Long-time Homeowners are Getting Burned by SA’s Real-Estate Market. Lawmakers Have a Bill that Could Prevent the Worst Damage.

click to enlarge Texas House District 123 Rep. Diego Bernal - Josh Huskin
Josh Huskin
Texas House District 123 Rep. Diego Bernal
Editor's Note: The following is Their Town, a column of opinion and analysis.

Family life never just rolls forward like a train on tracks. It veers off, doubles back and lurches forward again. Kids move away from home, and sometimes they move back in when they’re adults. Parents get old and sick, and their children become the caretakers. When the money’s almost gone, no one ever knows exactly the right thing to do with the property that’s tied the family together.

And sometimes family life collides with the social and market forces that tear apart and remake neighborhoods, like it has for San Juanita Martinez.

Martinez moved out of her parents’ 1,428-square-foot house on West Gramercy Place when she was 22. She’s 49 now and is living once again in the Beacon Hill home, caring for her 86-year-old mother. Her father suffered from both Alzheimer’s and cancer, and died several years ago.

Her parents put the house in San Juanita’s name in 2014, which means she’s responsible for the property tax bill – without the tax freeze for seniors or the $10,000 senior exemption. She expects to pay $4,315 this year after handing over about $3,600 in 2017.

Martinez, who's single with no children and works for a capital investment firm, claims her mother as a dependent on her federal taxes. That gives her some financial flexibility to cover the property taxes. But when her mother passes away, she said, “I may have to wind up renting because I’ll no longer be able to afford it, which is crazy – it’s our house.”

The property’s value has jumped by 43.5 percent since 2015, hitting $172,020 this year, according to Bexar Appraisal District records.

Beacon Hill is located in Texas House District 123, which is hot from the friction between deeply-rooted homeowners and the newcomers who are driving up their property values and tax bills. Democrat Diego Bernal is its representative.

District 123 includes some of the most sought-after addresses among homebuyers in San Antonio – Beacon Hill, Mahncke Park, Lavaca, Southtown and a few others. It also takes in King William, where the roiling fights between old and new residents ended years ago with the recent arrivals winning decisively.

“New neighbors and old neighbors are pointing fingers at each other,” Bernal said, “and there’s a fair amount of distain, distrust, bewilderment and, really, just confusion about what to do about it.

San Antonio’s housing market has been blowing up for several years. The average sales price for a house climbed year-over-year a little more than six percent to $244,567 in February, according to the Real Estate Center at Texas A&M University. While the pace of home sales has slowed a little recently, houses continue to change hands near historic highs.

“Right now, I see a lot of yuppies, a lot of young people buying their houses,” said Martinez, who gets several offers a month on her Beacon Hill property. “I’ve gone into their homes and talked to them. ‘Hey, welcome to the neighborhood.’ Their plan is just to keep it for a moment and then rent it.”

Across San Antonio, Chief Appraiser Michael Amezquita said, demand is running so high that potential homebuyers are turning to less well-to-do neighborhoods for houses they can afford. “That’s happening right now in Harlandale,” he said. That means long-time residents in those communities will begin to feel the same pain – from the same tax bite – experienced by homeowners who live closer to downtown.

“It’s tragic. These are people who are getting forced out of houses that they own. In some instances, they’ve paid the house off,” Bernal said.

He has been working on a bill for the 2019 legislature he believes will help. The measure is intended to ease some the pressure for homeowners who have lived in their houses for at least 15 years, and whose property tax payments have increased at least 120 percent over the last 15 years. Owners who fall in that category would receive the property tax freeze that seniors 65 and older claim on their houses, though not the $10,000 exemption for which they’re also eligible.

Bernal said local taxing entities such as the city and school districts could offer the freeze to distressed homeowners, but wouldn’t be required to do so.

“It’s not designed to provide relief. It’s not designed to be a release valve for people who are being squeezed,” Bernal said. “It’s designed to capture the population of folks who have been in a neighborhood a long time, who are likely on the verge of being squeezed out, and who probably didn’t see the current environment coming.”

Bernal outlined the plan, which he’s been putting together with state Sen. José
Menéndez, at a property tax forum at San Antonio College on Saturday. Martinez sat in the second row, close to the table where Bernal, Menendez and District 1 Councilman Roberto Treviño sat facing the crowded room.
During the question-and-answer period, she told the politicians about her plight on West Gramercy Place. While she’s only owned the home for three years or so, she said, it’s been in her family for decades. She wanted to know, Doesn’t that count for something?

Martinez left the forum concluding that, no, her family’s ownership of the house probably didn’t count for much.

But the lawmakers were sympathetic, in part because Martinez’s story is becoming more common as baby boomers retire and their health fails. Menéndez brought up possibly adding a provision to the proposed bill covering a situation like hers.

The collision between families and San Antonio’s roaring real-estate market is in its early stages, and the policy fixes will be spotty and improvisational for a while. But at least some elected officials – in local government and San Antonio’s legislative delegation – are focused on the growing crisis.

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