On KC’s Westside, high property taxes can mean gentrification. Will these plans help?

Update: The Chapter 353 plan passed through Kansas City Council’s Neighborhood Planning and Development Committee on Wednesday afternoon. City council members will vote whether to approve the plan at Thursday’s City Council meeting.

In 2019, the assessed property taxes for Sally Pacheco’s Westside Central home quadrupled.

The lifelong Westside resident in her 50s whose parents grew old in the historically Hispanic neighborhood, said it was an incredibly stressful time for many, herself included.

She appealed to the Jackson County Board of Equalization and was ultimately successful in proving her taxes were unfairly assessed. Her sister did the same thing on behalf of their mother, who also lived in the neighborhood.

They got lucky.

Many residents weren’t as successful in fighting the tax hike, especially older, Spanish-speaking residents, Pacheco said.

The future of the Westside has long been on the minds of its residents, many multi-generational Hispanic families.

In the years since 2019, when the neighborhood experienced one of the biggest property tax hikes in recent history, large, modern homes valued at at least half a million dollars have continued to replace humble cottage-style homes and vacant land. Now, facing the likelihood of a tax re-assessment in 2023, the neighborhood is trying to figure out how to move forward without leaving some residents behind.

In response, two possible tax relief plans are on the table for Pacheco and other Westside homeowners. One, which has been introduced to Kansas City Council members, was proposed by the Westside Housing Organization. Some residents fear it could invite more gentrification since the plan gives tax breaks to everyone, regardless of income. But the other plan, being drawn up by the Hispanic Economic Development Corporation, has not yet made its way before council, leaving some residents concerned that it won’t be ready ahead of next year’s tax re-assessment.

Kansas City Public Schools has taken a stance against the proposal going before council members this week, saying they fear the plan, which will reduce some of the tax revenue going to the school district, will cause further harm down the road.

Despite the competing campaigns over the two different plans, Westside leaders insist the plans can co-exist. Council members said it’s possible for both to be approved, allowing residents to choose the plan that’s best for them.

But most seem to agree that taxes are too high for many Westside residents.

“People say they move here because it’s the Westside, they like the culture,” said Pacheco, who was raised in the Westside and has lived in the same home off Avenida Ceser Chavez for the past two decades. “Well, you’re driving the culture away. That’s my fear, is that eventually we will be wiped out.”

Chapter 353 Development Plan

Between Jan. 2018 and Jan. 2020, assessed values for owner-occupied homes in the Westside increased by 128%, on average, according to the Westside Housing Organization. The average increase across Jackson County was 18%.

Since then, property values across the neighborhood have likely only gone up.

In January, the Westside Housing Organization found that a quarter of the property owners in the neighborhood couldn’t pay their tax bill on time, causing them to start accruing interest and late fees. It was around this time that the housing organization began sending out fliers to community members, introducing them to an idea.

Under what has since been proposed as the Chapter 353 Development Plan, all Westside homeowners may have an opportunity to not only freeze their inflated taxes, but reduce them, regardless of income bracket. The proposed ordinance will go before the Kansas City’s Council’s Neighborhood Planning and Development Committee for public testimony Wednesday afternoon at City Hall.

Under the plan, those with a household income of less than $15,000 a year would only have to pay land taxes for the first decade of the proposed 25-year-long program.

Those making between $15,000 and $75,000 would only pay about 2.65% of their income in taxes for all 25 years, bringing them in line with the average property taxes paid across the county.

Those with annual household incomes greater than $150,000 would be given 10% off their current property tax rate for seven years.

On Thursday, despite the conflicting Chiefs kickoff time, about 30 Westside residents gathered at the Guadalupe Center to learn more about the program.

Michael Duffy, an attorney formerly with Legal Aid of Western Missouri, said that projections anticipate about 60% of homeowners, or about 300 people, will have signed up for the plan by its third year. If not, he said, they may need to re-evaluate the program. He said the tax break for even the wealthiest neighbors was included to incentivize participation and “cost-share the tax burden.”

Some residents have raised concerns with requirements of the program, which include sharing household income with the Westside Housing Organization and a two-part house deed transfer. Brandon Mason, an attorney with Legal Aid, said the latter is a legal requirement for the program that returns the deed to the homeowner “almost instantaneously.”

“Our view of the way the market values are going in the Westside, is that this problem is going to last more than 10 years. It’s going to last probably forever here,” said Duffy, adding that the goal is to keep elderly in their homes through the rest of their lives.

Urban Renewal Plan

Pedro Zamora, Director of the Hispanic Economic Development Corporation, claims he first had the idea to use chapter 353 to save the Westside.

But the plan has since taken a turn from what he originally envisioned by offering tax breaks to everyone, regardless of income, he told The Star. He opposes the ordinance that will soon go before city council members.

So he drafted a different plan instead, called an Urban Renewal Plan, a 10 year tax abatement effort with a focus only on long-time and moderate to low income residents as well as small businesses. The plan also provides an opportunity for homeowners to benefit from any improvements made to their property in recent years, part of a larger goal of remediating blight.

To sustain the Westside community, Zamora said, “you can’t afford to displace them and push them further out of the neighborhood, push them into other parts of the city that don’t have the cultural services, that don’t have the food pantries, don’t have the religious institutions that support their lifestyle of living. If you lose that, you create another hardship.”

He accused the Westside Housing Organization’s plan of being supportive of many of the big developments that are contributing to gentrification.

“This plan opens the gateway for high net-worth individuals that can just move into the neighborhood and begin receiving an abatement on their development projects,” Zamora said.

Charles O. Lona, chairman of Westside Central Neighborhood Association, is partial to Zamora’s Urban Renewal Plan, which he is helping propose.

He fears the Chapter 353 plan will solicit more developers and high income people to come to Westside.

“And I don’t think that’s what we want,” Lona said.

The 75-year-old self-proclaimed Chicano Mexican American has lived in the Westside his whole life. His parents lived there before him.

“And we want to continue to stay here,” he said. “I’m interested in keeping that neighborhood vibrant, and the only way to keep that neighborhood vibrant is to invest in it, and I’m hoping that this will help do that.”

Kansas City Public Schools opposes plan

The Kansas City Public School District is also concerned about the Chapter 353 plan. While KCPS wants to help keep housing affordable, chapter 353 is the wrong tool with which to do it, said Kathleen Pointer, senior policy strategist for the district.

She said to her knowledge this is the first time ever that a project would roll back revenues KCPS is already getting. Nearly 70% of the district’s budget is set by property taxes, she said, making the funds vitally important.

If passed, the Westside tax break wouldn’t break KCPS’s bank, but Pointer is concerned about the precedent it might set.

“It is scary for the school district to think about this becoming common practice,” she said. “We are concerned that this is going to be a slippery slope that ultimately could have a catastrophic impact on KCPS’s ability to budget correctly and to have an appropriate amount of funds to educate Kansas City’s kids.”

Councilwoman Andrea Bough, District 6 at-large, and a member of the city’s Chapter 353 Advisory Board, said she was skeptical of the plan at first, but has since decided to sponsor it.

“I think that the plan presented is a unique approach to a problem that, left unresolved, will result in the eviction and dislocation of residents of the Westside whose families have lived there for generations through tax foreclosures brought on by the increased in property values that have disproportionately impacted the Westside in the last few years,” she said in a letter to fellow councilmembers last week.

Bough told The Star doesn’t foresee the plan being replicated by many other parts of the city, if any, due to the unique combination of multi-generational housing, blight and gentrification.

The Westside presents unique challenges, she told councilmembers, adding, “while perhaps not the perfect solution to the problem, I have yet to hear a different solution.”