INDIANAPOLIS -- Gentrification of urban neighborhoods often leads to a rapid rise in property values and can often force out historic residents in favor of wealthier new ones. Now an Indianapolis city councilor wants to try to protect long-time residents of those neighborhoods by limiting the increase in property taxes.
As urban core neighborhoods of Indianapolis again become popular places to live, real estate values are surging. But those neighborhoods usually contain residents who have lived there for decades, ones that occupied homes long before the neighborhoods were desirable by younger generations.
Democratic city councilor Vop Osili wants to make sure those long time homeowners don’t get priced out of the streets they lived on for so long by slowing the speed at which their property taxes increase.
"It’s to protect those homeowners who have weathered the storms of areas in our city that have experienced neglect, so they can remain and enjoy the benefits" of a rebounding neighborhood, Osili said.
Osili has introduced a resolution that would ask the state Legislature to allow the council to amend the city property tax code. He’d like to see long-time homeowners protected from dramatic increases in their tax rates.
Exact details on how such a tax relief program would work are a long way off, but the gist is that homeowners would who have lived in a home for a long enough period of time and have seen surrounding property values -- and thus tax rates -- rise dramatically over a short period of time, would have their tax rate increase capped or slowed.
A recent report found properties along the Cultural Trail downtown have increased more than a billion dollars.
The most stark example of climbing property values because of gentrification is the city's Fountain Square neighborhood, where home prices have quadrupled in just four years.
The median cost of a home in that neighborhood in 2010 was $30,000, according to the Metropolitan Indianapolis Board of Realtors. Last year that had risen to $131,000 for a home.
A council committee will consider Osili’s resolution at a meeting this evening.