Although the opposition by the Canutillo School District to a tax credit apartment has been framed as an issue of taxation and school performance, the underlining problem is that Canutillo doesn’t want to be bothered with poor people.
Make no mistake, NIMBYs are about bigotry and discrimination. Antero Pietila’s book, Not In My Neighborhood (2010) demonstrates how NIMBYs led to the “ghettoization” of the country’s major cities. The ongoing fight has been dressed as blight – Duranguito and Segundo Barrio – to the economics of lowering the values of homes in the neighborhoods or resulting in higher taxes.
Laure Searls has framed the opposition to the tax credit project as a drain for the school district taxpayers, arguing that the incoming children, i.e., the poor, will not be paying their fair share. But like all political rhetoric, the truth does not support the argument.
The New York Times (Low-Income Housing: Why Not in My Neighborhood?; November 25, 2016) looked into the impact low income housing projects have on property values in neighborhoods. The study, which surveyed over 3,000 low-income housing projects between 1996 and 2006, found that for the most part, low income housing projects had no impact on the prices of houses in the neighborhood where they established themselves. The exception was Boston.
Likewise, low-income housing has been demonstrated to have little impact, if any, on the quality of education in the public schools. This is especially true in low-income housing tax credit (LIHTC) programs, like the one opposed by Canutillo.
The Federal Reserve Bank of Dallas studied the impact of LIHTC program housing on local school districts. The Dallas Fed studied 2,311 LIHTC properties and correlated that to the Texas Education Agency data for elementary schools between 2004 and 2009.
The study found two interesting things. The first is that there was no “substantial” changes to the school’s demographics because of the low-income housing projects. The study also found that the LIHTC projects had a “positive influence” on the school accountability ratings the same year that the housing was put into service. The positive impacts taper off somewhat after the first year.
However, the study found that LIHTC results in very small influxes of students into the neighborhood schools. Other studies show that LIHTC housing projects do not have a detrimental effect on the local schools, as well.
This is because LIHTC programs do not create an influx of new students into the neighboring school districts, but instead move existing students to new housing. That’s right, tax credit low income housing does not bring in new students into the school district, but, instead these housing developments give the students better choices in housing.
But what about the tax question?
A 2007 Harvard Study looking into multifamily rental housing found that the record about multi-family housing is often distorted. The Harvard study found that single-family housing generally introduces more students per 100 units (51%) then apartment complexes (31%). The study concluded that families with children tend to look for single-family housing instead of multifamily housing.
Obviously, the housing and demographics of each community is different so generalizing the results can be controversial. Some would argue that the El Paso community is different. Even so, the property in question is slated to be a 48-unit multifamily complex. Even at the un-statistically supported 50% family to student ratio shows that at most, the Canutillo School District would be impacted by about 24 to 30 students by the proposed development. Remember that the statistics demonstrate that at most, the school district may get 15 students. However, whether the statistically correct figure, or the inflated figure is used, many would be existing students who are staying in their existing neighborhood and schools. People seldom move out of their neighborhoods, as demonstrated by the resistance of the Duranguito residents to be relocated for the arena.
The tax question will persist on the notion that the low-income housing projects do not pay their fair share.
The Harvard study demonstrated that apartment complexes pay more into the local tax base then their single-family taxpayers counterparts. This is because apartment complexes are taxed at the commercial tax rate, which is higher than what the homeowners pay. When the children to living unit ratio is factored in, apartment complexes pay more because they provide less students to the school districts then their single-family counterparts.
For example, there is an existing tax credit property in Canutillo already.
Canutillo Palms is a $4.8 million tax credit property. It has 170 units. According to the El Paso CAD, it paid the Canutillo School district about $74,795 in 2016 in school taxes. It paid $75,017.12 in 2015. The 2016 figure comes out to $439 per unit. However, by taking the student ratio found by the Harvard study it shows that Canutillo Palms paid about $1,246 per student on average.
