Gentrification may be causing long-time Chapel Hill residents to have higher property tax

The Northside community, along with the Tin Top, Pine Knolls and rural northern Orange County neighborhoods have seen an increase in their property valuations, raising concerns among community members about gentrification.

Every eight years, Orange County revalues homes. These property values are used to determine how much homeowners pay in property taxes. Carrboro Town Council member Susan Romaine said as the appraised values of the homes increase, the long-time residents are faced with higher tax bills.

"In some cases, those property taxes get so high that they can’t afford to live in the neighborhood any longer," Romaine said. "It’s a perfect example of gentrification.”

Many in Northside who have felt the effects of this increase have lived in the community for generations. 

"The values of the homes of the long-term residents are being compared to the sales price of some of the homes that were snatched up by investors at prices that are much higher,” Romaine said.

The incoming investors and the selling of homes at a higher price than their value complicates the appraising process, Hudson Vaughan, co-founder of the Marian Cheek Jackson Center, said. Vaughan leads the Northside Neighbor Initiative's acquisition team, where he has reviewed comparative market analysis and appraisals for hundreds of properties. 

Vaughan said in most neighborhoods, the appraisals are based on the size of the houses and other features. He said typically when appraising a subdivision, a block built in 1990 was separated into a different neighborhood than a block built in 2010, so they do not compare 1990 houses to 2010 houses.

However, Vaughan said Northside houses that are not permitted anymore, such as duplexes, are being actively compared to small residential homes leading to an inaccurate assessment of the neighborhood as a whole. The appraisal process takes the most expensive and the cheapest homes and attempts to create a median value on which all properties can be judged. 

He said because of this technique, a 677 square foot home built in 1952 is valued at $537,200, which is a price comparable to a 3,534 square foot home built in 1986 that is valued at $535,700. These homes are both found in the same neighborhood.

Renee Price, chairperson of the Orange County Board of Commissioners, said much of this disparity is due to investors purchasing properties at much higher prices than the value of the home. She said investors renovate the homes and allow students to rent, which causes the value of the remaining properties that are single-family homes to increase significantly.

"It is affecting the value of the remaining properties, which are single-family homes that are owned by the people that are living there, and many of those homes have been in families for a couple of generations or were born and raised there," she said. 

In a letter to the Orange County Board of Commissioners, Vaughan and Kathy Atwater, community advocacy specialist for the Marian Cheek Jackson Center, said while low or fixed income neighborhoods such as Northside are seeing a 53.06 percent increase in property value, statistically higher income areas like Boundary/Tenney Circle only see a 4.65 percent increase. 

They also said in the letter that a 95-year-old African American neighbor in Northside saw her property tax bill rise by 85 percent in 2021, which cost over 50 percent of her income. They compared this to those who live in mansions near UNC, whose bills only rose by 5 percent. 

Vaughan said this means the higher-income communities are receiving a tax break. 

To combat this problem, organizations like the Marion Cheek Jackson Center and EmPOWERment, Inc. have worked with families to file appeal forms or to write a letter requesting an appeal.

However, Vaughan and Atwater said in the letter that having people individually appeal their property tax valuations isn't enough. 

"This places the burden of a systemic issue on individuals and community organizations to do what the county should be doing: fix problems that are clearly widespread," they said in the letter. 

Todd McGee, the community relations director for Orange County, said when assessing properties, the county doesn't look at who the owners are. Instead, a state system assesses all properties the same way, no matter where they are located. 

“They don’t look at who owns it, they are certainly not looking at any kind of racial or ethnic qualities about who owns the property," he said. "The system that everybody is using, it may have some built in inequities in it that need to be addressed.”

McGee encouraged any resident who believes their property has been incorrectly assessed to appeal. 

“That’s why there is an appeals process built in,” he says. “We want everyone to understand that you have the right to file an appeal.”

Vaughan and Atwater have advocated to the Orange County BOCC for a change in the system of appraisals, including a correction of property values that would lead to a reduction in property tax. 

"We hope that you will see the great need for immediate and drastic action, and that you will honor residents who have built and sustained this town with more than your words," they wrote in the letter. 

@CTeachey 

@DTHCityState | city@dailytarheel.com 

CLARIFICATION: A previous version of this article incorrectly stated Hudson Vaughan's current role with the Marian Cheek Jackson Center. The story has been updated to reflect his current title. The Daily Tar Heel apologizes for this error.