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City takes step toward 7-fold ‘blight tax’
Council OKs first reading 3-1; mayor urges expert advice
City of Statesboro seal

City Council took another step Tuesday toward a carrot-and-stick approach to compel repair or removal of dilapidated, abandoned houses and the cleanup of other “unsafe” properties, approving a first reading of a blight tax ordinance.

If enacted after a second reading, the ordinance as drafted would impose a special tax, seven times the city’s regular millage rate, on properties deemed “blighted” by the Municipal Court, until ordered improvements are made. After improvements, the tax rate would rate would be reduced to one-half the regular rate for from one to four years.

“This is a hybrid carrot-stick approach to blighted properties within the community,” said City Attorney Cain Smith, presenting the draft ordinance.

The first-reading approval came by a 3-1 vote with District 4 Councilman John Riggs absent. Mayor Jonathan McCollar urged the council to get expert advice before acting, and District 3 Councilman Jeff Yawn, who cast the “nay” vote, agreed with the mayor.

Smith had drawn the ordinance up after District 1 Phil Boyum introduced the idea in March. At first Boyum had suggested increasing the tax on properties targeted for cleanup by a factor of 10, and the council had voted 5-0 on March 5 to have Smith write a draft.

But further action was put on hold after the city agreed to back an application for membership in the Georgia Initiative for Community Housing. In August, Statesboro was named one of seven GICH finalist communities, of which five will be chosen as new participants, and the council agreed to Boyum’s request to have the blight tax proposal placed on this week’s agenda.

 

‘Factor of 7’

Instead of a factor of 10, the proposal states that after the court designates a property as “blighted,” the city will levy “an increased ad valorem tax by adding a factor of seven (7.0) to the millage rate generally applied.”

Smith later confirmed that this means the millage rate would be multiplied by seven, not just that 7.0 mills would be added, which would have merely almost doubled the tax. Smith based the proposal closely on Savannah’s 2017 blight tax ordinance, which applies a seven-fold millage rate hike to blighted properties.

The factor that Statesboro applies in its tax penalty remains for City Council to decide, Smith said.

Vienna is another Georgia city he and Boyum mentioned as having a similar ordinance.

“It’s too novel of a program to really have any sort of definite, reliable history on how it’s worked in the those other communities, but it is in compliance with state statute, and it is becoming increasingly common,” Smith told the council.

 

Habitat’s support

During Tuesday’s hearing on the proposal, two Habitat for Humanity of Bulloch County staff members spoke in support of the blight tax.

“It’s one tool among many that we ought to be using,” said Marcus Toole, community relations coordinator for the local Habitat affiliate. “I think it also dovetails well with the GICH program that Statesboro is trying to get into.”

But if Statesboro isn’t accepted into GICH this year, the blight ordinance would still be something the city “can do now to begin correcting some of the property issues in Statesboro, as long as there’s the provision there, and it seems to be, that we’re not going to be displacing people who are in low-end properties,” Toole said.

Kathy Jenkins, Habitat Bulloch’s executive director, related the proposed ordinance to sites where Habitat builds homes in partnership with qualifying first-time buyers.

“We find that a lot of our properties happen to be near or even adjacent to some of these properties which would quality as blighted properties,” she said. “Having this tax incentive would definitely help us. There are properties where we would like to build but we have concerns about the neighborhood.”

Officially a “Community Redevelopment Tax Incentive Program” proposal, it also specifies that all revenue for the penalty tax must go into a special fund for redevelopment purposes, including the city’s cost to repair or demolish “unfit buildings and structures.”

 

Mayor’s caution

“This is what I have a concern with,” Mayor McCollar said. “The city of Statesboro has a poverty rate that’s above 50 percent, and many times that we’re looking at these blighted properties, one of the barriers that these owners are facing is the may just not have the money to fix it.”

Families could lose wealth by losing property because of mounting taxes, he said.

“Council is at discretion to do what they decide,” McCollar added. “Me personally, I would like to utilize some experts in the field to come in and do some workshops with us, tell us exactly … the pros and cons of this.”

He also warned of “the unintended consequences of public policy.”

Boyum asserted that the ordinance can be used to target only the worst abandoned properties.

“We’re not looking to kick anybody out of their home,” he said. “If this is an owner-occupied property, or it’s a rented property (with) residents, that’s not what we’re looking at. We are looking at historically vacant and ignored properties, typically owned by folks that can afford to just sit there and let it rot away.”

Boyum’s motion to send the proposal forward to a second reading was seconded by District 5 Councilman Derek Duke.

After voicing his “nay,” Yawn said: “Let the record show I’m not against it at all. I think it’s very much needed, but I would like to hear from some other experts.”

District 2 Councilman Sam Lee Jones voiced the third “yes” but noted that this was only a first reading, and said he also wanted to hear from expert.

If the council proposes any significant changes the ordinance will revert to a new first reading, so it will not necessarily be enacted at the next meeting, Boyum noted.