 14, 2013
Bryce, learn a thing or two before arguing with adults:
http://www.cityhpil.com/?nid=206
See Ravinia Housing. Section 8. 2743-2755 St. Johns.
Now apologize and go to your room.
Bryce Robertson
9:41 am on Thursday, February 14, 2013
First off, don't you dare patronize me. How much time have you ever spent getting to know anybody who lives in the units, or spent volunteering to help better the program? Clearly not much. I do see the "Ravinia Housing" - those townhomes, while affordable housing, do not have the issues you mention. You're correct that they do exist in the back alley on St. Johns, but if I'm correct (this is year-old information, but could still be accurate), a few of those townhomes are currently vacant. (Also, just for clarification, they're on the HP/Highwood border, thus why they didn't pop into my mind as being in HP). There's no crime - and no undesirable residents. Generally, in our neighborhood, the "undesirables" are those who believe that they're better than those who live in affordable housing simply because they have more money.
And you still never answered my question from above - how much do you know about CPAH and Highland Park's true affordable housing opportunities? Clearly not much, or you would never have made the insinuation in the first place.
Howard Handler
8:35 pm on Thursday, February 14, 2013
Highland Park's affordable housing program does NOT bring a criminal element into town. Those benefiting from this below market housing are no more prone to criminal behavior than any other Highland Park resident; to insinuate otherwise is plain false and demonstrates a lack of understanding regarding the program.
That said, again, the program is remarkably unjust in the sense that it targets very narrow segments of Highland Park residents to fund, in the form of massive contributions, the bulk of the program, while the rest of the community does not have to contribute anything. Many advocates of HP's affordable housing program tout the benefits of the program and insist that there is widespread support for the program, yet they are unwilling to contribute their own money or ask the rest of the community to do the same. That is the contention with the program, not the mission nor those served.
Howard Handler
Government Affairs Director
North Shore - Barrington Assoc. of REALTORS
Bryce Robertson
12:09 am on Friday, February 15, 2013
Howard - good point in that it would be nice to see more widespread support for the program. At the same time, though, I would invite you to one of CPAH's volunteer days. They're quite rewarding and fun at the same time. You'd be surprised at the support that the neighbors to each house give when we're out there working. There are more people supporting the program than you may think - contribution doesn't have to come in the form of just money.
Howard Handler
2:13 pm on Saturday, February 16, 2013
Bryce -- Absolutely... contributions do not have to come in the form of money... volunteering time is just as important. However, those that volunteer their time are choosing how much time to volunteer and for what organizations to volunteer. Those hit by this $10,750 - $15,750 have zero choice to contribute, even if they cannot afford such a massive tax. Moreover, it takes away choice of which non-profits they may want to support. Perhaps these property owners would rather donate their money to fight cancer or to a food bank.
David Greenberg
12:44 am on Friday, February 15, 2013
If someone chooses to support the program, that's their business. But the taxpayer shouldn't be REQUIRED to do so - no matter how the funding is acquired, whether it's a fee, tax, assessment, whatever.
That said, there are at least two instances that come immediately to mind where people didn't want to be encumbered by the teardown tax, and so they just simply left up enough of the structure such that it didn't qualify as a teardown.
In one instance - the item left up was a chimney and a portion of a wall, and now that's encased inside of other walls in the new home, so technically there wasn't a teardown, but there is an entirely new home built around the old part, so what's the difference?
This law should be rescinded.
Meshephelous
12:53 pm on Wednesday, February 20, 2013
Bryce, my child, I thought of you when I saw this week's police blotter!
http://highlandpark.suntimes.com/news/18316625-418/highland-park-police-blotter-for-feb-12-feb-18-2013.html
Bryce Robertson
12:56 pm on Wednesday, February 20, 2013
Unfortunate, but one incident does not a stereotype make. Also, there's no way for us to know which part of that block said woman lives on... those units are just one small, hidden part.
Jami Sharfman
4:38 pm on Thursday, February 21, 2013
Mr. Diambri owns numerous properties in Highland Park, and opted to let this one fall into a state of complete disrepair long ago. The land should sell for about $125,000, allowing Mr. Diambri to realize a hefty profit, since its very clear no money was ever spent on this property, which is actually a shack. I do hope it didn't look like this when Mr. Diambri collected rent! Sellers don't suffer from the demo tax, the builder/buyer and/or end user absorb that cost. This isn't a poor, elderly victim, as articles have portrayed! This is an HP landlord who is having to deal with a situation of his own creation.