upzoning to raise property taxes, but development stymied by covenants
We are in an interesting situation here in Charlottesville. The city wants to upzone several neighborhoods, including ours, which I consider a good thing. However, in our old neighborhood the properties and lots are governed by covenants (i.e. contracts) that limit development. Specifically, the covenants permit no more than two dwellings per lot. But the city is about to upzone some parts of the neighborhood to permit 4, 8, and even 12 dwellings per lot. The problem is that after the upzoning, those properties in with the allowance for e.g. 12 dwellings per lot will be taxed according to that greater allowance... taxed for the potential of 12 dwellings. Their taxes are going to go up a lot! But by the covenant, none of those owners will be able to put more than two dwellings on their lots. A local with legal knowledge points out that the covenants will absolutely be enforceable, so that anyone who dares to put more than two dwellings on their lot will likely face a costly legal battle, and could well lose that battle.
What to do?
Comments
4 comments
You're demonstrating why I'm not a fan of restrictive covenants nor dramatic upzonings. This situation seems like bad policy decision meets bad policy decision. I don't see a simple or even logical way to resolve this. If I were an elected official in Charlottesville, I would not support this upzoning, but I also wouldn't prioritize this neighborhood for any kind of maintenance spending so long as there are other neighborhoods that are structurally less resistant to change and in need of funds.
Perhaps then the solution is to recommend a less dramatic upzoning? So, for example, suggest a "compromise" of maximum 4 dwellings per lot... understanding that even these cannot be built, but at least the taxes would not shoot up as high. Can convenants ever be gotten rid of or modified? Questions for an attorney, I guess. Thank you for your reply!
Well, I don't think there is a solution here. A less dramatic upzoning would be.... um.... less pointless.
But, yes, covenants can be removed, but more often they disappear because they are ignored. When there is a consensus that a covenant no longer makes sense, the private parties involve won't enforce it.
So, I guess a smaller change is less likely to be offensive and thus less likely to be challenged. ???
I think the flaw here is in thinking that taxes will go up because of the potential of the property. Is this a property tax system? If the potential isn't there due to covenants, valuations won't increase -- or shouldn't increase -- and so taxes shouldn't go up. From the public's point of view, this is another downside of covenants (it locks in public expense without hope of increasing public revenue -- a bad business situation for a municipal corporation).
If your taxes are somehow tied to the development potential of the property, I'd love to study that system because there is nothing that increases the development potential more than public infrastructure, but generally valuations don't take that into account proportionate to the benefit it creates.
I'll add to this thread/conversation as I learn of more options or action developing. Thanks again for your extensive replies!
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