By comparison, my old house in the Canutillo school district paid about $2,112 in school taxes for 2016.
The single-family house pays more in school taxes but, statistically, it burdens the school district more than a multifamily complex.
Additionally, there is the notion that tax credit apartments are the same as tax abatements that the City of El Paso uses to entice new retail businesses or hotels. Abatements incentivizes new development by cancelling part or all local taxes for several years.
This is not true for tax credit developments.
Tax credit developments are not tax free. Tax credit developments pay all the same taxes as other businesses and homeowners that contribute to the tax base of the community. Contrary to the misnomer, a tax credit development is an alternate method of funding low income housing using the investment from syndicators, or investors, to offset some of their federal tax obligations. It has nothing to do with local taxes.
As a matter of fact, because tax credit multifamily developments are new construction and because the are commercial in nature, they increase the tax revenues of the taxing entities that they build on. Because no abatements are offered by the local taxing entities, each new tax credit development augments the tax base of the community they build on.
As you can see by these facts, the driving factor behind Laure Searls opposition to the proposed development has nothing to do with the tax impact on the school district and everything to do with NIMBY, as in Searls and company doesn’t want poor kids at her school.
To further illustrate this, let’s look at Laure Searls’ history when it comes to safeguarding your taxes.
Laure Searls on Property Taxes
While Laure Searls opposes poor students attending the Canutillo School district based on the false notion that they are a heavy drain on the taxpayers, she has no problem allowing the taxpayers to fund her travel expenses. You might remember that back in 2014, the Canutillo School District came under scrutiny for their excessive travel expenses. It came under scrutiny for $30,000 the board spent to attend one conference in New Orleans that year. Searls spent the second most amount of the Canutillo board members. As a result of the controversy, the Canutillo board increased its travel fund the next year. You read that right, they increased their travel budget.
When asked about it, Searls told KVIA last year that the increase was necessary because the Canutillo School board is “really well trained.” This was in response to why the school district allocated an additional $20,000 to their travel fund. It had the highest school board travel expense of all the school districts in the El Paso area in 2015. School board members are not required to travel for their board assignments.
Now let’s look at her service on the El Paso CAD, the agency that determines the valuations for the taxes that Canutillo and other taxing entities collect.
The El Paso CAD has been under fire for the perception that it gives large businesses, like Western Refinery, an unfair advantage to reduce their property tax bills each year. The notion is that the El Paso Appraisal District does not oppose the court challenges of the larger businesses citing a lack of legal resources to go to court. Yet, the homeowner and small business owner is accosted by the CAD when challenging their tax appraisals.
Laure Searls is the current vice chair of the El Paso Central Appraisal District. To my knowledge, Searls has not taken her position on the CAD board and looked for ways to maximize the tax revenues for the Canutillo schools. Yet she opposes a low-income development citing tax pressures on the school district.
It gets worse for Searls.
In late 2012, when the El Paso Independent School District was in midst of the cheating scandal discovered in 2010, Damon Murphy, EPISD’s associate superintendent for priority schools came under immediate scrutiny for his involvement in the scandal. Murphy had previously worked for Lorenzo Garcia in Houston, before coming to El Paso at the urging of Garcia. In 2010, Murphy was hired by Canutillo to be the associate superintendent.
In October of 2012, the Canutillo Board School district voted 6 to 0 to suspend Murphy without pay and begin the process of firing him. The Canutillo district’s internal auditor found several instances of student records being altered at the district and the allegations of Murphy’s activities in the cheating scandal had become a community scandal.
Laure Searls abstained from voting on Murphy because “she wanted more time to ‘digest’ the audit findings,” according to an October 12, 2012 El Paso Times article.
As you can clearly see, Laure Searls opposes the tax credit development not because of the perceived notion that it is a tax burden on the school district but for other reasons unrelated to taxation and school standards. The evidence demonstrates that her opposition is the typical NIMBY mentality of not wanting poor kids in her neighborhood.